Steep decline in sales continues in context of economic downturn
In 2012, Greece’s smoking population continued to be higher than the Western European average, yet it witnessed a decline in context of the economic crisis that forced many financially ridden Greeks to quit smoking. With unemployment rates rising rapidly and huge cuts in salaries ever more Greeks are facing severe financial problems and are forced to quit smoking in order to save money. Smoking has become an increasingly unaffordable habit for most Greeks, since tobacco product prices increased at a rapid pace as the government implemented new taxation measures in order to increase public revenues. Within this framework, all categories witnessed steep declines in both value and volume terms and price wars became increasingly common as companies tried all means to protect their shares.
RYO benefits from price hikes in cigarettes
Although a number of smokers opted to quit smoking, this only applied to a proportion of the smoking population given that many smokers found the habit a relief from the stress of daily life in a poor economy. With cigarette prices experiencing hikes in line with new taxation, a mass migration from cigarettes to RYO tobacco was also witnessed as the latter is perceived as a cheaper solution. Manufacturers increasingly invested in the lucrative RYO tobacco, introducing either line extensions of their flagship cigarette brands in RYO format so that those that migrate from cigarettes to RYO can opt for the same brand, or by introducing a wider range of packages that present more options for the consumers. RYO is undoubtedly the big winner of the economic crisis registering the best performance within Greek tobacco.
Taxes comprise 81% of tobacco products unit price in 2012
As the government was forced to employ a series of austerity measures to increase public revenue, a tax increase on luxury products such as tobacco and alcoholic drinks became unavoidable. Since 2008, tobacco taxes increased several times, leading to increases in the final selling price of over 30%. Given that this consecutive price increases resulted in major changes in smoking patterns (migration to RYO tobacco or economy cigarettes) new legislation affecting the minimum sale price of tobacco products resulted in reducing the gap between premium, mid-priced and economy prices. A new tax structure was introduced in November 2012, yet it came into effect in January 2013, mostly affecting RYO tobacco and economy cigarettes.
Newsagent-tobacconists/kiosks remains the key distribution channel for tobacco products
The majority of volume sales of cigarettes and RYO tobacco in Greece took place in newsagents-tobacconists/kiosks in 2012. Larger kiosks also sell cigars and cigarillos as well as pipe tobacco. Being located in every neighbourhood and often staying open for 24 hours, kiosks are a byword for tobacco retailing in the minds of Greek consumers. The proliferation of large department stores, which sell tobacco products in special areas within their premises, did not result in a significant change in distribution trends. Such outlets are mostly focused on cigars and more specialised products and in the context of the economic downturn, many of them went bankrupt or ceased operations. Internet retailing accounted for only a fraction of sales of overall tobacco products and is most prevalent in cigars.
A gloomy future is forecast for tobacco in Greece
The price increases implemented at the beginning of 2013 will influence tobacco over the forecast period. Smoking rates will decline as a result. Given that price hikes affect mostly RYO and economy brands, great changes will take place with regard to smoking patterns and brand/product preferences. Contraband sales are predicted to record great increases and to affect sales as more consumers will be keen to find a solution to reduce the cost of smoking.
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Discover the latest market trends and uncover sources of future market growth for the Tobacco industry in Greece 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 Greece, 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 Greece for free:
The Tobacco in Greece 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 Greece?
- What are the major brands in Greece?
- Which sector of the tobacco products market is the largest by value sales in Greece?
- Which sector of the tobacco products market has been growing the fastest, by volume and value, in Greece?
- Which sector is the most heavily taxed in Greece?
- Which companies dominate in the total tobacco market in Greece in terms of market share?
- What is the distribution channel split for the tobacco products market in Greece?
Why buy this report?
- Gain competitive intelligence about market leaders
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- Inform your marketing, brand, strategy and market development, sales and supply functions
This industry report originates from Passport, our Tobacco market research database.