Cigarettes records a decline in volume sales in 2012
In 2012, cigarettes in Israel experienced a decline in volume sales. This decline can be attributed to rising prices due to higher taxation, a shift to RYO tobacco and greater awareness of the risks of smoking. A dramatic shift towards super slim, ultra-low tar cigarettes and short cigars took place in 2012 as these are perceived by smokers as less harmful.
In this context, it should be mentioned that a regional court rejected a legal case against cigarette manufacturers which claimed that they were misleading smokers by declaring some cigarettes as “light” in an attempt to make consumers think they were less harmful. The court declared that smokers were aware of tar and nicotine levels and that health warnings on cigarette packaging were clearly visible.
New taxation policy and its impact
In 2012, cigarettes faced a further increase in tax. The average price of a pack of cigarettes rose by NIS3.00, with minimum taxation reaching NIS12 per pack. Price increases spurred a shift from premium brands like Kent and Time to cheaper brands such as L&M, Pall Mall and Next or RYO tobacco. The only premium brand which generally maintained its share was Marlboro, which remained the most popular cigarette brand overall.
In addition, price rises led to an increase in illicit trade, especially from Palestine, particularly with regard to counterfeit Marlboro cigarettes.
Philip Morris Ltd (Israel) remains the leading player
Philip Morris Ltd (Israel) continued to lead cigarettes in Israel in 2012, importing popular brands such as Marlboro and L&M, although its share declined marginally. The company launched three new brands during the year, these being Marlboro Gold Touch, Marlboro Gold Fine Touch and L&M Forward with a menthol capsule.
New regulations approved in 2012
In 2012, various regulations regarding smoking were approved for implementation in the future. These included, for example, a total ban on advertising tobacco products, adding graphic health warnings to cigarette packs and increasing the font size of the heath warning. In addition, it will be forbidden to use images of fruit on flavoured tobacco so as not to associate it with anything healthy while tobacco companies will also be obliged to list the ingredients of their products on packaging and report annually to the Ministry of Health.
Cigarettes expected to see a further decline
Over the forecast period the tobacco industry is projected a further decline as a result of growing awareness of the risks associated with smoking and government efforts to limit tobacco companies' activities as much as possible. Some smokers are also expected to switch to low-additive or organic products, considering these to be less harmful.
Average unit price is expected to increase in most categories as a result of the government’s taxation policy, thus causing heavy smokers to opt for cheaper alternatives such as cheaper cigarette brands, RYO tobacco or cheap cigars.
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Discover the latest market trends and uncover sources of future market growth for the Tobacco industry in Israel with research from Euromonitor's team of in-country analysts.
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The Tobacco in Israel 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 Israel?
- What are the major brands in Israel?
- Which sector of the tobacco products market is the largest by value sales in Israel?
- Which sector of the tobacco products market has been growing the fastest, by volume and value, in Israel?
- Which sector is the most heavily taxed in Israel?
- Which companies dominate in the total tobacco market in Israel in terms of market share?
- What is the distribution channel split for the tobacco products market in Israel?
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This industry report originates from Passport, our Tobacco market research database.