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Although per capita gross incomes and spending accelerated in 2015, Jordan’s economy is struggling due to an influx of refugees, rising income inequality and growth in the low-income population. Nevertheless, strong population growth supports rising tobacco consumption, while the closure of the border with Syria has curbed the illicit cigarette trade. Economic and political stability, the high prevalence of cigarette smoking and the tradition of shisha all bode well for future tobacco sales.
This report analyses the market for tobacco in Jordan. For the purposes of the study, the market has been defined as follows:
Cigars, Cigarillos and Smoking Tobacco
Smokeless Tobacco and Vapour Products
Explanations of terminology used in this report are as follows:
GBO refers to Global Brand Owner, which is the ultimate owner of a brand.
NBO refers to National Brand Owner, which is the company licensed to distribute a brand on behalf of a GBO. The NBO may be a subsidiary of a GBO or it may be a completely separate company.
Retail refers to sales of tobacco through retail outlets including supermarkets, hypermarkets, discounters, convenience stores, internet and other store and non-store channels, as well as sales of tobacco through bar-tobacconists and hotels/restaurants/bars.
Duty-paid retail sales are legitimate sales with tax applied to the final price.
Illicit trade refers to sales of duty-not-paid (or DNP) tobacco.
Market sizes are researched at category level, lower data levels are modelled.
Although cross-border and duty-free sales are considered legitimate, they are excluded from duty-paid sales.
Illicit trade (DNP) tobacco refers to contraband, counterfeit and unbranded tobacco, as well as illicit whites.
Attitudes towards tobacco consumption in Jordan are generally not unfavourable, and the country has a very high smoking prevalence by international standards. With many Jordanians regarding tobacco use as a right, it is common for people to light up cigarettes anywhere and at any time, including office workers at their desks, taxi drivers and service staff. Moreover, many young people in Jordan consider smoking to be cool and a sign of maturity and smoking prevalence is high among underage boys and girls as a result.
However, the introduction of a partial public smoking ban has led increasing numbers of people to regard smoking in public as inconsiderate and a potentially danger to public health. Nevertheless, taboos surrounding smoking in enclosed spaces such as public transport which exist in other countries are less prevalent in Jordan.
In addition to the high popularity of cigarettes, many people in Jordan also enjoying smoking traditional water pipes, known as shisha or arguila, on a regular basis. Shisha smoking is a common part of socialising, especially among men.
Smoking prevalence in Jordan is among the highest in the world, with particularly high smoking prevalence among men. According to The Tobacco Atlas, 43.3% of adult men in Jordan smoke cigarettes daily, while 8.5% of women are daily cigarette smokers. In addition, smoking prevalence in Jordan is on the increase, bucking the global trend of falling tobacco use.
The generally favourable attitudes towards smoking in Jordan and the lax approach to the enforcement of antitobacco laws have led to the emergence of anti-smoking organisations. The Jordan National Anti-Smoking Society lobbies politicians with the aim of encouraging the passing of stronger anti-tobacco laws and a more stringent approach to the enforcement of current tobacco control laws, while Tobacco Free Jordan is an organisation which focuses on influencing public attitudes towards smoking, primarily through its social media presence, although Tobacco Free Jordan has also been known to undertake media and print advertising campaigns to bring the dangers of smoking to the attention of the country’s population.
Innovation and new product development in cigarettes tends to be quite muted, and in recent years has focused on new packaging formats which offer greater convenience and carbon filters, which are promoted as reducing the potential harm of cigarette smoke.
One driver of innovation in cigarettes is competition among premium brands which appeal to high-income consumers, the numbers of whom are growing and who often seek to signal status through their choice of cigarette brand. Nevertheless, the majority of new brands and new variants in the category in recent years have focused on economy products which appeal to Jordan’s low-income majority, a consumer group which is also increasing in size.
Retail sales of cigarettes are set to continue growing over the forecast period, although at a slower pace than the growth recorded during the review period, as the Jordanian Government has recently taken a more stringent approach to reducing the country’s high smoking prevalence, with a particular focus on discouraging young people from smoking. Retail volume sales of cigars are set to increase marginally, while pipe tobacco is set to record positive retail volume growth. However, like cigarettes, growth rates are set to slow down in pipe tobacco as stronger government efforts to discourage the smoking of shisha can be expected to suppress sales.
Disposable income levels in Jordan are higher than the Middle East average. The lowest income segment E is the largest and fastest growing, while income segment A is the second largest and second fastest growing, which means high and rising levels of income disparity.
This is reflected in sales of cigarettes, with very cheap economy brands and the most expensive premium brands prominent among the top sellers in the category. This is also reflected in the illicit trade, which largely comprises very cheap counterfeit brands on the one hand and illicitly imported non-duty paid premium brands on the other.
The choice of cigarette brand is considered to be an indicator of economic status in Jordan and the smoking of expensive imported cigarette brands such as Parliament and Davidoff is regarded as indicative of affluence or financial capacity.
Jordan’s population is growing strongly and this is primarily due to its relatively high birth rate, which means a young population. Furthermore, tobacco use is high amongst young people in Jordan, including underage teenage smokers, with attitudes towards tobacco less unfavourable among young people in the country than elsewhere in the world.
Cigarettes are widely available in Jordan, not least as there is no requirement for retailers to obtain a licence before selling tobacco products. Supermarkets and independent small grocers are popular distribution channels for cigarettes, while cigarette sales also strong through newsagent-tobacconists/kiosks, retail outlets which are virtually ubiquitous in Amman and prevalent elsewhere in Jordan.
Newsagent-tobacconists/kiosks and tobacco specialists are the leading distribution channels for shisha pipe tobacco and cigars and cigarillos. It has been noted by anti-tobacco groups that the ease with which consumers have access to tobacco is one of the main reasons for the country’s very high smoking prevalence.
Tobacco vending machines are completely banned in Jordan as the law requires a salesperson to verify that the purchaser of any tobacco product is over 18 years old.
The illicit trade penetration in cigarettes in Jordan peaked at 3.9 billion sticks in 2012, 40% of total retail plus illicit trade volume sales in the category. Subsequently, substantial declines were achieved in the illicit cigarette trade, with just 408 million sticks being sold through the illicit cigarette trade in 2015. This was mainly due to tighter controls on Jordan’s borders with Syria and Iraq, which were entry points for many smuggled cigarettes. However, 2016 saw an increase in the illicit cigarette trade after tax hikes substantially increased the cost of a pack of cigarettes.
The fact that foreign cigarette brands are typically viewed as more prestigious and of higher quality than local brands supports demand for smuggled cigarettes, not to mention that illicitly traded cigarettes fill price gaps in the category in which sales are dominated by economy brands on one hand and premium brands on the other.
Industry experts have claimed that up to 25% of smoking tobacco used in shisha pipes in Jordan is smuggled and tax-free. In addition, trade interviews reveal that illicitly traded products account for a significant proportion of cigars smoked in Jordan. This is because of high taxes on cigars and the difficulties involved in obtaining cigar trading licences. There have even been allegations of corruption in the issuing of cigar trading licences and in the supply of cigars in general.
Like many countries in the Middle East, Jordan has no minimum smoking age, although it is forbidden for anyone under the age of 18 to smoke shisha in a coffee shop. Furthermore, it is prohibited to sell any tobacco products or provide water pipes to minors, legally defined as those under the age of 18.
Nevertheless, underage smoking is a major concern in Jordan. Smoking cigarettes and water pipes is widely regarded as sign of maturity among teenagers generally in Jordan, as well as a sign of manhood among teenage boys. 17.4% of underage boys in Jordan smoke cigarettes daily, as well as 6.6% of underage girls, with the prevalence of daily water pipe usage considerably higher. Jordan thus has among the highest underage smoking prevalence rates in the world.
The second half of the review period saw the government of Jordan take a more serious approach to curbing smoking prevalence with the adoption of the country’s Tobacco Control Strategy 2016-18. This included banning shops selling tobacco from being located less than 250m away from schools, a move which came into effect in 2015, increases in cigarette taxes and the introduction of a more comprehensive public smoking ban.
Jordanian law imposes a 10mg per stick limit on tar levels in cigarettes. Cigarettes with lower tar levels are generally preferred, not least as there is no prohibition on the use of terms such as “light”, “low-tar” and “mild” in cigarette branding, while the general preference is for smoking low-tar, low-nicotine cigarettes on a more regular basis.
The direct advertising of tobacco is completely banned in Jordan and this includes all online, television and radio, print media and outdoor advertising as well as advertising at points of sale. Tobacco companies and other parties ignoring this ban face stiff financial penalties.
There is no official ban on tobacco companies sponsoring events or sports teams in Jordan. In addition, tobacco companies are permitted to use incentive schemes to encourage retailers and on-trade operators to promote and sell their cigarette brands. In fact, the sponsorship of events and parties and the promotion of brands in bars remain the primary methods of tobacco promotion.
All cigarette packs sold in Jordan must carry textual and graphic health warnings, which must cover at least 40% of the front and rear surfaces of the pack. Regulations stipulate font style, font size and colour, and/or warnings must be printed in Arabic. There are five different health warnings, which are rotated regularly. There are currently no moves towards plain packaging for tobacco products in Jordan.
Since 2009, there has been a partial public smoking ban in effect in Jordan which prohibits smoking in all enclosed public spaces, including all healthcare, government and public transport facilities and most educational facilities as well as cinemas, theatres, libraries and museums. This ban was extended in 2016 to include universities, indoor offices and workplaces, as well as cigarette smoking in on-trade outlets, although it does not cover the use of water pipes in restaurants, cafés and bars.
Those lighting up in prohibited areas risking penalties of three months in prison and maximum fines of up to JOD200. Those allowing smokers to light up in public facilities risk 9-month prison sentences and fines ranging between JOD1,000 and JOD3,000. With the strengthening of the smoking ban in 2016, the Ministry of Health appointed 566 officers to oversee the ban’s implementation, although press reports indicate that the smoking ban is widely flouted in Jordan as many people regard it as their right to smoke wherever and wherever they choose.
Taxation and duty levies
The tax on cigarettes in Jordan was raised from JOD0.45 per stick to JOD1.20 during 2016.
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Chart 1 Tobacco in Jordan in 2016 Chart 2 Jordan Socioeconomic Trend
Taxation and duty levies
Table 1 Sales of Tobacco by Category: Volume 2011-2016 Table 2 Sales of Tobacco by Category: Value 2011-2016 Table 3 Sales of Tobacco by Category: % Volume Growth 2011-2016 Table 4 Sales of Tobacco by Category: % Value Growth 2011-2016 Table 5 Forecast Sales of Tobacco by Category: Volume 2016-2021 Table 6 Forecast Sales of Tobacco by Category: Volume 2016-2021 Table 7 Forecast Sales of Tobacco by Category: Value 2016-2021 Table 8 Forecast Sales of Tobacco by Category: % Volume Growth 2016-2021 Table 9 Forecast Sales of Tobacco by Category: % Value Growth 2016-2021
Chart 3 Cigarettes: Various Brands Chart 4 Cigarettes: Viceroy Brand Chart 5 Cigarettes: Anderson Brand
Table 10 Sales of Cigarettes: Volume 2011-2016 Table 11 Sales of Cigarettes by Category: Value 2011-2016 Table 12 Sales of Cigarettes: % Volume Growth 2011-2016 Table 13 Sales of Cigarettes by Category: % Value Growth 2011-2016 Table 14 Forecast Sales of Cigarettes: Volume 2016-2021 Table 15 Forecast Sales of Cigarettes by Category: Value 2016-2021 Table 16 Forecast Sales of Cigarettes: % Volume Growth 2016-2021 Table 17 Forecast Sales of Cigarettes by Category: % Value Growth 2016-2021 Table 18 NBO Company Shares of Cigarettes: % Volume 2012-2016 Table 19 LBN Brand Shares of Cigarettes: % Volume 2013-2016 Table 20 Sales of Cigarettes by Distribution Format: % Volume 2011-2016 Summary 1 Cigarettes Pricing
CIGARS, CIGARILLOS AND SMOKING TOBACCO
Chart 6 Cigarillos: King Edward Brand Chart 7 Pipe Tobacco: Mazaya Brand Chart 8 Pipe Tobacco: Mazaya Brand
Table 21 Sales of Cigars, Cigarillos and Smoking Tobacco by Category: Volume 2011-2016 Table 22 Sales of Cigars, Cigarillos and Smoking Tobacco by Category: Value 2011-2016 Table 23 Sales of Cigars, Cigarillos and Smoking Tobacco by Category: % Volume Growth 2011-2016 Table 24 Sales of Cigars, Cigarillos and Smoking Tobacco by Category: % Value Growth 2011-2016 Table 25 Forecast Sales of Cigars, Cigarillos and Smoking Tobacco by Category: Volume 2016-2021 Table 26 Forecast Sales of Cigars, Cigarillos and Smoking Tobacco by Category: Value 2016-2021 Table 27 Forecast Sales of Cigars, Cigarillos and Smoking Tobacco by Category: % Volume Growth 2016-2021 Table 28 Forecast Sales of Cigars, Cigarillos and Smoking Tobacco by Category: % Value Growth 2016-2021 Table 29 NBO Company Shares of Smoking Tobacco: % Volume 2012-2016 Table 30 LBN Brand Shares of Smoking Tobacco: % Volume 2013-2016 Table 31 Distribution of Cigars and Cigarillos by Format: % Volume 2011-2016 Table 32 Distribution of Smoking Tobacco by Format: % Volume 2011-2016 Summary 2 Cigars, Cigarillos and Smoking Tobacco Pricing
SMOKELESS TOBACCO AND VAPOUR PRODUCTS
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