Despite the improved performances in volume sales of cigarettes during the pandemic, cigarettes will be in decline in both volume and real value (at 2022 constant prices) over the forecast period. As consumers increasingly return to travelling abroad, they will go back to purchasing more cigarettes in duty free, impacting sales of tax-paid products through UK retailers.
Illicit trade is expected to grow in the initial years of the forecast period, as money-squeezed consumers will be keener to favour illicit sales in an effort to save money, especially during economically challenging periods. In the current environment, volumes of illicit sales are expected to grow, at the expense of legal sales.
The economy price band is expected to increase its share of cigarette volume sales from 72% in 2022 to 78% in 2027, as consumers are expected to continue downtrading, following the increase in cigarette prices coupled with the cost-of-living crisis. Consequently, big tobacco companies are increasingly focusing their efforts on the lower-priced tier to benefit from this shift in purchasing patterns.
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Cigarettes
RETAIL SALES OF DUTY PAID CIGARETTES The definition of cigarettes for the purposes of this study is duty-paid, machine manufactured white-stick products. This does not exclude brands of cigarettes that do not use white paper but it is designed to exclude the volume of non-machine manufactured products such as bidis/beedis (India) and papirosy (Russia), and other smoking products made with tobacco but that either do not resemble cigarettes as recognised in the US or Europe, or those that are not machine manufactured. The exclusion of these products is intended to give a more accurate picture of the "true" market for cigarettes and cigars which has been distorted in official statistics and published reports because of the inclusion of hybrid products. NB Please note that due to its central importance and integration into the industry mainstream, Indonesia’s market data does include hand-rolled kreteks DUTY-FREE sales are excluded from retail sales, as are herbal cigarettes. ILLICIT TRADE CIGARETTES Not included in retail sales, but split out separately in volume terms only. Defined as non-duty paid cigarettes (includes smuggled & counterfeit/fake products combined). Legitimate cross-border sales are considered duty-paid. Sales arising from a foreign national purchasing cheaper cigarettes in bulk in a neighbouring country for personal use and exported back are attributed to the country where the purchase is made (e.g. bulk cigarette sales by British nationals in France are attributed to France).
See All of Our DefinitionsThis report originates from Passport, our Cigarettes research and analysis database.
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