Formation of American Tobacco Company

There were 119 tobacco factories in Virginia and North Carolina in 1840 and 348 in 1860.

On returning to his North Carolina farm from a Union prisoner-of-war-camp, Washington Duke built a company around the sale of tobacco products.

In 1880 the twenty-four-year old James Buchanan Duke was running Duke Sons and Company. By 1888 the firm of was producing 744 million cigarettes per year.

Americans adoption of the cigarette led to the proliferation of tobacco firms, and eventually the five leading producers of 1890 combined as the American Tobacco Company with Duke at the head.

By 1898 American Tobacco was selling almost 4 billion cigarettes per year and controlled virtually the entire cigarette industry in the United States.

At first, the American Tobacco Company had dabbled only in cheroots and other small cigars, but in 1901 it decided to move into the cigar business.

American Tobacco Company dominated the industry by acquiring the Lucky Strike Company and over 200 other rival firms.

By 1910 American Tobacco Company possessed 86 percent of the cigarette market, 85 percent of the plug market, 79 percent of the pipe tobacco market and 14 percent of the cigar market in the United States. 

Eventually, American Tobacco’s control over the American market led to its dissolution at the hands of the Justice Department of the federal government. The court order breakup of the American Tobacco Company in 1911 changed the industry from a monopoly to a oligopoly.

The company broke into several major companies: American Tobacco Company, R.J Reynolds, Liggett & Myers Tobacco Company, and Lorillard.

In 1969 American Brands became the parent company of American Tobacco Company.
Formation of American Tobacco Company