The British Tobacco Industry The tobacco industry is a widely criticized industry, which has periodically been subject to royal disapproval, the vagaries of fashionable usage, medical studies, smuggling, trade disputes and bans. Nevertheless, the UK cigarette market is known to be the most profitable market in the world. There are two main companies that dominate the UK cigarette industry, controlling almost 90% of the market. The aim of my essay is therefore to analyze the characteristics of the industry which, in my view, contributed to the organization and effectiveness of the cartel between tobacco executives. I will examine the specific factors affecting the likelihood of a coordinated interaction between Imperial Tobacco, Gallaher and BAT as well as "cigarettes" as a product, which will lead us to a conclusion which will summarize that there is a form of tacit collusion between these three companies. Collusion is defined as something very close, if not identical, to a coordinated interaction. According to a European Commission study, factors that inhibit or encourage collusion will need to be examined at four levels in order to assess the likelihood of collusion. At the first of these levels, it is necessary to determine whether there are incentives to enter into a collusive agreement from the outset. There are specific factors affecting the likelihood of collusion in this particular case. The first factor is the number of leading companies and the percentage of...... middle of paper ...... the market is controlled by only 2 companies, there are considerably high barriers to entry and there is evidence of collusion in the same market in the past. However, investigations are still ongoing and I have tried to apply my knowledge and research to show that there are and have always been tobacco cartels, not only in the UK market but also in other global industries cigarettes. There are many ways to reduce the incidence and severity of coordinated interactions, but in this case none of them would be relevant, because smoking kills and bringing competition, therefore more tobacco companies into an industry, would lead to the expansion of these products. the government should focus on developing different products to encourage people to quit smoking, but this is well beyond the scope of the current document..