Sri Lanka Country Profile

Image source: Nazly Ahmed | CC BY-NC-SA 2.0

Key Points

• Sri Lanka is an island nation in the Indian Ocean. It is part of the World Health Organization’s South-East Asia Region.
• Its population was 22 million as of 2024. Tobacco use prevalence amongst those aged 15 years old and above was 19% in 2020.
• Sri Lanka ratified the World Health Organization Framework Convention on Tobacco Control in 2003. It joined the Protocol to Eliminate Illicit Trade in Tobacco Products in 2016.
• Ceylon Tobacco Company PLC, a subsidiary of British American Tobacco, holds a monopoly on cigarette manufacturing and sales in Sri Lanka.
• Tobacco industry tactics used in Sri Lanka include corporate social responsibility, litigation, establishing connections with government, and strategies related to price and taxation.

Sri Lanka has a strong national framework for tobacco control and has implemented several global best practice measures. These include graphic health warnings which cover 80% of the surface area of tobacco packaging, a ban on tobacco advertising, promotion and sponsorship (TAPS), and anti-tobacco mass media campaigns.¹ However, a number of shortcomings remain: tobacco industry corporate social responsibility (CSR) is not captured by the TAPS ban; sales of loose cigarettes (single sticks) are still permitted; and while cigarettes have become less affordable in recent years, tobacco taxes still fall short of the threshold recommended by the World Health Organization (WHO).¹ The British American Tobacco (BAT) subsidiary Ceylon Tobacco Company (CTC) is one of the largest taxpayers in the country and enjoys a degree of access to government, with several CTC directors having simultaneously held positions in government or other state-owned institutions.²³ CTC has also partnered with government in its CSR activities (see Corporate social responsibility section below).

Tobacco Use in Sri Lanka

As of 2024, the population of Sri Lanka was 22 million.⁴ According to the 2020 Global Adult Tobacco Survey (GATS), tobacco use prevalence among those 15 years old and above was >19%, equivalent to more than 3 million people. Prevalence is much higher amongst males (>36%) than females (<5%).⁵

The prevalence of tobacco smoking in any form was >9% in adults, <20% for males and less than 0.1% for females.⁵ 5% of adults reported using bidis (10.5% for males and less than 0.1% for females). Use prevalence of cigars was reported as 1% (>2% in males and negligible in females). Smokeless tobacco use prevalence was >13% (>23% in males and <5% in females).⁵

According to the most recent Global Youth Tobacco Survey (GYTS), conducted in 2015, tobacco use prevalence among adolescents aged between 13 and 15 was <4% (<7% in males and <1% in females). Prevalence of cigarette smoking was 1.5% (<3% in males only). Smokeless tobacco use prevalence was >2% (>4% in males and 0.5% in females).⁶

There were an estimated 11,100 deaths attributable to smoking in 2019, accounting for over 8% of all mortality that year.⁷ A report published in 2019 by the United Nations Development Programme found that in 2016, tobacco use had cost Sri Lanka LKR213.8 billion (approximately US$1.5 billion) in the form of direct health expenditure, plus loss of productivity due to premature mortality, disability and workplace smoking. This was equivalent to 1.6% of national GDP.⁸ The report argued that were Sri Lanka to invest in six tobacco control measures in line with the WHO Framework Convention on Tobacco Control (WHO FCTC), it would save LKR586 billion (approximately US$4 billion) over the following 15 years.⁸

Tobacco in Sri Lanka

Market share and leading brands

CTC is the only licensed cigarette manufacturer in Sri Lanka, and holds a monopoly on cigarette manufacturing and sales.²⁹ It operates via British American Tobacco Holdings (Sri Lanka), which owned over 84% of shares as of 2024.² Over 8% of shares are held by Philip Morris Brand SARL, an entity of Philip Morris International (PMI).² CTC accounts for 99% of the market and is responsible for the entire manufacturing process, from tobacco cultivation to cigarette production.⁹

With a market share of 71%, John Player is by far the bestselling brand of cigarette in Sri Lanka.¹⁰ According to CTC’s 2023 annual report, John Player Gold Leaf accounted for 76% of its revenue in the country.¹¹ Capstan has a market share of 19%, and Dunhill 10%.¹⁰

• For more information on the tobacco industry in Sri Lanka, see the Tobacco Supply Chain Database.

Tobacco farming

According to Sri Lanka’s Export Development Board, the country has committed to cultivating almost 100% of the tobacco used for domestic cigarette manufacturing.¹² In 2021/22, the area of cultivable land dedicated to tobacco farming was less than 1,000 hectares, with production at over 6,600 tonnes.¹³ While production has increased from a low of just over 3,300 tonnes in 2014, it is still much lower than the high of 18,600 tonnes which was registered in 1980 (see Figure 1 below).¹⁴

Figure 1: Tobacco production, 1961 to 2023. Source: UN Food and Agriculture Organization/Our World in Data | CC BY

Tobacco and the economy

Sri Lankan raw tobacco and manufactured cigarettes are exported mostly to European markets.¹⁵ In 2023, the value of tobacco exports was over US$94 million,¹⁶ accounting for less than 1% of total exports.¹⁵

According to UN Comtrade, Sri Lanka is a net importer of tobacco leaf, importing leaf worth nearly US$61 million in 2024, compared to exports of almost US$28 million.¹⁷¹⁸ It is also a net importer of cigarettes, importing over US$6 million in cigarettes in 2024, compared to over US$2 million in exports.¹⁹²⁰

Illicit trade

CTC has repeatedly stated in its annual reports that the increases in volumes of the illicit tobacco trade in Sri Lanka are a consequence of increased cigarette prices due to higher taxation.²¹¹²¹ In its 2024 Annual Report, CTC described the illicit market in Sri Lanka as “burgeoning” and a “growing threat”.² However, it also stated that the illicit share of the cigarette market was 12%, which is consistent with the estimated global average (10-12%).²²² Given the tobacco industry’s history of consistently overestimating the size of illicit markets,²³ the illicit share of the market in Sri Lanka may in fact be lower than the global average.

Tobacco and the environment

Tobacco farming is a cause of severe soil erosion in Sri Lanka. Without any soil conservation measures, it is estimated that soil erosion of sloping lands where tobacco is cultivated is 70 tons/ha/year.²⁴ This has a series of impacts including depletion of water resources, diminished land productivity and increased costs of agricultural production.²⁴

As a monoculture, tobacco is vulnerable to pests and diseases. As a result, large quantities of chemicals and growth regulators tend to be applied. These chemicals then pollute nearby water sources. For example, it is estimated that nearly 75 kg of urea is applied annually for each hectare of tobacco. This then leaches into rivers and lakes, causing eutrophication – the excessive growth of plants and algae.²⁵

• For more information, see the page on Tobacco and the Environment and the Long Read on Plastics, the Environment and the Tobacco Industry.

Roadmap to Tobacco Control

Sri Lanka ratified the WHO FCTC in 2003, with the treaty entering into force in 2005. Sri Lanka was the first Asian country to ratify the treaty and fourth in the world.²⁶ It joined the Protocol to Eliminate Illicit Trade in Tobacco Products in 2016.²⁷

The National Authority on Tobacco and Alcohol (NATA) Act No 27 of 2006 is the main legal framework for tobacco and alcohol control in Sri Lanka. The main provisions of the act are the prohibition on the sale of tobacco to those under 21 years old; a ban on tobacco vending machines; a ban on tobacco advertising and promotion, including online; and a ban on smoking in enclosed public places.²⁸²⁹ Subsequent amendments to NATA introduced graphic health warnings (GHWs), as well as banning smokeless tobacco products (also considered by regulators to encompass heated tobacco products) and flavoured tobacco products.³⁰

However, optimal enforcement of some of these measures remains a challenge. Areas that should be further strengthened include indirect promotion on social media,³¹ advertising and promotion at the point of sale,³² and online sales.³³

Further tobacco control measures have been proposed, and in some cases approved by legislators, though as of December 2025 they had still not been implemented. These include a ban of the sale of loose cigarettes (single sticks),³⁴³⁵ the introduction of plain packaging,³⁶ a ban on tobacco sales within a 500 m radius of schools,³⁷ and a ban on tobacco cultivation.³⁶

For more details, please see the following websites:

• Legislation by Country/Jurisdiction – Sri Lanka, Tobacco Control Laws, Campaign for Tobacco-Free Kids
• Sri Lanka, WHO FCTC Implementation Database, WHO FCTC Secretariat
• Country profile – Sri Lanka, WHO report on the global tobacco epidemic 2023, World Health Organization

Tobacco Industry Interference in Sri Lanka

Tobacco industry tactics in Sri Lanka include corporate social responsibility (CSR), including in partnership with government; litigation, in an attempt to overturn the introduction of GHWs; and various strategies related to price and tax.

Corporate social responsibility

Tobacco industry CSR in Sri Lanka is administered by the Outreach Projects (Guarantee) Limited. A fully owned subsidiary of Ceylon Tobacco Company (CTC), Outreach is effectively the company’s CSR arm.³⁶ Launched in 2006, the Sustainable Agriculture Development Programme (SADP) is CTC’s flagship CSR initiative.²³⁸ CTC states that it is “aimed at promoting sustainable agriculture practices across rural communities in Sri Lanka”.¹¹ Sri Lankan politicians have also appeared at events organised for farmers by CTC, such as the annual “Farmer Appreciation Awards”.³⁹

CSR has also occurred in partnership with government. CTC has sponsored several government projects, including renovation of water reservoirs in agricultural areas,⁴⁰ a housing project in a tsunami-affected area,⁴¹ reconstruction of railway stations,⁴² re-establishment of police stations in war affected areas,⁴³⁴⁴ and the construction of 100 agro wells.⁴⁵ In 2023, CTC partnered with the National Apprentice and Industrial Training Authority (NAITA) and the National Youth Services Council (NYSC) – both state institutions – to provide scholarships for vocational training.³⁶⁴⁶

Litigation

In 2012, Maithripala Sirisena, then Minister of Health, introduced a requirement for GHWs covering 80% of cigarette packs. CTC took legal action, claiming that the regulations exceeded the authority of the Ministry and violated the company’s intellectual property rights.⁴⁷ While the Court of Appeal ruled that the Ministry of Health did have the right to introduce GHWs, it reduced the size of the warnings to 50-60%, to provide companies with more space to display their trademarks.⁴⁷ However, the Sri Lankan parliament responded by approving a bill which explicitly required the initial 80% GHWs.⁴⁸

• For more on how the tobacco industry uses litigation, see Legal Strategy.

Non-compliance with packaging regulations

In October 2018, a new cigarette pack containing just two cigarettes – one John Player Gold Leaf and one John Player Navy Cut – appeared on the market. Both brands are manufactured by CTC, though this product was not included in its brand portfolio. The packaging did not display any trademark or logo, just the price in the local language. However, the colour of the pack was similar to that used in John Player branding. The pack also did not have any health warnings or disclosure of ingredients, as is required by law.⁴⁹

Allegations of bribery

Allegations of bribery were made against CTC in relation to the introduction of GHWs on several occasions.⁵⁰ In 2013, Minister of Health Maithripala Sirisena publicly stated that the tobacco industry had offered him cash in return for withdrawal of the GHWs. He stated that the amount offered was enough for “fourteen generations” of his family to live “in a first-world country.”⁵¹ CTC categorically denied these allegations.⁵²⁵³

In 2015, the then Minister of Health Rajitha Senaratne also made bribery allegations regarding the same issue, stating that “the tobacco industry had offered Rs. 1 billion to the previous government to stall action to print pictorial health warnings on 80 per cent of the display areas of cigarette packets”. Again, CTC denied the allegations.⁵³

• For more on this topic, see Corruption.

Conflicts of interest

Members of the CTC Board of Directors have often simultaneously held positions in government or in semi-public organizations, including the Ministry of National Policies and Economic Affairs, the National Council of Economic Development, the Finance Commission, the Board of Investment, the University Grants Commission, the National Human Resources Development Council, Sri Lankan Airlines and the Ceylon Tea Board.³

For example, in September 2022, Suresh Shah, Chairman of CTC and an Executive Director of Carson Cumberbatch PLC (an alcohol company) was appointed as the head of the state-owned enterprise (SOE) restructuring unit, a government department which reforms state-owned enterprises to reduce fiscal risk to the state.⁵⁴⁵⁵

Agreement with customs

CTC continues to liaise with Sri Lanka Customs, with the stated aim of preventing illicit tobacco trade, against the recommendations of Article 5.3 of the WHO FCTC. According to the CTC Annual Reports for 2015 and 2016, the information obtained from an anti-illicit trade hotline managed by CTC “is directed to the relevant law enforcement authorities including the Sri Lanka Police, Sri Lanka Customs and Excise Department for appropriate action”.⁵⁶⁵⁷

CTC has a memorandum of understanding (MoU) with Sri Lankan customs, under which CTC destroys illegal cigarettes seized.⁵⁸ Destruction of illicit cigarettes has reportedly taken place with the participation of CTC officials (including Chairman and Chief Executive Officer), high-ranking customs officials and the State Minister of Finance.⁵⁸

Sri Lanka Customs launched the Compliant Economic Operator (CEO) and Authorized Economic Operator (AEO) programmes on 20 January 2022, in line with the World Customs Organization (WCO) SAFE Framework of Standards and the World Trade Organization (WTO) Trade Facilitation Agreement aimed at “recognizing and facilitating the most compliant and secure operators of the supply chain”.⁵⁹ Under this programme, CTC was one of three companies who received the CEO certificate, meaning it will benefit from trade facilitation measures including rapid release, reduced documentation requirements and fewer physical inspections.⁵⁹ CTC also revealed in its 2024 annual report that it had been awarded AEO status by Sri Lanka Customs, granting it similar benefits.²

Price and tax

In 2020, the state-owned Bank of Ceylon (BOC) approved a loan of LKR3.15 billion (approximately US$16 million) to D.S. Gunasekara Limited (DSG), a leading passenger transport company in Sri Lanka and an area distributor for CTC. The loan was approved even though DSG stated in its request that it required the funds so it could stockpile cigarettes ahead of an expected increase in tobacco taxes in the 2021 budget. DSG was expected to make LKR7.7 billion (US$38.5 million) and the BOC LKR85 million (US$425,000) thanks to this arrangement.⁶⁰⁶¹ BOC also had a 0.08% shareholding in CTC as of 2023.¹¹

Stockpiling, also known as forestalling or front-loading, is a common tobacco industry tactic in expectation of increased duty on tobacco products. It results in higher sales prior to tax increases, then lower sales afterwards, as the oversupply is absorbed. This means not only higher sales in the short-term, but lower sales and lower government revenue after a tax increase, which the industry often attributes to increased illicit trade.⁶²

During the 2016 budget proposals, the government raised tax on cigarettes exceeding 72mm in length. In October 2017, CTC launched John Player Navy Cut, which is shorter in length and therefore not liable to the tax increase. As a result, John Player Navy Cut remained relatively affordable.⁶³

• For more on this topic, see Price and Tax.

Relevant Links

• Alcohol and Drug Information Center Sri Lanka
• Ceylon Tobacco Company (CTC) website
• National Authority on Tobacco and Alcohol (NATA)

Tobacco Tactics Resources

• Greenwashing
• Legal Claims
• South East Asian Region

TCRG Research

• Developing more detailed taxonomies of tobacco industry political activity in low-income and middle-income countries: qualitative evidence from eight countries, B.K. Matthes, K. Lauber, M. Zatoński, L. Robertson, A.B. Gilmore, BMJ Global Health, 2021;6:e004096. doi: 10.1136/bmjgh-2020-004096