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Country Report

Dominican Republic Flag Tobacco in Dominican Republic

| Pages: 57

Price: US$1,900

About this Report

EXECUTIVE SUMMARY

One of the worst category declines ever because of fiscal reform

On 1 January 2013, the Dominican government implemented the most draconian fiscal austerity package in recent history, which triggered the worst economic slowdown in a decade. A wide range of public spending cuts was implemented. All types of taxes, without exemption, were raised. In cigarettes, the tax raise impact was two-fold: a 13% VAT increase and a 12% specific excise increase. As a consequence, prices grew more than double inflation (to 10%) and to make things worse, that was done within the context of consumer spending rationalisation across all categories to overcome the economic slowdown. The category volume decline was steep at -10%.

Illicit trade skyrockets

The economic slowdown along with substantial price increases led to massive downtrading. A big part of that downtrading went to licit economy brands. However, another big chunk went to cheaper, illicit products. Illicit trade saw its largest growth in many years (15%): only in 2007, when the government had the idea of increasing 5-fold the ad valorem tax, was the growth higher than in 2013. Illicit trade in the Dominican Republic has one of the most “fertile grounds” for growth: a relatively high price versus all its neighbours, very porous borders that include many non-controlled accesses by sea and a wild frontier with a failed state (i.e. Haiti), distribution channels dominated by informal, atomised independent small grocers difficult to police (even to tax), and a resource-short government with good intentions but serious policing limitations on the ground. Besides the major growth in numeric terms, illicit trade passed through a psychological threshold: it began to be sold in wholesalers by cases, more openly than ever.

Philip Morris Dominicana SA under attack

Philip Morris Dominicana has had a clear dominance of the cigarette category since Philip Morris bought Industria del Tabaco Leon Jimenes, the then leader, back in 2006. The company focused on upgrading and consolidating the best-selling brand, mid-priced Nacional, while building its premium range with Marlboro and later complementing with Virginia Slims. The economy segment was a nuisance that only served a tactical purpose: to defend from below the leading brand. Anyway, it was a dormant, small segment...until 2013, when slowdown-driven downtrading helped it to grow from 5% to 13% of total volume sales. Massive downtrading from Marlboro and especially Nacional was mainly capitalised by illicit trade, BAT’s Viceroy and Philip Morris’ L&M. As a result, Philip Morris saw its cannibalised profits decline and archrival BAT gaining four volume percentage points in share to 12% (while La Tabacalera remained stable at 4%). The worst part for Philip Morris is that this first serious challenge to its dominance is not clear to be over yet: the economy segment is still growing, and as long as that segment grows, Viceroy, the most established brand in the segment, will grow, taking further share away from Philip Morris.

Colmados remain unchallenged as the main sales channel

Modern grocery has been growing as a sales channel mostly due to the aggressive selling space expansion during the last few years. There have even been talks among retailers about the inevitable demise of traditional grocery. However, the economic slowdown has had a two-fold impact that helped independent small grocers (i.e. colmados) to strengthen their sales position: modern grocery halted its selling space expansion, and consumers (most of them cash-strapped) did not have the resources to buy frequently from modern grocery outlets. Hence, they were loyal to their “good old” colmados, where they can buy per stick, with credit, and even with a delivery service.

Volume decline to smooth out over the forecast period

The worst of the fiscal package is over. Over the forecast period, only normal annual raises will be applied to the specific excise. It is not expected that tax-driven price increases will be as sharp as recently. In fact, VAT should even decrease by two percentage points in 2016. As a consequence, illicit trade should become less detrimental to licit volume (in fact, it is expected that its volume CAGR will go down from 4% over the review period to 0% during the forecast period). This trend will help volumes to decline more smoothly than during the review period (from -6% CAGR in the latter to -3% over the forecast period).

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Overview

Discover the latest market trends and uncover sources of future market growth for the Tobacco industry in Dominican Republic with research from Euromonitor's team of in-country analysts.

Find hidden opportunities in the most current research data available, understand competitive threats with our detailed market analysis, and plan your corporate strategy with our expert qualitative analysis and growth projections.

If you're in the Tobacco industry in Dominican Republic, our research will save you time and money while empowering you to make informed, profitable decisions.

When you purchase this report, you also get the data and the content from these category reports in Dominican Republic for free:

The Tobacco in Dominican Republic market research report includes:

  • Analysis of key supply-side and demand trends
  • Detailed segmentation of international and local products
  • Historic volumes and values, company and brand market shares
  • Five year forecasts of market trends and market growth
  • Production, imports by origin, exports by destination
  • Robust and transparent market research methodology, conducted in-country

Our market research reports answer questions such as:

  • What is the market size of Tobacco in Dominican Republic?
  • What are the major brands in Dominican Republic?
  • Which sector of the tobacco products market is the largest by value sales in Dominican Republic?
  • Which sector of the tobacco products market has been growing the fastest, by volume and value, in Dominican Republic?
  • Which sector is the most heavily taxed in Dominican Republic?
  • Which companies dominate in the total tobacco market in Dominican Republic in terms of market share?
  • What is the distribution channel split for the tobacco products market in Dominican Republic?

Why buy this report?

  • Gain competitive intelligence about market leaders
  • Track key industry trends, opportunities and threats
  • Inform your marketing, brand, strategy and market development, sales and supply functions

This industry report originates from Passport, our Tobacco market research database.

Table of Contents

Tobacco in Dominican Republic - Industry Overview

EXECUTIVE SUMMARY

One of the worst category declines ever because of fiscal reform

Illicit trade skyrockets

Philip Morris Dominicana SA under attack

Colmados remain unchallenged as the main sales channel

Volume decline to smooth out over the forecast period

OPERATING ENVIRONMENT

Legislation

  • Summary 1 Legislation Summary at a Glance

Minimum legal smoking age

Smoking prevalence

  • Table 1 Smoking Prevalence in Adult Population 2008-2013
  • Table 2 Number of Adult Smokers by Gender 2008-2013

Tar levels

Health warnings

Advertising and sponsorship

Point-of-sale display bans

Smoking in public places

Low ignition propensity (LIP) regulation

Flavoured tobacco product ban

Plain packaging

‘Reduced harm’

Electronic cigarettes

Litigation

Death by cause

  • Table 3 Death by Cause 2009-2013

TAXATION AND PRICING

Duty paid packet marks

Taxation rates

  • Table 4 Taxation and Duty Levies 2008-2013

Average cigarette pack price breakdown

  • Table 5 Average Cigarette Pack Price Breakdown: Brand Examples

PRODUCTION/IMPORTS/EXPORTS

  • Table 6 Trade Statistics – Cigarettes 2008-2013
  • Table 7 Trade Statistics – Tobacco Leaf 2008-2013
  • Table 8 Trade Statistics – Cigarettes 2009-2013

Illicit trade in cigarettes

MARKET INDICATORS

  • Table 9 Illicit Trade Estimate of Cigarettes: Volume 2008-2013

MARKET DATA

  • Table 10 Sales of Tobacco by Category: Volume 2008-2013
  • Table 11 Sales of Tobacco by Category: Value 2008-2013
  • Table 12 Sales of Tobacco by Category: % Volume Growth 2008-2013
  • Table 13 Sales of Tobacco by Category: % Value Growth 2008-2013
  • Table 14 Forecast Sales of Tobacco by Category: Volume 2013-2018
  • Table 15 Forecast Sales of Tobacco by Category: Value 2013-2018
  • Table 16 Forecast Sales of Tobacco by Category: % Volume Growth 2013-2018
  • Table 17 Forecast Sales of Tobacco by Category: % Value Growth 2013-2018

SOURCES

  • Summary 2 Research Sources

Tobacco in Dominican Republic - Company Profiles

La Aurora CxA in Tobacco (Dominican Republic)

STRATEGIC DIRECTION

KEY FACTS

  • Summary 3 La Aurora CxA: Key Facts

COMPANY BACKGROUND

PRODUCTION

COMPETITIVE POSITIONING

  • Summary 4 La Aurora CxA: Competitive Position 2013

La Tabacalera CxA in Tobacco (Dominican Republic)

STRATEGIC DIRECTION

KEY FACTS

  • Summary 5 La Tabacalera CxA: Key Facts

COMPANY BACKGROUND

PRODUCTION

COMPETITIVE POSITIONING

  • Summary 6 La Tabacalera CxA: Competitive Position 2013

Tabacalera A Fuente y Cia in Tobacco (Dominican Republic)

STRATEGIC DIRECTION

KEY FACTS

  • Summary 7 Tabacalera A Fuente y Cia: Key Facts

COMPANY BACKGROUND

PRODUCTION

COMPETITIVE POSITIONING

  • Summary 8 Tabacalera A Fuente y Cia: Competitive Position 2013

Cigarettes in Dominican Republic - Category Analysis

HEADLINES

TRENDS

COMPETITIVE LANDSCAPE

NEW PRODUCT DEVELOPMENTS

  • Summary 9 Cigarettes: New Product Launches

DISTRIBUTION

PROSPECTS

CATEGORY BACKGROUND

Cigarettes: price bands

  • Summary 10 Cigarette Price Band Definitions

Cigarettes: tobacco blend

Cigarettes: standard/menthol/capsule

Cigarettes: filter/non-filter

Cigarettes: carbon/standard filter

Cigarettes: filter length

Cigarettes: regular vs slims vs superslims vs microslims

Cigarettes: pack size

Cigarettes: pack type

CATEGORY DATA

  • Table 18 Sales of Cigarettes by Tar Level: Volume 2008-2013
  • Table 19 Sales of Cigarettes by Tar Level: Value 2008-2013
  • Table 20 Sales of Cigarettes by Tar Level: % Volume Growth 2008-2013
  • Table 21 Sales of Cigarettes by Tar Level: % Value Growth 2008-2013
  • Table 22 Sales of Cigarettes by Price Band: % Volume Breakdown 2008-2013
  • Table 23 Sales of Cigarettes by Standard/Menthol/Capsule: % Volume Breakdown 2008-2013
  • Table 24 Sales of Cigarettes by Tobacco Type: % Volume Breakdown 2008-2013
  • Table 25 Sales of Cigarettes by Filter vs Non-filter: % Volume 2008-2013
  • Table 26 Sales of Filter Cigarettes by Carbon vs Non-carbon: % Volume 2008-2013
  • Table 27 Sales of Cigarettes by Length: % Volume 2008-2013
  • Table 28 Sales of Cigarettes by Regular/Slim/Superslim/Microslim: % Volume 2008-2013
  • Table 29 Sales of Cigarettes by Pack Size: % Volume 2008-2013
  • Table 30 Sales of Cigarettes by Pack Type: % Volume 2008-2013
  • Table 31 NBO Company Shares of Cigarettes: % Volume 2009-2013
  • Table 32 LBN Brand Shares of Cigarettes: % Volume 2009-2012
  • Table 33 Sales of Cigarettes by Distribution Format: % Volume 2008-2013
  • Table 34 Production, Imports and Exports of Cigarettes: Total Volume 2008-2013
  • Table 35 Forecast Sales of Cigarettes by Tar Level: Volume 2013-2018
  • Table 36 Forecast Sales of Cigarettes by Tar Level: Value 2013-2018
  • Table 37 Forecast Sales of Cigarettes by Tar Level: % Volume Growth 2013-2018
  • Table 38 Forecast Sales of Cigarettes by Tar Level: % Value Growth 2013-2018
  • Table 39 Forecast Sales of Cigarettes by Price Band: % Volume Breakdown 2013-2018
  • Table 40 Forecast Sales of Cigarettes by Standard/Menthol/Capsule: % Volume Breakdown 2013-2018
  • Table 41 Forecast Sales of Cigarettes by Tobacco Type: % Volume Breakdown 2013-2018
  • Table 42 Forecast Sales of Cigarettes by Filter vs Non-filter: % Volume 2013-2018
  • Table 43 Forecast Sales of Filter Cigarettes by Carbon vs Non-carbon: % Volume 2013-2018
  • Table 44 Forecast Sales of Cigarettes by Length: % Volume 2013-2018
  • Table 45 Forecast Sales of Cigarettes by Regular/Slim/Superslim/Microslim: % Volume 2013-2018
  • Table 46 Forecast Sales of Cigarettes by Pack Size: % Volume 2013-2018
  • Table 47 Forecast Sales of Cigarettes by Pack Type: % Volume 2013-2018

Cigars in Dominican Republic - Category Analysis

HEADLINES

TRENDS

HANDMADE VS MACHINE-MANUFACTURED SPLITS

COMPETITIVE LANDSCAPE

NEW PRODUCT DEVELOPMENTS

  • Summary 11 Cigars: New Product Launches

DISTRIBUTION

PROSPECTS

CATEGORY DATA

  • Table 48 Sales of Cigars by Category: Volume 2008-2013
  • Table 49 Sales of Cigars by Category: Value 2008-2013
  • Table 50 Sales of Cigars by Category: % Volume Growth 2008-2013
  • Table 51 Sales of Cigars by Category: % Value Growth 2008-2013
  • Table 52 Sales of Cigars by Handmade vs Machine-manufactured: % Volume Breakdown 2008-2013
  • Table 53 Sales of Cigars by Handmade vs Machine-manufactured: % Value Breakdown 2008-2013
  • Table 54 NBO Company Shares of Cigars Excluding Cigarillos: % Volume 2009-2013
  • Table 55 LBN Brand Shares of Cigars Excluding Cigarillos: % Volume 2009-2012
  • Table 56 Distribution of Cigars by Format: % Volume 2008-2013
  • Table 57 Forecast Sales of Cigars by Category: Volume 2013-2018
  • Table 58 Forecast Sales of Cigars by Category: Value 2013-2018
  • Table 59 Forecast Sales of Cigars by Category: % Volume Growth 2013-2018
  • Table 60 Forecast Sales of Cigars by Category: % Value Growth 2013-2018

Segmentation

This market research report includes the following:

  • Tobacco
    • Cigarettes
      • High Tar Cigarettes
      • Mid Tar Cigarettes
      • Low Tar Cigarettes
      • Ultra Low Tar Cigarettes
    • Cigars
      • Cigars Excluding Cigarillos
        • Large Cigars
        • Standard Cigars
        • Small Cigars
      • Cigarillos
    • Smoking Tobacco
      • RYO Tobacco
      • Pipe Tobacco
    • Smokeless Tobacco
      • Chewing Tobacco
        • Asian-Style Chewing Tobacco
        • US-Style Chewing Tobacco
        • Other Chewing Tobacco
      • Snuff
        • Moist Snuff
          • US-Style Moist Snuff ('Dip')
            • Loose US-Style Moist Snuff
            • Portion US-Style Moist Snuff
          • Swedish-Style Snus
            • Loose Swedish-Style Snus
            • Portion Swedish-Style Snus
          • Asian Style Creamy Snuff
        • Dry Snuff
        • Hard Snuff
    • Cigarettes Including RYO Stick Equivalent
      • High Tar Cigarettes
      • Mid Tar Cigarettes
      • Low Tar Cigarettes
      • Ultra Low Tar Cigarettes
      • RYO Cigarettes

Statistics Included

For each category and subcategory you will receive the following data in Excel format:

From Passport

  • Market Sizes
  • Company Shares
  • Brand Shares
  • Distribution
  • Pricing
  • Analysis by Type
  • Cigarettes by Blend
  • Cigarettes by Carbon Filter/Non-Carbon Filter
  • Cigarettes by Filtered/Unfiltered
  • Cigarettes by Length
  • Cigarettes by Pack Size
  • Cigarettes by Pack Type
  • Cigarettes by Price Band
  • Cigarettes by Slim/Superslim/Microslim/Regular
  • Cigarettes by Standard/Menthol/Capsule
  • Illicit Trade Penetration
  • Products by Ingredient
  • Smoking population - number of adult smokers
  • Smoking prevalence - % of adult population
  • Taxation
  • Trade Statistics - Volume

Market size details:

  • Retail volume
  • Retail volume % growth
  • Retail volume per capita
  • Retail value retail selling price % growth
  • Retail value retail selling price local currency, USD, EUR, GBP, CHF, JPY
  • Retail value retail selling price per capita local currency, USD, EUR, GBP, CHF, JPY
  • Illicit trade volume
  • Illicit trade volume % growth
  • Illicit trade volume per capita
  • Retail volume (sticks)
  • Retail volume (sticks) % growth
  • Retail volume (sticks) per capita
  • Retail plus illicit trade
  • Retail plus illicit trade % growth
  • Retail plus illicit trade per capita

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