Despite an increase in the smoking age population, total consumption of cigarettes is likely to decline again during the next decade and per capita consumption is also likely to fall. The major factor in continuing declines will be price. Although wholesale prices have not reached the levels of the early 1990's, retail prices have risen due to higher State taxes and declining share of discount brand sales. In 1997, six states raised their excise tax on tobacco products and further increases are set for 1998. Tax discrepancies have become so wide that illegal sales of cigarettes are likely to become a greater problem in the future.
Cigarettes account for most of the tobacco disappearance in the United States and other countries.
It is likely such a price increase would be phased in over a period of time between 3 to 10 years, but the change in consumption would be essentially the same. Cigar production surged an estimated 19 percent. As in the past few years, gains have been in the premium segment of the market. Cigar consumption is expected to continue increasing in 1998, although at a slightly slower rate. Consumption of small cigars, those weighing less than 3 pounds per 1,000, in 1997 gained 6 percent, reaching 1.6 billion cigars.