Stricter legislation causes deep changes in the tobacco industry
In addition to the taxes that were introduced in late 2011, in February 2012, a regulation that stated how the Organic Law for the Regulation and Control of Tobacco should be executed was published. This gave details and guidelines on how to implement the law and also allowed for the beginning of a new tobacco-control era. The main result of the publication of this regulation was the introduction in mid-2012 of health warning images and a ban on smoking in public places.
Growth slows across the board as a result of legislative changes
The main tobacco category affected by the implementation of the tobacco-control law in 2012 was cigarettes. The mix of actions taken by the government, through a ban of the consumption of tobacco products in closed public places, a new requirement of health warnings and a twice-yearly review of the ICE (Impuesto a Consumos Especiales or special goods tax) translated into weakened volume sales of tobacco products in 2012.
Sales of individual cigarettes increase
As cigarette packs became more expensive in 2012, the trend towards consumption of single sticks increased among more price-sensitive smokers. As a result, more cigarettes were sold through independent small grocers, which was the only distribution channel that continued to offer individual cigarettes.
Contraband won’t fill the gap
The reduction in consumption of retail cigarettes in 2012 was not believed to have been supplanted by a corresponding increase in contraband. Whereas typically the inverse relationship between formal sales and illicit trade help to prop-up the total market, there has been an increasing movement among smokers towards stopping or decreasing their cigarette smoking frequency. Beyond the retail price increase mainly due to the ICE tax, concerns about the consumption of potentially harmful products is impacting consumption of cigarettes.
Dark future lies ahead
As Ecuador has become a stricter country with more comprehensive legislation to control and reduce smoking prevalence, the forecast period looks cloudy for tobacco manufacturers. It is very likely that the legislation might be even more severe during the forecast period, given that the ICE is revised biannually, but, even if it remains the same, it will still have an impact on constant value sales, mainly of cigarettes, which are expected to decline over the forecast period.
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Discover the latest market trends and uncover sources of future market growth for the Tobacco industry in Ecuador 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 Ecuador, our research will save you time and money while empowering you to make informed, profitable decisions.
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The Tobacco in Ecuador 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 Ecuador?
- What are the major brands in Ecuador?
- Which sector of the tobacco products market is the largest by value sales in Ecuador?
- Which sector of the tobacco products market has been growing the fastest, by volume and value, in Ecuador?
- Which sector is the most heavily taxed in Ecuador?
- Which companies dominate in the total tobacco market in Ecuador in terms of market share?
- What is the distribution channel split for the tobacco products market in Ecuador?
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This industry report originates from Passport, our Tobacco market research database.