Tobacco prices on the rise as excise taxes increase
Retail volume sales of cigarettes declined during 2012 as a result of the excise taxes on cigarettes increasing by an average of 10% during January 2012. Despite higher average unit prices, retail volume sales of cigars and cigarillos also increased during 2012 as the luxury status of cigars resulted in positive growth in the category. 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 2012. Consequently, the number of smokers in New Zealand decreased in 2012 as unit prices surged.
Retail display ban in full force amidst further talks of plain tobacco packaging
The Smoke-free Environments (Controls and Enforcement) Amendment Act was passed in July 2011 by the New Zealand Parliament and came into force in July 2012. The amendments in the Act prevent wholesalers and retailers from displaying tobacco products within retail outlets. These changes apply to all types of retail outlets including internet retailing, vending, restaurants and bars, affecting outlets which sell only tobacco products and general retail outlets which sell tobacco among a variety of products equally. Under the Act, consumers may be provided with tobacco product details in printed, written or spoken words only. During early 2013, the New Zealand government also announced plans to introduce plain packaging legislation following Australia’s lead.
Sales of cigarettes controlled by grocery retailers, while tobacco specialists dominate sales of cigars
During 2012, grocery retailers accounted for the majority of cigarette volume sales in New Zealand. Small grocery retailers such as convenience stores, independent small grocers and forecourt retailers remained dominant. However, supermarkets, tobacco specialist retailers and newsagent-tobacconists/kiosks were also important distribution channels for cigarettes during 2012. Conversely, tobacco specialist retailers accounted for a large proportion of retail volume sales for cigars during 2012, while convenience stores ranked second with a much lower volume share.
The New Zealand tobacco industry remains dominated by four major players
British American Tobacco (New Zealand) Ltd, Imperial Tobacco New Zealand Ltd, Philip Morris (New Zealand) Ltd and Scandinavian Tobacco Group A/S dominated tobacco in New Zealand during 2012. Within cigarettes, British American Tobacco (New Zealand) Ltd was the leading player, accounting for the majority share of retail volume sales. The company owns the popular Pall Mall and Holiday brands in New Zealand. Imperial Tobacco New Zealand Ltd was the second ranked player in cigarettes and RYO tobacco in 2012. Scandinavian Tobacco Group A/S held the top position in cigars and cigarillos, accounting for half of the retail volume sales. The newly-merged entity divested the popular Willem II brand in 2010, although it retained the Schimmelpenninck, White Owl and Café Crème brands.
Negative volume growth expected in tobacco over the forecast period
Retail volume sales of cigarettes are expected to decline in New Zealand over the forecast period. This trend is expected to develop due mainly to the retail display ban which came into force during July 2012 as well as ongoing public health and anti-smoking campaigns, which are expected to remain prevalent throughout the forecast period. Furthermore, the New Zealand government recently announced the continuation of its campaign of tobacco excise tax increases, with further increases planned between 2013 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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- Gain competitive intelligence about market leaders
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This industry report originates from Passport, our Tobacco market research database.