Tobacco in Peru
Euromonitor International's Tobacco in Peru market report offers a comprehensive guide to the size and shape of the market at a national level. It provides the latest retail sales data, allowing you to identify the sectors driving growth. It identifies the leading companies, the leading brands and offers strategic analysis of key factors influencing the market - be they new product developments, packaging innovations, economic/lifestyle influences, distribution or pricing issues. Forecasts illustrate how the market is set to change.
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Tables: 62 | Publication date: Feb 2008
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive environment
Product coverage
Cigarettes; Cigarettes including RYO; Cigars; Smoking tobacco
Executive summary
British American Tobacco plc (BAT) controls the market
British American Tobacco plc (BAT) holds the bulk of the legal market for cigarettes. In addition, BAT brands are the most popular target for illicit trade products. BAT distributes the brands Hamilton Lights, Lucky Strike, Kent, Winston, Salem, Premier, Montana (recently renamed as Pall Mall), Inca, Nacional and Casino. Of the top five brands, four belong to BAT. BAT’s marketing strategy is to serve all segments of the market with appropriate brands, while focusing on C and D segments in order to serve large groups. Pricing is a key element in BAT’s marketing mix. BAT launched smaller five unit packs of its Hamilton Lights brand in 2006, and increased Hamilton Lights’ share significantly by doing so. Furthermore, BAT strengthened its distribution channels with its own distribution company, Distribuidora Dinámica. Previously, before BAT’s purchase of TANASA, 2003, Distribuidora Dinámica distributed mass consumption products, as well as TANASA products. BAT decided to focus on its core business and resolved to distribute only BAT products. Today Distribuidora Dinámica reaches more than 30,000 selling points all over the country.
Illicit trade accounts for over a third of the total market
In 2006, tax evasion in the tobacco industry was about n/s200 million. Currently more than 135 brands are sold on the black market, many of them counterfeit. These cigarettes are illegally imported, primarily from China, Turkey, Colombia and Paraguay. Contraband and counterfeit cigarettes are extremely harmful to the market, because consumers are exposed to poor quality products, companies are not able to sell their products and the government is not able to collect taxes. According to the BCRP (National Central Bank of Reserve), the market value of the tobacco which enters the country is approximately n/s400 million. The cities with the highest consumption of illegal cigarettes are Tacna, with 90% of total sales attributed to illegal consumption, Iquitos (92%), Cusco (67%), Arequipa (79%), Chimbote (59%) and Lima (34%). Most contraband cigarettes enter the country through the port of Callao and the border towns of Tumbes, Tacna and Puno. 60% of all contraband cigarettes come through the latter two cities.
Peruvian legislation on major tobacco industry issues is restrictive
Peru adopted the Framework Convention on Tobacco Control (FCTC) in 2005. In 2007, Peruvian tobacco legislation had several rules on the sale, advertising and smoking of tobacco products. Advertising in mass media is forbidden, except between 1am and 5am. Advertising is also prohibited in cinemas, even in films targeted at adults. Poster and billboard advertising in public areas cannot be located closer than 500m from educational institutions. Furthermore, regulation is strict concerning smoking in enclosed public spaces, such as cinemas, theatres, television sets, hospitals, lifts and public transport, among others. In these areas, it is mandatory to place a poster with the phrase “It is forbidden to smoke in public places, according to Law 25357” (“Está prohibido fumar en lugares públicos, según la Ley 25357”). Regulations state that companies must include warnings about tobacco having a damaging effect on human health on all tobacco packaging, as well as in any advertising.
Peruvian tobacconists/specialists rapidly increase in conjunction with local tobacco producers
The liberalisation of the economy and the expansion of international commerce in the mid-nineties opened the doors for new products to enter the market. Tobacconists/specialists such as Artifum Tobacco Shop, Casa del Fumador and Club del Habano opened their doors in 2001. These stores are mainly located in high-income zones of Lima such as Santiago de Surco, San Isidro and Miraflores, as well as in large provinces. Tabacalera del Oriente gained a good image in the market as a quality hand-made national product, thanks in great measure to the growth of tobacconists/specialists. Tabacalera del Oriente’s products share a privileged position, competing directly with Cuban products in most tobacconists/specialists. This allowed Tabacalera del Oriente to capture a substantial share of cigars in 2006.
Table of contents
TOBACCO IN PERU : MARKET INSIGHT
EXECUTIVE SUMMARY
British American Tobacco plc (BAT) controls the market
Illicit trade accounts for over a third of the total market
Peruvian legislation on major tobacco industry issues is restrictive
Peruvian tobacconists/specialists rapidly increase in conjunction with local tobacco producers
OPERATING ENVIRONMENT
Smoking Population
Death by Cause
Legislation
Litigation
Taxation and Duty Levies
Production/Imports/Exports
Table 1 Trade Statistics – Cigarettes 2001-2006
The Role and Effect of Cannabis/Marijuana
MARKET INDICATORS
Table 2 Deaths by Diseases of the Respiratory System 2001-2006
Table 3 Deaths from Heart Disease 2001-2006
Table 4 Deaths from Lung Cancer 2001-2006
Table 5 Illicit Trade Estimate 2001-2006
MARKET DATA
Table 6 Sales of Tobacco by Sector: Volume 2001-2006
Table 7 Sales of Tobacco by Sector: Value 2001-2006
Table 8 Sales of Tobacco by Sector: % Volume Growth 2001-2006
Table 9 Sales of Tobacco by Sector: % Value Growth 2001-2006
Table 10 Sales of Cigarettes by Distribution Format: % Analysis 2001/2006
Table 11 Forecast Sales of Tobacco by Sector: Volume 2006-2011
Table 12 Forecast Sales of Tobacco by Sector: Value 2006-2011
Table 13 Forecast Sales of Tobacco by Sector: % Volume Growth 2006-2011
Table 14 Forecast Sales of Tobacco by Sector: % Value Growth 2006-2011
DEFINITIONS
Sources
Summary 1 Research Sources
CIGARETTES
Headlines
Trends
Competitive Landscape
Prospects
Table 15 Sales of Cigarettes by Tar Level: Volume 2001-2006
Table 16 Sales of Cigarettes by Tar Level: Value 2001-2006
Table 17 Sales of Cigarettes by Tar Level: % Volume Growth 2001-2006
Table 18 Sales of Cigarettes by Tar Level: % Value Growth 2001-2006
Table 19 Sales of Cigarettes by Price Band: % Volume Breakdown 2001-2006
Table 20 Sales of Cigarettes by Standard/Menthol: % Volume Breakdown 2001-2006
Table 21 Sales of Cigarettes by Tobacco Type: % Volume Breakdown 2001-2006
Table 22 Sales of Cigarettes by Filter Vs Non-filter 2001-2006
Table 23 Sales of Filter Cigarettes by Carbon Vs Non-carbon 2001-2006
Table 24 Sales of Cigarettes by Length 2001-2006
Table 25 Sales of Cigarettes by Pack Size 2001-2006
Table 26 Sales of Cigarettes by Pack Type 2001-2006
Table 27 Cigarettes Company Shares 2002-2006
Table 28 Cigarettes Brand Shares 2003-2006
Table 29 Forecast Sales of Cigarettes by Tar Level: Volume 2006-2011
Table 30 Forecast Sales of Cigarettes by Tar Level: Value 2006-2011
Table 31 Forecast Sales of Cigarettes by Tar Level: % Volume Growth 2006-2011
Table 32 Forecast Sales of Cigarettes by Tar Level: % Value Growth 2006-2011
Table 33 Forecast Sales of Cigarettes by Price Band: % Volume Breakdown 2006-2011
Table 34 Forecast Sales of Cigarettes by Standard/Menthol: % Volume Breakdown 2006-2011
Table 35 Forecast Sales of Cigarettes by Tobacco Type: % Volume Breakdown 2006-2011
Table 36 Forecast Sales of Cigarettes by Filter Vs Non-filter 2006-2011
Table 37 Forecast Sales of Filter Cigarettes by Carbon Vs Non-carbon 2006-2011
Table 38 Forecast Sales of Cigarettes by Length 2006-2011
Table 39 Forecast Sales of Cigarettes by Pack Size 2006-2011
Table 40 Forecast Sales of Cigarettes by Pack Type 2006-2011
CIGARS AND CIGARILLOS
Headlines
Trends
Competitive Landscape
Prospects
Sector Data
Table 41 Sales of Cigars by Subsector: Volume 2001-2006
Table 42 Sales of Cigars by Subsector: Value 2001-2006
Table 43 Sales of Cigars by Subsector: % Volume Growth 2001-2006
Table 44 Sales of Cigars by Subsector: % Value Growth 2001-2006
Table 45 Company Shares of Cigars Exluding Cigarillos 2002-2006
Table 46 Brand Shares of Cigars Exluding Cigarillos 2003-2006
Table 47 Company Shares of Cigarillos 2002-2006
Table 48 Brand Shares of Cigarillos 2003-2006
Table 49 Forecast Sales of Cigars by Subsector: Volume 2006-2011
Table 50 Forecast Sales of Cigars by Subsector: Value 2006-2011
Table 51 Forecast Sales of Cigars by Subsector: % Volume Growth 2006-2011
Table 52 Forecast Sales of Cigars by Subsector: % Value Growth 2006-2011
SMOKING TOBACCO
Headlines
Trends
Competitive Landscape
Prospects
Sector Data
Table 53 Sales of Smoking Tobacco by Subsector: Volume 2001-2006
Table 54 Sales of Smoking Tobacco by Subsector: Value 2001-2006
Table 55 Sales of Smoking Tobacco by Subsector: % Volume Growth 2001-2006
Table 56 Sales of Smoking Tobacco by Subsector: % Value Growth 2001-2006
Table 57 Forecast Sales of Smoking Tobacco by Subsector: Volume 2006-2011
Table 58 Forecast Sales of Smoking Tobacco by Subsector: Value 2006-2011
Table 59 Forecast Sales of Smoking Tobacco by Subsector: % Volume Growth 2006-2011
Table 60 Forecast Sales of Smoking Tobacco by Subsector: % Value Growth 2006-2011
TABACALERA DEL ORIENTE SAC
Strategic Direction
Key Facts
Summary 2 Tabacalera del Oriente SAC: Key Facts
Company Background
Production by Factory
Competitive Positioning