SIC 2131 Chewing and Smoking Tobacco and Snuff

Contenidos

• NAICS CODE(S).
• FURTHER READING.

SIC 2131

This industry consists of establishments primarily engaged in manufacturing chewing and smoking tobacco and snuff. Other tobacco product industries are discussed in SIC 2111: Cigarettes; SIC 2121: Cigars; and SIC 2141: Tobacco and Redrying.

NAICS CODE(S)

312229

Other Tobacco Product Manufacturing

By the mid-2000s the U.S. smokeless tobacco industry generated more than $2 billion and continued to be dominated by UST Inc., the nation's largest manufacturer and distributor of chewing tobacco and snuff, with $1.85 billion in 2005 sales. The longtime runner-up, Conwood Sales Co. L.P., was acquired in 2006 by Reynolds American for $3.5 billion in cash. Reynolds American was formed in 2004 as a result of a merger between R.J. Reynolds and Brown and Williamson. However, Conwood won a $1 billion judgment against UST after it was determined that UST attempted to keep Conwood products out of stores. Several other companies, including Swedish Match North America Inc. (formerly Pinkerton Tobacco Co.), National Tobacco, and Swisher also compete for a small percentage of this industry.

UST, with its Skoal and Copenhagen brands, consistently accounts for the vast majority of sales in the moist snuff category and is the overall sales leader for smokeless tobacco. The popularity of its Kodiak brand enables Conwood to control more than 10 percent of the moist snuff market. Swedish Match (Red Man and Granger brands) is the market leader in the loose-leaf category and is a strong competitor with UST and Conwood for total sales of smokeless tobacco.

The snuff business enjoyed an upsurge in the mid-1970s after nearly half a century of lackluster sales. The hardcore market remained in the southern United States among the older population. However, in the mid-1970s snuff began to regain some popularity, especially as young men turned to it because they thought it was a safe alternative to cigarettes. Labels warning of dangers and a ban on television and radio advertising of smokeless tobacco were not required until 1986, when the U.S. Surgeon General proclaimed it a cause of mouth cancer and other oral diseases.

Demand for smokeless tobacco rose sharply during the 1980s and early 1990s. Among smokeless products, moist snuff was the leader with total U.S. output rising 83 percent from 1981 to 1993 alone, from 30 million pounds to 55 million pounds, respectively. In the early 1990s, as cigarette and cigar volume...