Plain packaging on the horizon
Plain packaging legislation for tobacco products was introduced by the New Zealand Government during 2013. The Smoke-Free Environments (Tobacco Products and Packaging) Amendment Bill was introduced by the Associate Health Minister; however, the bill will not pass into law until legal action has been settled in Australia. The law change, if passed, will require cigarettes and tobacco to be sold in standardised packaging with large health warnings. Several interest groups and tobacco companies have launched campaigns opposing such legislation.
Retail display ban in full force
The Smoke-Free Environments (Controls and Enforcement) Amendment Act was passed in 2011, coming into effect in 2012, and prohibiting the retail display of tobacco products. The transition period for retailers expired in July 2013, meaning that it is now illegal to publically display tobacco products in New Zealand. Retailers have not noticed any drop in customer base or sales decrease attributed directly related to the display ban; rather, these are believed to be attributed to excise tax increases. However, the display ban is expected to significantly impact smoking prevalence over the forecast period, with fewer younger New Zealanders exposed to tobacco brands and products on a day-to-day basis.
Excise tax hikes cause tobacco price increases
A drop in retail volume sales can be attributed to a 10% increase in tobacco excise taxes in January 2013. The New Zealand government began a campaign of non-inflation adjustment excise tax increases during April 2010, a strategy which continued to make smoking in New Zealand less affordable for consumers throughout 2013. However, cigarette volume sales decreased more steeply than retail volumes of cigars and cigarillos due to the more luxury status of cigars contributing to positive growth in the category despite increasing unit prices.
Census data indicate sharp drop in smoking prevalence
The 2013 Census results showed that the number of smokers decreased significantly since the 2006 census (the scheduled 2011 census was delayed due to the Christchurch Earthquakes) with smoking prevalence below 15% and on track to meet government targets for 2018 with a view to having a smoke-free New Zealand by 2025 (defined as smoking prevalence below 5%).
Big Four continue to dominate New Zealand tobacco industry
British American Tobacco (New Zealand), Imperial Tobacco New Zealand, Philip Morris (New Zealand) and Scandinavian Tobacco Group dominated tobacco in New Zealand during 2013. British American Tobacco (New Zealand) accounted for the greater share of cigarette sales, continuing to lead the category and lead by its Pall Mall and Holiday brands. Imperial Tobacco New Zealand ranked second in both RYO tobacco and cigarettes, whilst Scandinavian Tobacco Group dominated retail volume sales in cigars and cigarillos, led by its Schimmelpenninck, White Owl and Café Crème brands.
Negative forecast period growth predicted
A decrease in retail volume sales over the forecast period is predicted, with the impact of the retail display ban and the potential implementation of plain packaging regulation expected to severely curtail any potential growth. Government efforts toward education and smoking uptake prevention are expected to further cut smoking prevalence rates, in addition to further planned excise tax increases between 2014 and 2016. This is expected to have a negative impact on demand for tobacco overall in New Zealand throughout the forecast period.
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Discover the latest market trends and uncover sources of future market growth for the Tobacco industry in New Zealand with research from Euromonitor's team of in-country analysts.
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The Tobacco in New Zealand 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 New Zealand?
- What are the major brands in New Zealand?
- Which sector of the tobacco products market is the largest by value sales in New Zealand?
- Which sector of the tobacco products market has been growing the fastest, by volume and value, in New Zealand?
- Which sector is the most heavily taxed in New Zealand?
- Which companies dominate in the total tobacco market in New Zealand in terms of market share?
- What is the distribution channel split for the tobacco products market in New Zealand?
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This industry report originates from Passport, our Tobacco market research database.