The price of cigarettes and other tobacco products across the United States continues to climb each year. As a result, people often wonder how much money the tobacco industry makes each year, why companies keep increasing prices, and whether that is driving consumers away.
When you look at the cost of tobacco products as a consumer, what you’re actually seeing is tobacco product cost, taxes, and added costs of stores like Kroger and anywhere else consumers buy their tobacco from.
How Much Money Big Tobacco Brands Make Each Year
In the most recent reporting period, the 7 biggest tobacco companies made combined profits of 137 billion; they are considered “Big Tobacco” and make the majority of profits worldwide for tobacco products.
However, the global tobacco industry is estimated to bring in 850 billion as of 2021, which indicates there are a huge number of smaller players that bring in the bulk of the tobacco profits around the world.
| Company | Profit |
| British American Tobacco (BAT) | $33,846,000,000.00 |
| Philip Morris International (PMI) | $31,405,000,000.00 |
| Imperial Brands | $5,705,000,000.00 |
| Altria Group | $26,013,000,000.00 |
| Japan Tobacco Collective (JT) | $20,830,000,000.00 |
| Swedish Match | $2,110,000,000.00 |
| 1st China National Tobacco | $18,556,603,332.00 |
1st China National Tobacco does not export any tobacco, so profits are entirely made in China and kept there.
While there is decreasing consumption of tobacco in the US and many western countries, there is still significant uptake in tobacco products in Asia and Africa, which is driving the increase in profits, which is estimated to go up by 2.3% yearly until at least 2030, pushing profits into the trillions of dollars.
East Asia alone accounts for 61% of the worldwide profits from tobacco; as the US and other countries go down, the expectation is that the 61% profit will climb in Asia and recoup anything lost from western countries.
How Are Profits Split Between DIfferent Products
Each tobacco company makes profits in different areas of the tobacco industry, cigarettes certainly make up the majority of those profits, but there is an ongoing shift to alternative products that increases each year.
| Product | BAT | PMI | Altria | JT | Imperial | Swedish Match |
| Cigarettes | 87.60% | 78.50% | 86.20% | 90.40% | 76.30% | 0% |
| Cigars | 0% | 0% | 1.90% | 0.20% | 7.50% | 23.20% |
| Cigarillos | 0.10% | 0.10% | 0.10% | 0.10% | 1.40% | 4.10% |
| Western-Style Pipe Tobacco | 0% | 0.30% | 0% | 0% | 0% | 0% |
| Middle Eastern Pipe Tobacco | 0% | 0% | 0% | 1.30% | 0% | 0% |
| Fine Cut Tobacco | 3.10% | 3.10% | 0% | 5% | 11.60% | 0% |
| Snuff / Dip | 3.80% | 3.80% | 11.70% | 0% | 0% | 12.70% |
| Chewing Tobacco | 0% | 0% | 0% | 0% | 0% | 15.60% |
| Heated Tobacco | 2.90% | 18.70% | 0% | 1.80% | 0% | 0% |
| Cartridges | 1.30$ | 0% | 0% | 0.90% | 2.60% | 0% |
| E-Liquids | 0.30% | 0% | 0% | 0.20% | 0.40% | 0% |
| Snus | 0.50% | 0% | 0% | 0% | 0% | 26% |
| Nicotine Pouches | 0.50% | 0% | 0.10% | 0.10% | 0.30% | 18.50% |
Most of the big players in the industry still get the majority of their profits from cigarettes, with much smaller percentages from other products, but these percentages are expected to increase as people move away from cigarettes more and more each year.
Smoke-Free Alternatives
Altria invested 35% into JUUL, a vaping company that provides nicotine alternative vaping products, and JUUL is making over 1 billion per year, with most recent estimates putting them at 4.3 billion for 2022.
British American Tobacco has the worldwide most popular vaping product and the 2nd most popular in the US with Vuse vaping, which had profits of 1.16 billion in 2021, with estimates pushing those profits to 6.79 billion by 2026.
Companies Going Completely Smoke-Free
Companies such as Philip Morris have plans to go completely smoke-free and move away from the traditional tobacco products that have made them huge amounts of money, but the underlying product is still tobacco. So they are looking at multiple options for delivering nicotine to people without the negative effects of smoke.
They have declared they want to move at least 40 million of their smokers off cigarettes and onto healthier smokeless options; however, the FDA has indicated their products are still potential hazards to health.
It should also be noted that this will be Philip Morris International, which means other subsidiaries don’t have the same push to move away from tobacco products, such as Philip Morris USA.
How Much Money Does The Tobacco Industry Make In the US
Many of the major tobacco manufacturing companies have operations and make significant profits in the US; there are 553+ manufacturing companies making and selling tobacco products in the US alone, though much of that is exported around the world.
Profits from tobacco products sold in the US alone were $52.790 billion in 2021, with profits estimated to drop slightly lower in 2022.
| Year | Profits |
| 2022 | $51,190,000,000.00 |
| 2021 | $52,790,000,000.00 |
| 2020 | $54,580,000,000.00 |
| 2019 | $50,380,000,000.00 |
| 2018 | $51,290,000,000.00 |
| 2017 | $51,000,000,000.00 |
| 2016 | $46,590,000,000.00 |
| 2015 | $45,790,000,000.00 |
| 2014 | $41,600,000,000.00 |
| 2013 | $45,720,000,000.00 |
| 2012 | $46,440,000,000.00 |
Tobacco Companies In The United States
There are over 553 different tobacco companies in the United States producing and selling tobacco products; many of them may be owned by the same parent company.
Often companies will have different divisions for local and international supply, as well as child companies for different products, such as JUUL, which is 35% owned by Altria Group.
| US Company | Profit USD |
| Phillip Morris International | $31,405,000,000.00 |
| Altria Group | $26,013,000,000.00 |
| Reynolds American (BAT) | $2,768,000,000.00 |
| Phillip Morris USA | $1,986,000,000.00 |
| Universal Corporation | $1,938,000,000.00 |
| RJ Reynolds Tobacco | $1,853,000,000.00 |
Which Tobacco Companies Hold The Biggest Market Share
Tobacco companies may have multiple brands and products, but the profits all ultimately go to the parent company, and in the US, there are only 3 major tobacco companies that are making all the profit.
| Brand | Marketshare In US | Owner |
| Marlboro | 40% | Altria Philip Morris International |
| Newport | 14% | British American Tobacco |
| Camel | 8% | British American Tobacco |
| Pall Mall | 7% | British American Tobacco |
| Maverick | 2% | Imperial Brands |
| Santa Fe | 2% | British American Tobacco |
| Winston | 2% | Imperial Brands |
| Kool | 2% | Imperial Brands |
US Tax Profits From Tobacco
US tax profits from tobacco reached their highest in 2010 at 17.16 billion dollars and have been slowly declining since then, with the profits in 2021 being 11.61 billion dollars.
| Year | Profit (Billion $) |
| 2021 | 11.61 |
| 2020 | 12.35 |
| 2019 | 12.46 |
| 2018 | 12.86 |
| 2015 | 14.45 |
| 2010 | 17.16 |
| 2005 | 7.92 |
| 2000 | 7.22 |
Expectations for the future of US tax profits from tobacco are that they continue to decline and then flatten out.
| Year | Profit (Billion $) |
| 2026 | 11.04 |
| 2025 | 11.14 |
| 2024 | 11.26 |
| 2023 | 11.49 |
| 2022 | 11.47 |
This decline in US tax profits from tobacco doesn’t mean the companies behind the products will be losing significant revenues; like most industries, they are needing to pivot into new markets which don’t have the same taxes applied to them.
Average Cost Of A Pack Of Cigarettes In Each US State
The Average cost of a pack of cigarettes varies significantly across each US state. So while the taxes do account for higher prices, they aren’t the only factor in the price difference.
The highest average cost is in New York, with a pack of cigarettes costing $12.85, which includes $4.35 in tax, while the second highest is in Illinois at $11.50, which includes $1.98 in taxes.
| State | Average Price | Tax Added |
| Alabama | $5.51 | $0.68 |
| Alaska | $9.79 | $2.00 |
| Arizona | $8.05 | $2.00 |
| Arkansas | $6.07 | $1.15 |
| California | $5.89 | $2.87 |
| Colorado | $5.65 | $0.84 |
| Connecticut | $9.52 | $4.35 |
| Delaware | $6.35 | $2.10 |
| Florida | $6.30 | $1.34 |
| Georgia | $6.39 | $0.37 |
| Hawaii | $9.55 | $3.20 |
| Idaho | $5.41 | $0.57 |
| Illinois | $11.50 | $1.98 |
| Indiana | $5.97 | $0.99 |
| Iowa | $6.29 | $1.36 |
| Kansas | $5.83 | $1.29 |
| Kentucky | $5.40 | $1.10 |
| Louisiana | $5.44 | $1.08 |
| Maine | $7.37 | $2.00 |
| Maryland | $7.75 | $2.00 |
| Massachusetts | $9.95 | $3.51 |
| Michigan | $8.00 | $2.00 |
| Minnesota | $8.10 | $3.04 |
| Mississippi | $6.34 | $0.68 |
| Missouri | $5.25 | $0.17 |
| Montana | $6.46 | $1.70 |
| Nebraska | $6.23 | $0.64 |
| Nevada | $6.15 | $1.80 |
| New Hampshire | $6.64 | $1.78 |
| New Jersey | $8.20 | $2.70 |
| New Mexico | $7.67 | $1.66 |
| New York | $12.85 | $4.35 |
| North Carolina | $5.45 | $0.45 |
| North Dakota | $5.33 | $0.44 |
| Ohio | $6.03 | $1.60 |
| Oklahoma | $6.29 | $2.03 |
| Oregon | $5.69 | $1.33 |
| Pennsylvania | $6.85 | $2.60 |
| Rhode Island | $8.95 | $4.25 |
| South Carolina | $5.85 | $0.57 |
| South Dakota | $6.08 | $1.53 |
| Tennessee | $5.30 | $0.62 |
| Texas | $6.69 | $1.41 |
| Utah | $6.89 | $1.70 |
| Vermont | $9.62 | $3.08 |
| Virginia | $5.25 | $0.30 |
| Washington | $9.30 | $3.02 |
| West Virginia | $5.43 | $1.20 |
| Wisconsin | $8.82 | $2.52 |
| Wyoming | $5.41 | $0.60 |
Average Cost Of Cigarettes At A Standard Store
What’s especially interesting when you compare the average cost of a pack of cigarettes vs. the average cost at a bigger store like Kroger is that Kroger keeps its prices similar for cigarettes between different states.
In higher-cost states, Kroger is a good deal, but in lower-cost states, it’s not a good place to buy your tobacco products.
| State | Brand | Kroger Price | Average State Price (Unbranded) |
| New York | Lucky Strike | $6.86 | $12.85 |
| New York | New Port | $8.49 | $12.85 |
| Massachusetts | Lucky Strike | $6.33 | $9.95 |
| Massachusetts | New Port | $8.00 | $9.95 |
| Kentucky | Lucky Strike | $6.25 | $5.40 |
| Kentucky | New Port | $7.91 | $5.40 |
| Missouri | Lucky Strike | $6.33 | $5.25 |
| Missouri | New Port | $8.00 | $5.25 |
What’s interesting while researching this article is that Walmart is starting to remove cigarettes, vapes, and similar products from their stores in the US and Canada. Which is a significant move that could reduce their revenues, but they cite tax complexities as the reason.
CVS removed tobacco products from their stores back in 2014, and many other major stores in the US either don’t sell cigarettes or are considering removing them such as Walgreens, which could make cigarettes more challenging to find and more costly.
US Average Price Of Cigarettes Compared To Other Countries
The average price of a pack of 20 cigarettes varies significantly across countries, this is due to the wholesale price available, as well as tax on cigarettes. Some governments don’t want to outright ban cigarettes and tobacco products, but increases in price results in less usage.
Depending on which store, city, and brand of cigarette, the US ranks 15th in the world for the most expensive cigarettes at $7.50. The most expensive is in Australia at $20.69, and the least expensive is in Nigeria at a shocking $0.83 per pack of 20 cigarettes.
| World Rank | Country | Average Price |
| 1 | Australia | $20.69 |
| 2 | New Zealand | $19.93 |
| 3 | Ireland | $13.92 |
| 4 | Norway | $13.50 |
| 5 | UK | $13.07 |
| 15 | US | $7.50 |
| 90 | Uzbekistan | $1.45 |
| 91 | Pakistan | $1.29 |
| 92 | Armenia | $1.25 |
| 93 | Vietnam | $1.08 |
| 94 | Kazakstan | $1.06 |
| 95 | Nigeria | $0.83 |