The cigarette and tobacco market in the United Kingdom is dominated by two companies, Imperial Tobacco and Japan Tobacco International which between them control around 80% of the market.
Smoking peaked in the UK in 1974 and since then sales of cigarettes and other tobacco products have declined steadily. During 2016, overall sales of manufactured cigarettes fell by 3.5%.
In recent years there has been a decline in the sale of premium brands and a corresponding growth in economy-priced cigarettes, roll-your-own (RYO) and electronic cigarettes. Economy-priced cigarettes now account for more than half of all cigarettes sold in the UK.
However, despite this decline in sales of manufactured cigarettes, tobacco remains highly profitable. In recent years the UK tobacco market has generated annual operating profits of more than a billion pounds.