Austerity and stagnation characterise the tobacco market in Ireland
Continuing economic stagnation, distressed discretionary income levels and high unemployment rates all had a negative impact on the tobacco industry in 2012. To compound this tax increases and legislative restrictions continue to make life difficult for the Irish smoker. The 2012 Budget saw no change to this trend as the government continues to see the Tobacco sector as a source of much needed tax revenue. Recent renegotiations of the Anglo Irish Bank Promissory Note deal have lead to some suggestions that this perhaps is an indication that a modest recovery may be in the offing, although at this stage it is far too early to make a judgement.
Continued prevalence of illicit trade
While illicit trade volumes dropped slightly from 2011, the spectre of NIDP (Non Irish Duty Paid) cigarettes continues to haunt the industry with sources suggesting that 28% of cigarettes consumed in Ireland in 2012 evaded Irish excise taxes. Ongoing increases on VAT and excise has led many Irish consumers to forgo traditional retail channels to purchase their tobacco on the black market instead.
Stable competitive environment in 2012 over the previous year
The Irish tobacco industry can be classified as a text book oligopoly. The market is dominated by three major players: John Player, an Irish subsidiary of Imperial Tobacco, PJ Carroll, an Irish subsidiary of British American Tobacco and JTI Ireland, an Irish subsidiary of Japan Tobacco International. Over the forecast period, these companies are expected to remain the dominant players in all categories of the Irish tobacco market.
Consumers drift towards thrifty buying behaviour
Ongoing austerity measures in Ireland have drastically impacted consumer behaviour. Due to the high cost of cigarettes (Ireland has the highest cigarette prices in the EU) Irish customers continue to look for value for money alternatives in the cigarette category. This has seen customers both “trade out” to the illegal market and “trade down” to cheaper tobacco alternatives. This change in consumer behaviour has resulted in huge growth for the RYO (Roll Your Own) smoking tobacco category.
Future challenges lie ahead
Tax increases and legislative restrictions continue to make life difficult for the Irish smoker. The 2013 Budget saw no change to this trend as the Irish Government added 10 cents to the cost of a packet of cigarettes.
The introduction of new legislation which requires the use of graphic warnings on all tobacco products from February 2013 also has the potential to curtail current retail volume sales.
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Discover the latest market trends and uncover sources of future market growth for the Tobacco industry in Ireland 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 Ireland, our research will save you time and money while empowering you to make informed, profitable decisions.
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The Tobacco in Ireland 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 Ireland?
- What are the major brands in Ireland?
- Which sector of the tobacco products market is the largest by value sales in Ireland?
- Which sector of the tobacco products market has been growing the fastest, by volume and value, in Ireland?
- Which sector is the most heavily taxed in Ireland?
- Which companies dominate in the total tobacco market in Ireland in terms of market share?
- What is the distribution channel split for the tobacco products market in Ireland?
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.