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Big Tobacco Brand Values Go Up in Smoke

20 November 2018
This article is more than 5 years old.

· Top 10 most valuable tobacco brands lose on average 6% brand value since 2017, while the world’s largest brands across other sectors gain 13%.

· Marlboro remains the world’s most valuable tobacco brand, with brand value equal to the next six biggest brands combined, at over US$30 billion.

· India’s Gold Flake loses 34% brand value since last year, more than any other top 10 tobacco brand, with current brand value at US$2.3 billion.

View the Brand Finance Tobacco 10 2018 report here

The majority of the world’s biggest tobacco brands have lost brand value year on year, as increasing regulatory challenges and new product offerings are taking their toll on the traditional tobacco industry, according to the latest Brand Finance Tobacco 10 report. Seeing an average 6% reduction of brand value since 2017, tobacco brands are visibly behind brands from other sectors, with a global average growth rate of 13%.

David Haigh, CEO of Brand Finance, said:

“In recent years, the tobacco industry has faced tidal waves of change, with many countries introducing plain packaging rules or higher taxes. Now, with the rise of vaping and e-cigarette alternatives to traditional cigarette smoking, big tobacco brands have an opportunity to offset short-term financial losses by adjusting their offering, thus averting the crisis in the long run.”

Philip Morris International, the owner of the Marlboro brand, are making significant efforts to protect their brand in the future by investing in non-combustible tobacco products, such as the IQOS (which stands for I Quit Ordinary Smoking) device to heat, rather than burn, tobacco. As tobacco brands look to alternatives from traditional cigarettes, campaigns, such as the “Hold my Light” initiative from Philip Morris International to encourage people to quit smoking, are growing in popularity.

David Haigh, CEO of Brand Finance said:

“Migrating its customer base away from cigarettes and encouraging smokers to move across to other Philip Morris-branded alternatives such as its IQOS heated tobacco offering or the newly launched e-cig product IQOS Mesh is a double win for Phillip Morris. The company can be seen to be doing good by encouraging people to smoke less, but also cleverly captures our attention and introduces us to the variety of other products being actively marketed.”

Marlboro tops the ranking

Valued at US$30.5 billion, Marlboro continues to dominate as the world’s most valuable tobacco brand. Effectively tied for second place, Pall Mall (brand value down 6% to US$6.0 billion) and L&M (brand value up 10% to US$6.0 billion) remain a long-way behind Marlboro, but just ahead of Camel (brand value up 3% to US$5.9 billion) and Newport (brand value up 5% to US$5.5 billion).

Gold Flake loses shine

Further down the table, Winston (down 13% to US$3.8 billion), Sampoerna (down 9% to US$3.5 billion), and Copenhagen (down 10% to US$2.5 billion) have each recorded a decrease to their brand value. However, the most drastic fall comes from India’s Gold Flake (down 34% to US$2.3 billion), a result of the Indian government increasing taxes on cigarettes under its goods and services tax. Under this legislation, cigarettes are taxed as a luxury good, at 28 per cent with an extra 5 per cent sin tax, plus an additional rate on top of that depending on their length and whether they are filtered or unfiltered.

Regulatory restrictions

With OECD countries imposing harsh restrictions on tobacco marketing, according to the World Health Organisation, 80% of the world’s 1 billion smokers are now in low- and middle-income countries, where marketing of tobacco products is much more widespread. However, with the rise of anti-smoking policies in developing economies, such as India, big tobacco brands now also need to adjust their brand management strategies there.

At the same time, the spread of plain packaging may further reduce the strength and value of big tobacco brands. Combined with existing advertising restrictions, removing even packaging differentiation will unavoidably cause further harm to tobacco brands in the future.


Note to Editors
Every year, leading valuation and strategy consultancy Brand Finance values the world’s biggest brands. The 50 most valuable spirit brands in the world are included in the Brand Finance Tobacco 10 2018 league table.

Brand value is understood as the net economic benefit that a brand owner would achieve by licensing the brand in the open market. Brand strength is assessed through a balanced scorecard of factors (such as marketing investment, stakeholder equity, and business performance) and used to determine what proportion of a business’s revenue is contributed by the brand.

Additional insights, more information about the methodology, as well as definitions of key terms are available in the Brand Finance Tobacco 10 2018 report.

Brand Finance helped craft the internationally recognized standard on Brand Valuation – ISO 10668, and the recently approved standard on Brand Evaluation – ISO 20671.

Data compiled for the Brand Finance league tables and reports are provided for the benefit of the media and are not to be used for any commercial or technical purpose without written permission from Brand Finance.

Media Contacts

Penny Erricker
Communications Executive
Brand Finance

About Brand Finance

Brand Finance is the world’s leading brand valuation consultancy. Bridging the gap between marketing and finance for more than 25 years, Brand Finance evaluates the strength of brands and quantifies their financial value to help organizations of all kinds make strategic decisions.

Headquartered in London, Brand Finance has offices in over 20 countries, offering services on all continents. Every year, Brand Finance conducts more than 5,000 brand valuations, supported by original market research, and publishes over 100 reports which rank brands across all sectors and countries.

Brand Finance also operates the Global Brand Equity Monitor, conducting original market research annually on over 5,000 brands, surveying more than 150,000 respondents across 38 countries and 31 industry sectors. Combining perceptual data from the Global Brand Equity Monitor with data from its valuation database enables Brand Finance to arm brand leaders with the data and analytics they need to enhance brand and business value.

Brand Finance is a regulated accountancy firm, leading the standardization of the brand valuation industry. Brand Finance was the first to be certified by independent auditors as compliant with both ISO 10668 and ISO 20671 and has received the official endorsement of the Marketing Accountability Standards Board (MASB) in the United States.

Definition of Brand

Brand is defined as a marketing-related intangible asset including, but not limited to, names, terms, signs, symbols, logos, and designs, intended to identify goods, services, or entities, creating distinctive images and associations in the minds of stakeholders, thereby generating economic benefits.

Brand Strength

Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors. Brand Finance evaluates brand strength in a process compliant with ISO 20671, looking at Marketing Investment, Stakeholder Equity, and the impact of those on Business Performance. The data used is derived from Brand Finance’s proprietary market research programme and from publicly available sources.

Each brand is assigned a Brand Strength Index (BSI) score out of 100, which feeds into the brand value calculation. Based on the score, each brand is assigned a corresponding Brand Rating up to AAA+ in a format similar to a credit rating.

Brand Valuation Approach

Brand Finance calculates the values of brands in its rankings using the Royalty Relief approach – a brand valuation method compliant with the industry standards set in ISO 10668. It involves estimating the likely future revenues that are attributable to a brand by calculating a royalty rate that would be charged for its use, to arrive at a ‘brand value’ understood as a net economic benefit that a brand owner would achieve by licensing the brand in the open market.

The steps in this process are as follows:

1 Calculate brand strength using a balanced scorecard of metrics assessing Marketing Investment, Stakeholder Equity, and Business Performance. Brand strength is expressed as a Brand Strength Index (BSI) score on a scale of 0 to 100.

2 Determine royalty range for each industry, reflecting the importance of brand to purchasing decisions. In luxury, the maximum percentage is high, while in extractive industry, where goods are often commoditised, it is lower. This is done by reviewing comparable licensing agreements sourced from Brand Finance’s extensive database.

3 Calculate royalty rate. The BSI score is applied to the royalty range to arrive at a royalty rate. For example, if the royalty range in a sector is 0-5% and a brand has a BSI score of 80 out of 100, then an appropriate royalty rate for the use of this brand in the given sector will be 4%.

4 Determine brand-specific revenues by estimating a proportion of parent company revenues attributable to a brand.

5 Determine forecast revenues using a function of historic revenues, equity analyst forecasts, and economic growth rates.

6 Apply the royalty rate to the forecast revenues to derive brand revenues.

7 Discount post-tax brand revenues to a net present value which equals the brand value.


Brand Finance has produced this study with an independent and unbiased analysis. The values derived and opinions presented in this study are based on publicly available information and certain assumptions that Brand Finance used where such data was deficient or unclear. Brand Finance accepts no responsibility and will not be liable in the event that the publicly available information relied upon is subsequently found to be inaccurate. The opinions and financial analysis expressed in the study are not to be construed as providing investment or business advice. Brand Finance does not intend the study to be relied upon for any reason and excludes all liability to any body, government, or organisation.

The data presented in this study form part of Brand Finance's proprietary database, are provided for the benefit of the media, and are not to be used in part or in full for any commercial or technical purpose without written permission from Brand Finance.

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