5 The market for matches and lighters

5.1. The acquisition by Swedish Match of the Wilkinson Sword Consumer

Division of Allegheny included all the latter's subsidiary companies involved in
match-making and lighter distribution activities in Europe and elsewhere in the
world.
5.2. As explained in Chapters 2 and 4, in the United Kingdom Wilkinson
Sword's match and lighter activities are controlled by Bryant & May, the market
leader in the United Kingdom market for matches. Also included in the Wilkinson
Sword Group is Masters, which is responsible for Swedish Match's match and
lighter wholesaling in the United Kingdom.
5.3. The bulk of this chapter is therefore given to describing the United
Kingdom market for matches and lighters, but as the acquisition included a
number of overseas companies it begins with a brief description of the worldwide
market for matches and of Swedish Match's position in it.

The match market worldwide

Demand

5.4. Swedish Match estimates that worldwide (excluding state trading nations)
consumption of matches in 1987 will be of the order of 3,200 billion (equivalent
to over 100,000 matches every second of every day, or about 24 boxes of matches
per person per year). Of this, almost 50 per cent is accounted for by South Asia,
almost 20 per cent by South and Central America, and just 7 per cent by Western
Europe. Annual consumption in state trading nations is estimated to be about
1,800 billion matches. The demand for matches has been declining for a number
of years in most developed Western countries, though the speed of the decline in
individual countries is strongly influenced by the speed of the decline in smoking
and the competitiveness of disposable cigarette lighters. In developing countries,
by contrast, the demand for matches is still increasing.

Supplies

5.5. In the developed countries there have been factory closures as demand
declined. For example, in West Germany nine match factories have closed since
1974, leaving only one small producer. Swedish Match itself has seen its European
sales fall from 230 billion matches in 1972 to 60 billion in 1986. It has closed 11
match factories in the last ten years, leaving only five (two in Sweden, one in
Finland producing only splints, a small one in Portugal, and one in Belgium
(producing only advertising matches).
5.6. Before its acquisition of Wilkinson Sword, Swedish Match's share of the
world market (excluding state trading nations, and certain other countries where
there is not a free market in matches) was about 10 per cent (about 19 per cent if
the share of the Indian company in which it has a 38 per cent shareholding is
included). Including Wilkinson Sword's match activities worldwide, the share of
the Swedish Match group is 19 per cent (or 27 per cent if the share of the Indian
company is included).

The United Kingdom 'lights' market

5.7. The manufacturers of matches and lighters refer to the market they supply
as the 'lights market'. They define 'lights' to include all lights struck from matches
and lighters of all types, plus all lights provided by automatic ignition devices
incorporated within, for example, gas hobs and gas fires. The market for all types
of lights is currently valued at about 156 million per year at retail selling prices.
12

5.8. An overview of the market is given by the figures in Table 5.1. The total
volume of lights used has fallen by about 6 per cent since 1982 (from 182-1 to 171-5
billion). Almost all of this decline in usage is accounted for by the decline in the
use of lights for smoking (this declined by over 8 per cent from 121-6 to 111-5
billion lights). We were told by Swedish Match that this recent decline in the use
of lights for smoking is expected to accelerateit estimates the figure for 1990 to
be about 95 billion lights (a decline of about 15 per cent compared with 1986).
TABLE 5.1

United Kingdom lights market

Lights provided by:

(a) Matches:
Smoking
Other uses
Total
(b) Refillable lighters:*
Smoking
Other uses
Total
(c) Other lighters:
Smoking
Other uses
Total
(d)

1982 1983 1984 1985 1986

billion lights
1987 1988 1989 1990 1991
Forecasts

49-6
24-0
73-6

47-5
23-3
70-8

45-5
22-6
68-1

43-1
22-4
65-5

37-1
21-5
58-6

32-1
21-0
53-1

25-7
20-2
45-9

20-8
19-3
40-1

15-7
18-4
34-1

11-4
17-5
28-9

62-6
2-4

60-2
2-4

55-4
2-4

46-7

43-4

39-8

35-4

62-6

57-8

52-4
2-3
54-7

50-8

65-0

52-7
2-3
55-0

2-2
53-0

2-0
48-7

1-7
45-1

1-5
41-3

1-2
36-6

9-4
0-4
9-8

13-3
0-4
13-7

15-6
0-6
16-2

18-5
0-6
19-1

22-0
0-6
22-6

26-4

30-3

34-4

39-2

44-1

0-7

0-8

1-0

1-2

1-4

27-1

31-1

35-4

40-4

45-5

37-1

38-5

40-0

40-9

41-9

Automatic lights etc: 33-7 34-4 34-4 34-7 35-6

Total
182-1 181-5 176-5 174-3 171-5

Lights used for:

(a) Smoking
121-6 121-0 116-5 114-3 111-5
(b) Other uses
60-5 60-5 60-0 60-0 60-0
Total
182-1 181-5 176-5 174-3 171-5
Source: Bryant & May and Masters

170-3 164-2 1606 156-7 152-9

109-3 102-7 98-6 94-7 90^9

61-0 61-5 62-0 62-0 62-0
170-3 164-2 160-6 156-7 152-9

* Including refills for semi-disposable lighters.

Notes:
1. The method of calculating the numbers of lights given in this table is described in Appendix 5.1.
2. The forecast figures for the years 1987 to 1991 are based on the assumption that the present level of
United Kingdom excise duties on lighters is maintained.

5.9. The number of lights used for purposes other than smoking has remained
largely unchanged in recent years, but may rise slightly over the next few years.
Within this category, however, the use of matches and lighters has fallen a little,
and there is increasing use of automatic lights (automatic lights as a percentage
of lights for other uses increased from 56 per cent in 1982 to 59 per cent in 1986).
This trend is expected to continue.
5.10. Smoking now accounts for about 65 per cent of all lights used (compared
with about 67 per cent in 1982). About 82 per cent of all match and lighter sales
are accounted for by smoking (a figure which has remained fairly constant in the
five years up to 1986, and is expected to remain so in the next five years).
5.11. Trends in the shares of the different products in this market are
summarised in Table 5.2. It is clear that although smokers account for a fairly
constant share (about 82 per cent) of all match and lighter sales, there have been
significant changes in the relative shares of lighters and matches in favour
particularly of disposable lighters. Since 1985, the erosion of the match market
appears to have accelerated to some 10 to 12 per cent a year. This compares with
earlier rates of decline in the United Kingdom match industry of 4.5 per cent a
year. Also, although the share of matches (and lighters) in the 'other uses' sector
has declined in recent years, the decline has been comparatively small, and has
been mostly in favour of automatic lights.
5.12. While it is clear that automatic lights do offer an alternative to matches
and lighters for certain uses, these substitution effects are generally quite small
compared with the extent to which matches and lighters are themselves substitutes
for each other.
13
174493 C*2

TABLE 5.2

United Kingdom lights market: trends

Of all lights used for

smoking, proportion
accounted for by:
Matches
Refillable lighters
Other lighters

1982 1983 1984 1985 1986

per cent
1987 1988 1989 1990 1991
Forecasts

40-8 39-2 39-0 37-7

51-5 49-8 47-6 46-1
7-7 11-0 13-4 16-2

33-3
47-0
19-7

29-4 25-0 21-1

46-5 45-5 44-0
24-1 29-5 34-9

35-9
3-8
1-0
59' 3

344 32-8 31 1 29-7 28-2

3-6
3-3 2' 8 2-4
1-9
1-1
1-9
1-3
1- 6
2-3
60-8 62-6 64- 5 66-0 67-5

Of all lights used for

other purposes, proportion
accounted for by:
Matches
39-6
Refillable lighters
4-0
0-7
Other lighters
55-7
Automatic lights
Source: MMC, based on company

Excise duty

38-5 37-7
4-0 4-0
1-0
0-6
56-9 57-3
data.

37-4
3-8
1-0
57-8

16-6 12-5
42-0 39-0
41-4 48-5

5.13. Excise duty was introduced on matches and lighters in April 1916.
The current excise duties are:
(a) Matches: 1-15 per short standard (7,200 matches), which is equivalent to
about 0-7 pence per box of 43 matches. It was increased from 0-49 per
short standard (effective from 1 January 1976) on 11 March 1981.
(b) Mechanical lighters: 0-50 per lighter. It was increased from 0-20 per
lighter (effective from 1 January 1976) on 11 March 1981.
The duty on lighters is thus proportionately much higher than it is on matches
(assuming a lighter to produce 1,000 lights the equivalent duty on 1,000 matches
is about 0-16). Net duty receipts in 1985-86 amounted to 17-8 million (9-1
million from matches and 8-7 million from mechanical lighters). The figures in
Table 5.3 show the quantities of matches and lighters released for consumption on
payment of duty (this can be regarded as a close approximation to United
Kingdom sales). The figures for lighter sales show a peak of 22-7 million in 1980,
followed by a sharp drop to 11-5 million in the next year. Many have attributed
this decline to the imposition of the higher rate of excise duty on lighters in March
1981. Sales have subsequently risen to 18-4 million in 1986.
TABLE 5 .3 United Kingdom market for matches and lighters
Lighters
Matches*
Home
Home
Imported
produced
Year
produced
Total
Total
Imported
million
%
million
%
%
%
93,197
N/A
1974
42-5
57-5
N/A
8-03
N/A
88,927
N/A
10-86
1975
43-2
56-8
N/A
42-1
88,344
N/A
57-9
9-06
1976
1977
58-7
92,542
85-9
14-1
41-3
10-40
6-7
40-1
59-9
91.872
93-3
15-90
1978
1979
59-4
80,338
6-0
19-16
40-6
94-0
96-7
3-3
22-72
43-2
56-8
80,323
1980
70,841
54-7
97-0
3-0
1981
45-3
11-46
3-2
52-2
74,203
96-8
11-82
1982
47-8
0-9
69,415
99-1
15-32
53-7
1983
.46-3
66.017
0-9
45-4
99-1
15-79
1984
54-6
64,462
99-7
0-3
44-1
55-9
16-80
1985
54-7
99-9
0-1
57,888
18-36
1986
. 45-3
Source: HM Customs & Excise
*Actual quantity charged with duty each year less the quantity on which drawback, etc. was paid.

5.14. Sales of matches dropped by about 12 per cent in 1981. This may also be
the result in part of the higher duty on matches from March 1981, but the effect
of this increase in duty on the price of a box of matches was (as has already been
noted) quite small. A more likely cause is the decline in cigarette consumption in
1981. In that year the duty on tobacco products was increased twice, in March and
in July, and these increases, together with manufacturers' own price increases
during the year, had the effect of increasing the price of a packet of 20 cigarettes
14

by about 22 pence (or 30 per cent). In 1981 cigarette sales fell by 10 per cent with
a further fall of 6-7 per cent in 1982. Swedish Match has told us that, were the
excise duty on lighters to be significantly reduced, or removed, it believes that the
rate of decline in the proportion of lights accounted for by matches would greatly
accelerate.

Matches
5.15. In 1960 over 120 billion matches were sold in the United Kingdom (in the
1920s and 1930s the figure was about 140 billion). By 1986 the figure was less than
half this (see Table 5.3). In the last three years (1983 to 1986) match sales have
dropped by over 16 per cent. About 58 billion matches were sold in 1986 when the
market was worth about 74 million (at retail selling prices).
The product

5.16. The three main types of match are:

(a) safety wood matches (which should ignite only when struck against a strip
of special ignition paint on the matchbox), which account for about 38 per
cent of matches sold in the United Kingdom;
(b) strike-anywhere wood matches (which ignite when struck against any
abrasive surface), about 61 per cent; and
(c) book matches (which are cardboard safety matches fastened together in a
cardboard wrapping), about 1 per cent.
Safety matches tend to be more popular in the south of Britain. Book matches are
a very small part of the market, and the vast majority are given away rather than
sold. Imported book matches are also distributed by the tobacco manufacturers.
5.17. Wood matches are sold in three different box sizes:
(a) standard: containing between 30 and 50 matches, though at present
normally about 43;
(b) large (or smokers' size): containing between 80 and 100 matches, though
usually about 90; and
(c) household: containing between 250 and 330 matches, though usually about
280.
The standard box is the most popular size and it accounts for about 60 per cent
of sales. The large size accounts for about 27 per cent, and the household size for
the rest. Sales of the large and household sizes are slowly increasing their share of
the market.
5.18. There is a British Standard specification for matches (BS 3795: 1964).' To
comply with this Standard producers must, in hourly tests, individually examine
over 2,000 matches each day. It is thought that tests of a smaller sample than this
(eg by purchasers) are impracticable and potentially misleading. The main tests to
be done on the sample are for:
(a) the average number of matches in a box;
(b) the length of the afterglow following burning of the splints;
(c) visible defects of the matches and of the friction paint on the boxes of safety
matches; and
(d) defects in use.
In testing for defects in use the Standard requires that the matches be struck in an
upward sweep away from the user and with the minimum pressure necessary to
ensure ignition.
1
The British Standards Institution told us that this Standard, though still in place, is now regarded as
obsolete and is shortly to be withdrawn. There are no proposals for a new Standard.

15

Bryant & May

5.19. Bryant & May is the only wood match producer in the United Kingdom
and also produces some book matches. Edward Thompson (Printers) Ltd
manufactures a small quantity of book matches at a factory in Sunderland. All
other match supplies are imported.
5.20. Bryant & May manufactures matches at its Liverpool factory, where it
employs 317 people on nine production lines (two of which are on double-shift
working and the rest are on single-shift working) with a total annual capacity of
some 35 billion matches. Its output in 1986 was about 31-7 billion matches, but
when it was operating at peak output in 1982 this factory produced 38-4 billion
matches per year.
5.21. The company's match-making machinery is manufactured and supplied
by Arenco, a Swedish Match subsidiary in Sweden. The wood splints for matches
are imported from a subsidiary of Wilkinson Sword Canada Inc (now owned by
Swedish Match). The paper board for the matchboxes comes partly (about 40 per
cent of requirements) from Thames Board (in Workington) and partly from two
companies in Sweden. The required chemicals are supplied by Albright and
Wilson (phosphorus sesquisulphide for strike-anywhere match heads and
amorphous phosphorus for the striking surface of safety matchboxes) and by Alby
Chlorate, a subsidiary of Swedish Match (potassium chlorate for safety match
heads). Raw materials account for about half of Bryant & May's match
production costs.1
5.22. Bryant & May produces both safety and strike-anywhere matches.
Its brands are:
Strike-anywhere
Safety
Swan Vestas
Brymay
England's Glory
Bo-Peep
Scottish Bluebell
Cooks
Swift
Cooks
Swan Vestas and Brymay are sold in the large box size, Cooks are sold in the
household size, and Brymay and the other brands are sold in the standard box size.
5.23. Swan Vestas is Bryant & May's principal brand, and accounts for about
40 per cent (by volume) of its total match sales (and for four of its nine production
lines). Bryant & May has been a significant supplier of own-label matches since
about 1983, and these accounted for about 19 per cent of its standard match sales
in 1986 (compared with 6 per cent in 1982).
5.24. In the face of rapidly declining demand for matches in the United
Kingdom, we were told that Bryant & May's United Kingdom match operations
have had to be rationalised to contain costs and maintain viability. Since the
Monopolies Commission's 1973 report, Bryant & May has closed its wood match
factories at Gloucester (in 1975) and Glasgow (in 1981) and its book match
production at Bow (in 1979; wood match production at Bow had already ceased
in 1972)., It also rationalised its marketing and administration departments,
transferring these from Bow to the Wilkinson Sword headquarters in High
Wycombe in 1979-80. It has re-equipped the Liverpool factory, a process begun
in 1983 and completed in 1986. This involved the re-equipping of two production
lines with new machinery from Swedish Match, the installation of a new printing
press, and also new automatic packaging equipment on four of the Swan Vestas
lines. Over the period, the numbers employed by the company have fallen from
1,570 in 1973 to 517 in 1986 (average for the year), of which 317 are employed at
Liverpool.
1
For further details about the manufacture of matches see Matchmaking: science, technology and
manufacture by C A Finch and S Ramachandran, 1983.

16

Costs of match production

5.25. We were interested in establishing how Bryant & May's production costs
compared with those of Swedish Match's factories in Sweden. Swedish Match
provided comparative figures for us. The figures for current volumes of output
showed production costs for the standard and household size boxes to be lower
in the Swedish factories than in the Liverpool factory. However, the opposite was
true for the large size boxes.
5.26. Swedish Match pointed out that any comparison of production costs
between two dissimilar manufacturing operations needed careful evaluation as
each plant used different definitions of indirect/direct labour and material costs
and allocated overheads differently and in relatively arbitrary ways. Volume
assumptions were critical, as was the point in time at which costs were compared
(because fluctuating exchange rates affected the cost basis of imported raw
materials).
5.27. A comparison between Bryant & May and Swedish Match was no
exception and, therefore, the comparison which it had provided must be regarded
as providing indications, and not precise measurements, of comparative costs.
5.28. Swedish Match made the following comments on the cost differences
described in paragraph 5.25:
(a) Standard box. The Swedish Match standard box cost was significantly
lower than Bryant & May's primarily because of a lower overhead
allocation which was a function of volume throughput. Additional output
at the Liverpool plant would tend to reduce the differential between the two
companies' overhead costs.
(b) Smokers' box. The lower Bryant & May costs are due to the higher
volume of Swan Vestas compared with the low Winners volume produced
in Sweden.
(c) Household. The higher Bryant & May cost was explained by a higher level
of allocated overheads at the Liverpool plant.
5.29. Swedish Match told us that the decline in the United Kingdom market for
matches and subsequent factory closures has led to all production of matches in
the United Kingdom being concentrated in one highly automated factory. The
only scope for further rationalisation as demand continues to fall (as it
undoubtedly will) will be by taking production lines out of service. However, while
taking lines out of service assists in containing labour costs, it will not be possible
materially to reduce overhead costs, so that inevitably, as volume falls, overhead
costs per unit of production will rise.
5.30. Bryant & May forecasts that by 1990, assuming that the duty on lighters
remains unaltered and that it is able to continue to supply around 54 per cent of
United Kingdom demand, its total output will fall by some 35 per cent (a
somewhat higher percentage on the large (or smokers') box size and a somewhat
lower percentage on the household box size). On the basis of those projected
volumes, Bryant & May forecasts that, with the rising overhead burden, its match
production would cease to be profitable by 1990.

Match imports

5.31. The only other major source of matches in the United Kingdom, apart
from Bryant & May, is imports. The share of imports in the United Kingdom
market is shown in Table 5.3. Imports have for a long time accounted for a
significant share of the United Kingdom market, and in the last ten or so years this
share has been in the range 40 to 48 per cent. It is to be noted that although shares
have fluctuated from year to year, in the early and mid-1980s the share of imports
was in the higher end of this range, whereas in the mid- and late 1970s it was in
the lower end of the range. The main sources of United Kingdom match imports
are shown in Table 5.4.
17

TABLE 5.4

Sources of United Kingdom match imports

Country
1978
1980
46-7
Sweden
48-6
Belgium
13-8
12 1
Czechoslovakia
11-8
13-1
7-6
3-6
USSR
20-1
22-6
Other
Source: United Kingdom Overseas Trade Statistics

1982
31-3
11-0
11-6

1984
46;0
11-6
12-5

per cent
1986
45-1
15-4
13-7

5-7

8-5

7-8

40-4

21-4

18-0

5.32. Sweden has been the source of approaching one-half of match imports for
a number of years. Swedish matches are imported into the United Kingdom by
Masters. Masters also imports matches from Swedish.Match's factory in Belgium.
Until this year, Solo Matches Ltd (Solo) imported matches in unlabelled boxes
from Swedish Match's factory in Belgium (its customers can apply their own labels
for onward sale). These supplies now come from Sweden.
5.33. Masters imports both safety and strike-anywhere matches produced and
packaged by Swedish Match in Sweden. Its brands are:
Strike-anywhere
Safety
Pioneer
Ship
Vulcan
Winners
Winners
Blue Cross
Punch
Army and Navy
Three Torches
Three Torches
Camp Savings
Velvet
Victor
Valiant
Winners are sold in the large box size and all the others are sold in the standard
size, though Ship, Three Torches, Pioneer and Vulcan are also sold in the
household size. An increasing proportion of Masters' sales is of own-label
matches, which by 1986 accounted for about 30 per cent of all its match sales
(compared with 18 per cent in 1982).
5.34. The other main sources of imported matches are certain state trading
countries, particularly Czechoslovakia and the USSR. Imports from these
countries have been subject to quotas for a long time. Details of these quotas and
the volumes of imports from these countries are given in Appendix 5.2. There are
also low levels of imports from certain Western European countries, detailed in
Appendix 5.3.
5.35. There are a number of companies, mostly quite small, which (apart from
Masters and Solo) import matches into the United Kingdom. These are:
(a) Samaco Ltd. A Czechoslovakian-owned company, which imports safety
matches from Czechoslovakia and the USSR, primarily for sale on an
own-label basis. It employs a United Kingdom sales force of nine people
and has its own bonded warehouse (at Lenham, Kent) and distribution
service.
(b) Cornish Match Company Ltd. Imports safety matches from Finland; it sells
a small quantity of strike-anywhere matches bought from Italy via
Nationwide Match Co.
(c) Nationwide Match Co Ltd. Formed in 1985 to act as United Kingdom
selling agent for the Italian match producer, Saffa.
(d) Zor United Kingdom Ltd. Formed in 1985 and owned by the major Spanish
match producer, Fosforera Espanola SA. It imports Spanish safety
matches for sale on both an own-label and a branded basis, selling through
United Kingdom wholesalers.
(e) Amaranth Ltd. Distributor for the major Turkish match producer, Koc
Industries, and sells both branded and own-label matches.
(/) Britannia Match Ltd. Imports matches from Hungary and sells primarily
on an own-label basis.

18

5.36. Of these importers, Samaco is the largest. Its match sales account for
about 10 per cent of all United Kingdom sales, and about one-fifth of all imports.
While it does sell (to cash and carry and other wholesalers and to breweries for
sale in licensed premises) a number of brands itself (eg Scissors, Prestige,
Goldstrike), the bulk of its sales are to multiple retailers, such as Tesco and
Sainsbury, which sell them as own-label matches. These own-label sales are all in
the standard box size.
5.37. Samaco told us that while larger import quotas for matches would have
been welcome in past years, the quotas now, in a smaller and still declining market,
are not a significant constraint on its sales. The present quota for matches from
Czechoslovakia and the USSR represents about 17 per cent of the United
Kingdom market, whereas actual imports in 1986 from these two countries
amounted to only 10 per cent of United Kingdom requirements.
Match exports

5.38. Match exports from the United Kingdom have been on a very small scale
for many years (being primarily to NAAFI establishments overseas). Bryant &
May's export earnings have been of the order of 100,000 in most recent years,
though earnings will be over 800,000 in 1987 because of a large order from
Turkey. (Bryant & May told us this order was unlikely to be repeated. The exports
had substituted for domestic production in Turkey during an industrial dispute.)
Swedish Match's Swedish factories have been very successful in finding export
markets. Sweden's exports of matches in 1986 amounted to about 58 billion
matchesequal to the entire United Kingdom market. Its main export market is
the United Kingdom (which takes about one-fifth of match exports from Sweden),
and its other important markets include West Germany, Denmark, Saudi Arabia,
the Netherlands and Puerto Rico. Swedish Match has its own importing
companies in West Germany, Denmark, the Netherlands, Norway, Austria and
Belgium. Swedish Match's views about the prospects for match exports from the
United Kingdom are summarised in Appendix 5.4.

Market shares

5.39. United Kingdom market shares in matches sold are summarised in Table
5.5. Bryant & May's share is the single largest at about 54 per cent. Imports
account for about 45 per cent, including the Swedish Match share (through
Masters and Solo) of about 28 per cent. Though there has been some increase in
Bryant & May's share and a decline in the Masters/Solo share in the last four or
so years, their combined share (held now by Swedish Match) has remained about
82 per cent.
TABLE 5.5
Company

United Kingdom match sales, 1986

United Kingdom producers

Bryant & May
Other
Imports
Masters/Solo
Other

Share of market
54
1

28
17
100

Source: Bryant & May and Masters.

Distribution

5.40. Swedish Match told us that research by Nielsen (based on sample data on
about 55 per cent of all United Kingdom match sales) showed that in 1986 about
3 1 per cent of retail match sales were through multiple grocers, 1 1 per cent through
multiple confectioners, tobacconists and newsagents (CTNs) and the remaining 58
per cent through independent retailers (mainly grocers and CTNs). Supplies to
these independent retailers are distributed mainly through major wholesalers and
cash and carry outlets. Patterns of match distribution are changing only slowly,
but there has been some increase in the share of multiple grocers (up by about 4
percentage points compared with 1982) and a decline in the share of CTNs (down
by almost 5 percentage points compared with 1982).
19
174493

D*

5.41. Bryant & May and Masters estimate that over 50 per cent of match sales
(by volume) are accounted for by their 20 largest customers, and that almost
one-quarter of sales are accounted for by the five largest customers (Palmer &
Harvey (wholesalers), Co-op, and three cash and carry operators, Linfood,
Nurdin & Peacock and Booker) (see paragraphs 5.71 and 5.72).
5.42. Many of these large customers buy both branded matches and own-label
matches. Market research carried out for Masters in 1983 showed that, except for
Bryant & May's Swan Vestas, the strength of branding is generally weak. The
survey concluded that:
For all other brands, spontaneous awareness is low, brand loyalty is low and
choice of match is not brand related. Only a minority even bother to specify
their most often purchased brandthe majority relying solely on availability on
supermarket shelves or what is handed over a CTN counter.
5.43. The proportion of matches supplied under customers' own labels has
been increasing, though a distinction should be drawn between the different
categories of box size referred to in paragraph 5.17. For large boxes (which
account for some 27 per cent of total United Kingdom match sales) the Swan
Vestas brand is, the 1983 survey concluded, in a category of its own: it accounts
for around 86 per cent of sales in the large box sector, the balance being
attributable to Masters' Winners brand. Swedish Match is of the view that the
overwhelming strength of Swan Vestas means that own-label matches are not
significant in this sector. In the case of household matches, which account for
around 12 per cent of total United Kingdom match sales, again own-label matches
have not been significant, although Swedish Match is of the view that they are
likely to become so since box size rather than brand loyalty is the determining
factor in retail purchases of such matches.
5.44. It is in the case of standard box size, which accounts for around 60 per
cent of total United Kingdom match sales, that own-label matches are most
significant, and are becoming more important. Swedish Match told us that in
1986, of all standard matches sold in the United Kingdom (a total of 35.4 billion),
51 per cent were own-label (up from 46 per cent in 1985). In 1982 the figure was
41 per cent. Own-label, matches are sold through a variety of retail outlets,
including not only multiple grocers and CTNs but also, via wholesalers and cash
and carry outlets, smaller independent grocers and CTNs, public houses, offlicences etc.
5.45. In its August 1985 Market Intelligence report on the matches and lighters
market in the United Kingdom, Mintel also noted that Bryant & May's Swan
Vestas brand is the only match regularly asked for by name. It noted too that Swan
Vestas and Cooks brands (both are Bryant & May brands) are the only brands
available throughout the country. There appear to be strong regional preferences
for certain standard size brands, eg Brymay in the South, England's Glory in
Wales, Midlands and the North, Scottish Bluebell in Eastern Scotland, Vulcan in
Western Scotland, and Swift in Northern Ireland. These regional brand
preferences may in part be a reflection of the greater usage of strike-anywhere
matches in the North compared with the South.

Lighters
The product

5.46. There are two main types of lighters: refillable and disposable. A third
type of lighter, the semi-disposable, has some features in common with both of the
two main types.
5.47. The refillable lighters sold in the United Kingdom are all importedthere
are no United Kingdom manufacturers. The most important source is
manufacturers in the Far East. Refillable lighters are sold at retail prices from
about 5 each upwards. Many are purchased as gifts.

20

5.48. Disposable lighters vary in capacity: generally they will provide about 850
to 1,300 lights per unit and retail for between 90 pence and 1.40 each. On the basis
of cost per light they can be a cheaper source of lights than matches. For standard
boxes of 43 matches each with a current retail price of 6 pence the cost of 1,000
lights is about 1.40. Some smokers prefer to pay 6 pence a time for a box of
matches rather than the higher initial outlay of a lighter.
5.49. Semi-disposable lighters can be refilled, though they are sold at prices
(about 1.80 each) closer to those of disposable than of refillable lighters and they
are often treated by their users as disposable. As a refillable lighter this type of
lighter is capable of providing many more lights per unit than the true disposable
lighter.
Lighter supplies

5.50. There is one manufacturer of disposable lighters in the United Kingdom,

namely IWAX UK Ltd (a subsidiary of the Japanese company Iwahori) in
Northern Ireland. All other disposable and semi-disposable lighters are imported.
Worldwide, two manufacturers dominate the disposable lighter market: these are
Bic of France and Tokai Seiki of Japan, which between them account for about
70 per cent of worldwide output. The United Kingdom market represents less than
1 per cent of the world market. Swedish Match, which manufactures disposable
lighters in France and Holland (and also Argentina, Brazil, Mexico and the
Philippines), told us that there is very substantial worldwide over-capacity in the
production of disposable lighters. Whilst both Bic and Tokai Seiki each have the
capacity to produce between 800 million and 1,000 million lighters per year,
Swedish Match's capacity is about 300 million.
5.51. As Table 5.3 (following paragraph 5.13) shows, lighter sales in the United
Kingdom reached a peak in 1980 and then fell back rather sharply. Since then sales
have been increasing again, reaching some 18.4 million in 1986. Of these, about
80 per cent were of the disposable or semi-disposable type. The lighter market is
currently worth about 50 million at retail selling prices.

Imports

5.52. Figures on the share of lighter imports in sales in the United Kingdom
market are given in Table 5.3. The main sources of imports in 1986 were France,
Japan and Spain. The actual trade figures for lighters are somewhat distorted by
the fact that a large proportion (of the order of one-third to one-half in volume
terms) are re-exported from the United Kingdom (mainly to other EEC countries
and to the USA).

Distribution

5.53. There are a number of distributors of refillable lighters in the United

Kingdom: these include Bryant & May, Ronson, Colibri and Dunhill. Swedish
Match's only presence in the United Kingdom market for refillable lighters is
through Bryant & May. Refilable lighters account for about 20 per cent of lighter
sales by volume and about 70 per cent by value.
5.54. Swedish Match told us that the allocation of distributorships for
disposable and sem-disposable lighters to agents in the United Kingdom is the
decision of the relevant lighter producers (all of which except one manufacture
overseas). The current United Kingdom distributors for the main brands of these
lighters are listed in Table 5.6.
TABLE 5.6 Distributors of disposable and semi-disposable lighters in the United Kingdom
Distributor
Brand name and manufacturer
Bryant & May
Clipper (made by Flamagas in Spain)
Chukka (made by Tokai Seiki in Germany)
Masters
Feudor (made by Feudor, a Swedish Match subsidiary, in France)
Poppell (made by Poppell, a Swedish Match subsidiary, in Holland)
Ronson
Ronson (made by IWAX in Northern Ireland and also imported from Korea)
Biro-Bic
Bic (made by its parent company in France)
Philip Morris
Marlboro (made by Tokai Seiki in Germany)
Djeep
Djeep (made by its parent company in France)
Genie
Genie (made by its parent company in Austria)
Zor
Zor (made by Fierro, its parent company, in Spain)
Win International
Orion Matchless (made by IWAX in Northern Ireland)
Source: Bryant & May and Masters.

21
174493 D*2

Market shares

5.55. Swedish Match suggested to us that because these distributorships are

subject to change it is more appropriate to look at the market shares of the
manufacturers rather than of the distributors. The manufacturers' shares of this
market are shown in Table 5.7.
TABLE 5.7

United Kingdom sales* of disposable and semi-disposable lighters by manufacturer

Manufacturer
Swedish Match (Feudor. Poppell, and own-label)
Flamagas (Clipper)
Bic
Tokai Seiki (Chukka and Marlboro)
Djeep
IWAX (Ronson)
Gillette (Cricket)
Others
Total UK sales fOOO)

7976
28
25
3

1981
18
22
10
20

9
35
5,050

10
19
9,000

per cent
1986
21
18
17
17
12

4
18,200

Source: Bryant & May and Masters.

*By volume.

5.56. Changes in market shares over the last ten years are shown in Table 5.7.
Some suppliers have left the market, for example Gillette which, in 1985, disposed
of its Cricket lighter activities and factories in France, Puerto Rico, Mexico and
Brazil, to Swedish Match. New entrants include Djeep which, with its own direct
sales team, has built up a 12 per cent market share. The lighter manufactured by
JWAX, which Ronson began marketing under its own brand in 1986, quickly
achieved an 11 per cent market share. The IWAX lighter is now distributed both
by Win International (Hagemeyer (London) Ltd) and Ronson which also
distributes a lighter made in Korea. The IWAX factory in Northern Ireland
currently has an output of some 35 million lighters per annum, with an estimated
capacity of 45 million, and there is therefore scope for further growth in output.
5.57. Another way of looking at market shares is by distributor. Bryant & May
currently sells refillable lighters made by Maruman and Mansai, Chukka and
Hi-Lites disposable lighters made by Tokai Seiki and Clipper semi-disposable
lighters made by Flamagas. Swedish Match on the other hand does not distribute
any lighters except those it makes. Its own lighters are distributed in the United
Kingdom by Masters under the Feudor and Poppell brands. The combined share
of Bryant & May and Masters of disposable lighter sales in the United Kingdom
is currently about 48 per cent, and Bryant & May has some 20 per cent of the
market for refillable lighters.
5.58. Patterns of distribution differ between disposable and semi-disposable
lighters on the one hand and refillable lighters on the other. The former tend to
be sold in the same outlets as matches and general patterns of such sales are also
similar to matches. A high proportion of refillable lighters are sold by jewellery
shops and department stores which can stock the wide variety of styles, designs
and prices that consumers look for when making their purchases.

Matches and lighters

Market Shares

22

5.59. Combined market shares for Bryant & May and Swedish Match may be
calculated with or without distributorships. Three market definitions might be
relevant: matches alone; matches plus disposable lighters (as they are close
substitutes); and the full 'lights' market. Table 5.8 sets out the combined market
share that the merger gives Bryant & May and Swedish Match on the basis of the
three market definitions and the two ways of dealing with distributorships.

TABLE 5.8 Combined market shares of Bryant & May and Swedish Match
Production
only
82
65
31

Market definition
Matches
Matches and disposable lighters
All lights
Source: MMC, based on company data.

Advertising and promotion

per cent
Production
and
distribution
82
73
41

5.60. Matches and lighters are not products which are easy to promote by
advertising. In the case of matches the principal expenditure has been on
advertising Swan Vestas, but regional loyalties are a disincentive to national
advertising campaigns for other brands. In the case of lighters (except for the
advertising and promotion of refillable lighters as gifts in the run-up to Christmas)
there have been no regular advertising campaigns, though significant promotional
expenditure is directed at the stockists of refillable lighters. Media advertising
expenditure figures for this market are shown in Table 5.9. It is clear that
advertising expenditure on matches (and on lighters) has dropped off considerably
in the last few years. Much of this expenditure was on poster advertising.
TABLE 5.9

Media advertising expenditure: smokers' requisites

Year
1980
1981
1982
1983
1984
1985
1986
Source: MEAL.

Lighters
160-5
128-5
188-2
95-7
150-1
9-2
49-0

'000
Other products*
871-2
1,009-7
994-0
939-7
1,113-0
216-3
286-0

*Expenditure on other products is mostly on matches, though in some years a significant proportion (up
to about 30 per cent during 1980 to 1984, and around three-quarters in 1985 and 1986) has been on pipes
and other smokers' requisites.

5.61. We asked Bryant & May and Masters to describe their advertising and
promotional strategies. Bryant & May told us that its strategy for matches can be
considered as being three-pronged: consumer media advertising (mostly of Swan
Vestas); consumer promotions; and trade promotions. Bryant & May sees its
Swan Vestas brand as aimed specifically at the smoker and therefore most directly
threatened by competition from disposable lighters. Advertising expenditure in
support of this brand is aimed at persuading consumers to remain loyal to it in the
face of this competition. Consumer promotions are aimed at purchasers in grocery
outlets where a choice of brands (including own-brands) face consumers on the
shelves. These promotions include money-off and cash-back offers, free products
and free gifts. Trade promotions encourage wholesalers, cash and carry outlets
and retailers to list and stock Bryant & May products. These promotions include
free product, cash-back, collector gifts schemes, free prize draws and quantity
bonuses. These promotions are particularly aimed at its regional standard brands
(about 75 to 80 per cent of all matches sold at retail are sold in single boxes).

5.62. Bryant & May pursues both consumer and trade promotions for its
lighter products. It regards the main factor affecting consumer choice of
disposable lighters as price. Its consumer promotions (free gifts, competitions) are
concentrated on its Clipper brand (a semi-disposable lighter). The majority of its
promotional expenditure is on trade promotions, and this is also concentrated on
the Clipper brand. It regards promotional expenditure in support of disposable
lighters (for which the price competition is strong) as unnecessary, and difficult to
fund.
23

5.63. Masters allocates very little to media advertising (all of it to matches) and
concentrates its expenditure on consumer and trade promotions for matches and
lighters. In total, Bryant & May allocates proportionately less advertising and
promotional expenditure to matches than does Masters (8 per cent of sales
compared with 12 per cent), and less too to lighters (7 per cent compared with 9
per cent).

The nature and extent of competition

5.64. The acquisition of Wilkinson Sword by Swedish Match has resulted in a
major structural change in the market for matches and lighters in the United
Kingdom. It brings under common management two companies (Bryant & May
and Masters) which were, by a substantial margin, numbers one and two in the
market. Following the merger, Swedish Match now has just over 80 per cent of
the United Kingdom match market, nearly 50 per cent of the United Kingdom
market for disposable and semi-disposable lighters, and distributes one of the two
leading brands of refillable lighter, with a 20 per cent share of that market segment.
Its share of the entire United Kingdom lights market as a whole is around 40 per
cent (see Table 5.8).
Sources of competition

5.65. Swedish Match faces competition, almost all from other importers, in
each of the market sectors. The main other match importer, Samaco Ltd, with 10
per cent of the United Kingdom match market, is subject to quota restrictions.
Other match importers currently account for a further 6 per cent. In the lighters
sector, other importers include the two French companies, Bic and Djeep, which
account for 17 per cent and 12 per cent respectively of the market for disposable
lighters. There is also the Northern Ireland company, IWAX, accounting for a
further 11 per cent having built up that share since as recently as 1986. Colibri, a
Japanese brand, has a 27 per cent share of the refillable lighter sector, and
Ronson's Comet brand has some 15 per cent of this sector. There is, however, no
competitor with an equivalent position in the United Kingdom lights market as
a whole, where Swedish Match clearly has a strong position.

New entry

5.66. We asked Swedish Match about the recent history of new entry
competition in this market. It told us that, given the rapid decline in United
Kingdom demand for matches and the excess match-producing capacity available
elsewhere in Europe, there has not been, and is not likely to be, new entry into
wood match production (though Edward Thompson (Printers) Ltd started to
make book matches in 1981). But Swedish Match also told us that, in its view,
there has been significant and active new entry into match distribution. It has in
mind here two categories of entrant:
(a) companies acting as agents and United Kingdom distributors for overseas
match producers selling both branded and own-label matches (examples
cited were Nationwide, Amaranth and Zor (see paragraph 5.35)); and
(b) companies with established distribution networks selling own-brands
(examples cited were: Gallaghers, using its cigarette distribution network;
Rizla, selling its matches brand alongside its cigarette papers; Nurdin &
Peacock and Palmer & Harvey, both selling their own brands of matches
through their wholesale outlets).
5.67. The lighter sector has been growing quickly in recent years, and Swedish
Match regards most of the current suppliers as being new entrants, including
Bryant & May which began distributing its brands of semi-disposable and
disposable lighters in 1981. Other examples cited included:
(a) Djeep disposable lighters, introduced into the United Kingdom in 1983;
(b) IWAX UK Ltd, whose Northern Ireland factory opened in 1985;
(c) Zor, introduced in 1986;
(d) Orion Matchless brand, made by IWAX and distributed by Win
International since June 1987; and
(e) cigarette brand lighters (such as Marlboro, Players No 6, Raffles, etc).

24

Machinery and raw

5.68. Swedish Match's position in the lights market is, however, strengthened
materials by its significant role as a supplier of match-making machinery, of matchsticks or
'splints' and of chemicals for match heads. Swedish Match is the self-professed
world leader in these areas. Only Swedish Match's factory in Sweden and Bryant
& May's factory in Liverpool are at present equipped with Swedish Match's latest
production equipment, which it claims is capable of filling boxes 50 per cent faster
than earlier equipment. The only other significant match machinery supplier,
Roller GmbH of West Germany, was recently acquired by Swedish Match. Apart
from the Canadian sources which Swedish Match has acquired from Allegheny,
the other principal sources of wood splints which Bryant & May might use are
Sweden (Swedish Match) and the USSR (Razno Imports). Bryant & May buys its
phosphorus chemicals from Albright and Wilson (see paragraph 5.21). Saffa, the
Italian match manufacturer, is the only alternative source of phosphorus
sesquisulphide, and amorphus phosphorus can be bought from Hoechst in West
Germany. Bryant & May buys potassium chlorate from a Swedish Match
subsidiary; the main other European source for this chemical is the Aragonesas
company in Spain.
Brands

5.69. The position of Swedish Match in the United Kingdom is further

strengthened by its almost total monopoly of the main match brands. While
Swedish Match argues that brand loyalty is not strong for standard size boxes of
matches, the fact that large numbers of brands, some with regional loyalties, are
available indicates a degree of consumer and trade preference for them. Virtually
all of the main brands by market share are either produced by Bryant & May or
distributed by Masters. Moreover, Swedish Match holds virtually all the 39 per
cent of the United Kingdom match market accounted for by larger sized boxes
which are generally available only as branded products.
5.70. When buying standard size boxes of matches consumers have the choice
of buying branded matches or own-label matches (Swedish Match told us that
over 50 per cent of standard box matches are own-label). In the view of some the
quality and box content (numbers of matches in a box) of own-brand matches
tends to be poorer than for manufacturers' brands.' Samaco, the largest importer
of own-brand matches, told us that all its matches are supplied to the British
Standard. Also, we were told by the Department of Trade and Industry's
Consumer Safety Unit, and by the Laboratory of the Government Chemist (which
now conducts tests on matches for the Consumer Safety Unit), that there is no
evidence that matches from any particular origins have been more unreliable than
others. As a number of multiple retailers now have quite significant reputations
of their own, it seems unlikely that they would be willing to sell matches of
demonstrably inferior quality under their own labels.

Large buyers of matches

5.71. Mention is made in paragraph 5.41 of Bryant & May's and Masters' 20
largest customers (by volume). Swedish Match also provided us with information
about these two companies' 20 largest match customers by value for each of the
last five years. This information showed that of Bryant & May's top ten match
customers in 1986 (accounting for about 54 per cent of its United Kingdom match
sales), two were not in the top ten in 1982. Of Masters' top ten customers (with
about 51 per cent of its sales) five were not in the top ten in 1982.
5.72. All the main wholesale and cash and carry companies are in the top ten
for both Bryant & May and Masters, but Sainsbury has bought all its needs from
Masters, and Tesco (and, more recently, Dee Corporation) has bought all its needs
from Bryant & May. Swedish Match told us that Sainsbury (being a South of
England based company and for other reasons) stocks only safety matches (of
which Masters' Ship is the brand leader).

Prices

5.73. We also considered the extend to which the Bryant & May brands
competed against the Masters brands. Swedish Match provided us, for example,
with information on movements in match pricesthis is shown in Table 5.10. For
the standard size boxes, the list prices have been unchanged since July 1983,
though since then the number of matches per box has declined from 48 to 43 giving
25

an effective price increase of about 12 per cent. Over the same period the price of
household size boxes has also increased by about 12 per cent, and the large size
has increased by about 20 per cent. During this period the increase in average retail
prices was almost 20 per cent, and the increase in average wholesale prices was
about 21 per cent.
TABLE 5.10

Match price changes, 1981 to 1986

Standard size
B&M
4-66

Large size
Masters
B&M
4-58
8-38

Masters
8-23

9-14
5-59

5-50

per gross
Household size
B&M
Masters
24-56
24-54
26-27
26-31
28-01
28-01

9-32
29-77
31-52

10-25
11-18

10-05
10-97

29-76

31-51

Source: Bryant & May and Masters.

Notes:
1. For standard box sizes there are adjustments in the numbers of matches per box between price changes.
2. Prices given are best terms list prices.

5.74. A comparison of the two companies' prices over the period 1982 to 1986
(see Table 5.10) shows the following features:
(a) Standard size. Bryant & May's list prices have been only slightly higher (ie
less than 2 per cent higher) than Masters' prices. All of Bryant & May's
standard size brands are currently sold at the same list price, whereas each
of Masters' standard size brands has a different list price (the price given in
Table 5.10 is for the Ship brand)the most expensive being the Army &
Navy brand (5.59 per gross) and the cheapest being the Victor and Valiant
brands (3.23 per gross each)though the recommended retail selling price
for them all is 6 pence per box.
(b) Large size. For a nine-month period in 1982-83 Masters' brand was more
expensive than Bryant & May's brand, but since mid-1983 Bryant & May's
brand has been more expensive than Masters' (by as much as 12 per cent
more expensive for two months in late 1985).
(c) Household size. The prices of the two companies have been more or less the
same and have been increased at mostly the same time.

5.75. Both Bryant & May and Masters make available discounts against their
list prices. In so doing they aim, for example, to maintain product listings at
distribution outlets across their total ranges, and to ensure the best positioning of
their products in cash and carry outlets. Both Bryant & May and Masters also
offer temporary promotional discounts.

5.76. Masters' best terms list prices for lighters have remained at about the
same level for several years. As Table 5.11 shows, however, Bryant & May's list
prices, particularly for its Clipper brand, have been increasing over the same
period. Both companies regard pricing and discounting as of paramount
importance in the sale and marketing of lighters, and especially so for the volume
accounts (eg the multiple retailers). The levels of discounts off list prices for
lighters tend to be greater than for matches. In explanation of this Masters told
us that disposable lighters are a commodity productbrand awareness and brand
loyalty on the part of the trade and the consumer is almost non-existent.
26

TABLE 5.11

Lighter price changes, 1981 to 1986

per lighter

Date
1981 September
1982 January
February
June
1983 February
1984 January
1985 April
1986 February

May

Brvant & Mav

Chukka
Clipper

0-74
0-73
0-78

Stick
0-87

Masters
Panoramic

Automatic
1-08

0-92

0-80

0-98
1-03

0-87

1-13

0-82

0-87

0-97

0-84

0-89

1-00

Source: Bryant & May and Masters.

Notes:
1. Prices given are best terms list prices.
2. Both companies sell a range of lighters and the lighters and prices shown in this table are not necessarily
directly comparable.

27