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Lunati budapest_2012

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Lunati budapest_2012

  1. 1. The european tobacco sectorAn analysis of the socio - economic footprintFabio Lunati Budapest, 19 October 2012
  2. 2. THE LIST OF TOPICS• The socio economic footprint of pre-manufactured tobacco in the EU-27• The socio economic footprint of tobaccoproduct manufacturing in the EU-27• The socio economic footprint of tobacco onthe European trade and retail sector• The economic footprint on Governmentrevenues (focus on illicit trade)• Final considerations 2
  3. 3. THE EUROPEAN TOBACCO SECTOR, A BREAKDOWN OF THE LEVELS• Tobacco growing (raw tobacco)• First processing Eurostat +• Manufacture of tobacco products european tobacco association• Distributive trade (wholesale) data (farmers, companies,• Distributive trade (retail) union trade)• Government fiscal revenues• Retail value 3
  4. 4. THE VARIETY GROUPS OF RAW TOBACCO CULTIVATED IN THE EU, BY MEMBER STATECountry Variety groups Flue cured, Light air cured, Dark air cured and FireItaly I, II, III and IV cured Flue cured, Light air cured, Dark airSpain I, II and III cured I, II, VI andBulgaria Flue cured, Light air cured, Basmas and Kaba Koulac VIIIGreece I, VI and VII Flue cured, Light air cured, Basmas and Katerini Flue cured, Light air cured, Dark air cured and FirePoland I, II, III and IV cured Flue cured, Light air cured, Dark airFrance I, II and III curedGermany I and III Flue cured and Dark air cured 4.1% ofHungary I and II Flue cured and Light air cured the worldPortugal I and II Flue cured and Light air cured production 2010Romania I and II Flue cured and Light air curedBelgium II and III Light air cured and Dark air curedSource: Nomisma on EU Commission (Member States Data) 4
  5. 5. RAW TOBACCO: CROP VALUE IN THE EU-27, BREAKDOWN BY MEMBER STATE (2010) (Million €, % of the total) EL; 70; 12.5% PL; 55.8; BG; 76.8; 10.0% 13.7% FR; 48.8; 8.7% DE; 15.6; 2.8% € 560 million HU; 6.3; 1.1% PT; 2.1; 0.4%ES; 86; 15.4% RO; 1.5; 0.3% BE; 0.3; 0.1% IT; 196.3; 35.1%Source: Nomisma on EU Commission (Member States data), Copa-Cogeca and Fetratab estimates 5
  6. 6. LABOUR FORCE INVOLVED IN THE GROWING AND HARVESTING OF RAW TOBACCO IN THE EU-27(2010) BG 110,000 PL 75,100 IT 59,300 EL 44,000 ES 38,100 FR ~ 400,000 31,500 units HU 25,400 RO 6,900 DE 4,900 PT 1,100 The labour force required to cultivate 1Ha of tobacco is 15 BE 150 times higher than that needed to cultivate 1 Ha of maize, wheat or oil seedSource: Fetratab estimates 6
  7. 7. THE TOBACCO FIRST PROCESSING INDUSTRY: SOCIAL ED ECONOMIC VALUES, BY COUNTRY First TotalCountry Value of Farmers processing working(Member % % % production % (number) plants unitsStates) (Mio €) (Units) (number)Belgium 74 0.1% 4 7.0% n/a - n/a -Bulgaria 48,727 56% 10 17.5% 4,000 40.1% 118.5 16.7%Germany 189 0.2% 2 3.5% 100 1.0% n/a -Greece 13,526 15.6% 4 7.0% 2,500 25.1% 95.0 13.4%France 2,076 2.4% 1 1.8% 151 1.5% 44.5 7.9%Hungary 1,101 1.3% 2 3.5% 345 3.5% 11.4 1.6%Italy 5,792 6.7% 20 35.1% 1,750 17.5% 252.0 35.6%Poland 12,230 14.1% 5 8.8% 700 7.0% 70.6 10.0%Portugal 37 0.04% 1 1.8% n/a - n/a -Romania 706 0.8% 5 8.8% n/a - n/a -Spain 2,273 2.6% 3 5.3% 430 4.3% 105.5 14.9% Total 86,731 100% 57 100% 9,976 100% 708.9 100%Source: Nomisma on Fetratab estimates 7
  8. 8. IMPACT OF THE FIRST PROCESSING OF TOBACCO ON OTHER SECTORS OF THE ECONOMY (2010, MILLION €) 3.6 Agronomic Service / Transport of raw materials to the factory Packaging of tobacco leaves 10.3 (cured) 13.9 Energy costs (IT,HU,PL) Industrial Plants and € 46.7 equipment maintenance (periodical services) million 4.3 Other industrial services (insurance, storage, waste disposal, spraying) Transport of the finished product to manufactures industry 4.4 Professional services (legal, accounting, IT, travel, insurance) 8.1 2.2Source: Nomisma on Fetratab estimates
  9. 9. THE PRODUCTION OF CIGARETTES IN THE WORLD (2010, Pieces) China 38.0% European Union 11.0% (27 members) World Russia 6.3% 6,200 billion USA 5.2%Rest of the world 39.5% 0% 10% 20% 30% 40% 50%Source: Nomisma on Universal Corporate and Eurostat (Prod Com) 9
  10. 10. THE VALUE OF TOBACCO PRODUCTS EX FACTORY IN THE EU -27 MEMBER STATES Value (MILLION €) Cigars, cheroots Smoking Cigarettes and tobacco cigarillos EU-27 1,112.7 100% 10,773.7 100% 1,331.7 100%(members)of which:Bulgaria 0.0 0.0% 163.8 1.5% 1.4 0.1%Denmark 44.7 4.0% 305.3 2.8% 90.9 6.8%Germany 261.5 23.5% 2,002.9 18.6% 264.2 19.8%Greece 0.0 0.0% 391.9 3.6% 0.7 0.0%Italy (°) 74.0 6.6% 367.1 3.4% 0.0 0.0%Portugal 0.7 0.1% 370.1 3.4% 0.0 0.0%Other EU 731.8 65.8% 7,172.7 66.6% 974.5 73.2%(°) Source: Italian Ministry of Finance (AAMS) Source: Nomisma on Eurostat (Prod Com) data 10
  11. 11. TOBACCO PRODUCTS MANUFACTURING: THE EMPLOYMENT LEVEL IN THE EU-27 (2009, UNIT) DE 10,255 PL 6,548 BG 4,324 UK 3,737 NL 3,672 ES 3,399 EL 2,553 BE 2,100 IT 2,100 FR 1,952 50,338 PT 1,700 employed RO 1,665 SE 1,561 DK 1,254 CZ 1,237 HU 1,007 AT 974 LV 258 EE 42Source: Nomisma on Eurostat, ILO, OECD (Stan) data 11
  12. 12. TOBACCO MANUFACTURING INDUSTRY: THE MOST IMPORTANT ECONOMIC INDICATORS IN THE EU-27 Million € (2009) 50 000 44,927(*) 45 000 40 000 35 000 30 000 25 000 20 000 15 000 10 000 8,013 5 000 1,842 0 Turnover Value added at Wages and factor cost Salaries (*) All duties and taxes included, with the exception of Value Added Tax (VAT)Source: Eurostat (Structural Business Statistics) 12
  13. 13. THE IMPACT OF THE MANUFACTURE OF TOBACCO PRODUCTS ON SOME VENDORS/SUPPLIERS OF THE TOBACCO INDUSTRY 2011, MILLION € Total vendors/suppliers 3,000 - 3,500Board & paper materials 1,500 Filters 872 Fine paper 637 Additives 277Source: Nomisma on PMI (Philip Morris International) estimates 13
  14. 14. REGISTERED TRADEMARKS FOR TOBACCO PRODUCTS AND ARTICLES 2011, % of the total Others 123 1.4% Word 4,186 Figurative 47.5% 4,503 8,813 51.1% Trade marks Firms manufacturing tobacco products use registered trademarks to protect their valuable brand equities in a competitive environmentSource: CTM-ON LINE (trademark consultation service) 14
  15. 15. WHOLESALE OF TOBACCO PRODUCTS: THE BREAKDOWN OF SOME ECONOMIC VARIABLES Million € (2010)60 000 45,90045 000 Tobacco wholesalers (EU–27):30 000 3,910 units Source: ETV15 000 2,823 4,315 0 Number of Number of persons Value added at Enterprises employed factor costSource: Eurostat and Europäischer Tabakwaren Großhandels Verband (ETV) 15
  16. 16. THE TOBACCO TRADE AND RETAIL SECTOR, BY COUNTRY: THE RESULTS OF AN EMPIRICAL SURVEY ON Pos (*) (2010, UNIT)ES 148,399PL 140,000UK 95,770DE 92,350RO 81,814 IT 69,572CZ 63,088 EU-27HU 42,435 955,338EL 33,782FR 27,398 PosPT 23,500BG 22,036 ValidatedSK 20,890 ValidatedBE 11,907SE 10,699 IE 10,500 (*) Points of tobacco sales (Pos) are:DK 9,494 • Convenience stores FI 9,098LT 8,967 • Food Stores (Smkt/Hmkt)NL 8,400NO 7,608 • Tobacconists (Specialised shops)AT 6,987LV 5,511 • Grocery stores SI 3,599EE 3,450 • KiosksCY 3,114LU 1,594 • Petrol/Gas stationsMT 1,004 IS 475 • HoReCa (Hotel, Restaurant, Catering) Source: Nomisma on national trade associations 16
  17. 17. THE TOBACCO RETAIL DISTRIBUTION CHANNELSIN THE EU-27: A DETAILED OVERVIEW (2010, UNIT) FR, IT, ES, SE AT, BE,DK,EL,DE,MT,NL,PL,PT and SKCountries with a soleDistributor (4) Countries with indipendent  Total Pos: 256,068, wholesalers (10) of which: • Total Pos: 348,314  Specialised shops: ~ of which: • Specialised shops: ~ 72,000 99,000 BG,CY,CZ,EE,FI,HU,IE, EU-27 LV,LT,LU, RO,SI and UKCountries with a mixed Distributive trade (retail)distributive trade (13)  Total Pos: 955,358,  Total Pos: 350,976 of which: of which:  Specialised shops:  Specialised shops: ~ ~180.000  AVERAGE WORKFORCE: 7,500 2.1 UNIT (Source: CEDT) 17
  18. 18. GOVERNMENT REVENUES FROM TAXATION OF TOBACCO PRODUCTS IN THE EU-27 2010, Million € 21,004 144.3 Government 21,2% 0,1% revenues from excise Government revenues from VAT Import duty on unmanufactured 77,755 tobaccos and 78,6% other tobacco productsSource: Nomisma on Eurostat data (DG TAXUD) and PMI (Philip Morris International) estimates 18
  19. 19. GOVERNMENT REVENUES FROM TAXATION OF TOBACCO PRODUCTS, BREAKDOWN BY MEMBER STATE 2010, Million € DE 13,477,6 3,479,2 IT 10,621,5 2,974,2 FR 10,358,7 2,588,0 UK 10,152,6 2,364,0 ES 8,023,2 1,913,5 PL 4,249,7 1,464,6 EL NL BE CZ AT PT RO Revenue from IE excise DK HU Total (millions Euro) SE EU-27 BG FI € 98,759 Revenue from SK Million VAT (millions LU SI Euro) CY LT LV EE MTSource: Nomisma on Eurostat data (DG TAXUD) and PMI (Philip Morris International) estimates 19
  20. 20. TOTAL ESTIMATED JOBS IN THE TOBACCO SECTOR IN THE EU-27 (2010) Agriculture labour force • 396,450 First processing workforce • 9,976 Employed in manufacturing Total • 50,338 1,458,022 Employed in the wholesale trade • 45,900 Retail trade Pos • 955,358Source: Nomisma 20
  21. 21. RETAIL VALUE OF THE TOBACCO SECTOR (2010, 2009FOR WHOLESALE AND RETAIL VALUE ADDED) Raw tobacco Million € (2010) • € 560 Mio Value added (first processing) • € 149 Mio Manufactured production sold • € 13,218 Mio Governments revenues from excise duties Retail value (*) • € 77,755 Mio € 121,440 Mio Value added (wholesale) • € 4,315 Mio Value added (retail) • 4,294 Mio Government revenues from VAT • € 21,004 Mio (*) Import duties included Source: Nomisma 21
  22. 22. THE PROBLEM OF CONTRABAND & COUNTERFEIT, BY DESTINATION COUNTRIES (2010, billions of pieces) DE 13.1 FR 9.3 PL 5.8 UK 5.4 RO 5.3 BG 4.8 IT 4.5 EL 1.8 NL 1.8 ES 1.8 EU-27 LT 1.6 AT 1.4 Illicit IE 1.2 cigarettes LV 1.0 FI 0.9 consumption CZ 0,9 2010: HU 0.8 BE 0.7 64.2 billions SE DK 0.3 0.7 (10%) EE 0.3 PT 0.3 SI 0.2 SK 0.1 LU 0.1 MT 0.1 CY 0.0Source: KPMG STAR report 2011 22
  23. 23. FINAL CONSIDERATIONSThe total socio-economic impact of the tobacco sector on theEU-27 economy is much higher than it may appear at a firstglance.The tobacco sector is highly interrelated. To assess the realsocio-economic consequences of new regulations it is necessarya wide knowledge of it.New regulations that seem may have a low impact on a specificpart of the tobacco sector can, instead, have much strongernegative effects on others.Nomisma Report provided an overview of the economicfootprint of the EU tobacco sector and new regulations shouldbe assessed on the consequences on this footprint.To get a updated basis of discussion with policymakers,Nomisma Report could be assumed as the baseline for anyfurther analysis on the tobacco sector. 23
  24. 24. THANK YOU FOR YOUR ATTENTION For further information: FABIO LUNATI fabio.lunati@nomisma.it 24

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