Decline in current value sales
Cigarettes in Norway performed poorly in 2012, posting declines in both current value and retail volume terms due to the accumulated effects of the unrelenting anti-smoking campaigns conducted by the Norwegian government over several decades, which have reduced smoking prevalence dramatically. The government has relied on a portfolio of tactics which not only motivate smokers to quit but also prevent consumers from taking up the habit. Some of the most effective tactics adopted by the Norwegian government include high taxation, a ban on smoking in public places and a ban on the visible display of all tobacco products.
Smokeless tobacco provides a beacon of hope
Smokeless tobacco recorded by far the best performance in 2012, underpinned by the popularity of Swedish-style snus, especially among Norwegians between the ages of 16 and 24. While the share of smokers in this age group fell by five percentage points to 20%, the share of users of Swedish-style snus stood at around 29%.
Most Norwegians accept the evidence put forth by the medical authorities that cigarette smoking is likely to ultimately lead to serious health problems. However, many Norwegians still enjoy consuming tobacco and consider Swedish-style snus a relatively healthy alternative to cigarettes. There is considerable debate about the validity of this assumption but new consumers of tobacco are flocking to Swedish-style snus as a more socially acceptable form of tobacco consumption.
Hard to compete behind closed cabinets
Four major multinationals - British American Tobacco Norway AS, Imperial Tobacco Norway AS, Swedish Match Norge AS and Philip Morris Norway AS - are present in Norway. All are struggling to retain share as overall tobacco sales decline, largely as a result of the restrictions in the retail landscape introduced by the Norwegian government. Swedish Match is the only player which is well-positioned in smokeless tobacco. However, fierce competition from Imperial Tobacco is eroding its dominance of Swedish-style snus. British American Tobacco and Philip Morris are struggling more than ever to buoy sales in their poorly performing core business, cigarettes.
Visible display ban removes the last marketing opportunity
The advertising of tobacco products was initially prohibited in 1975. Since then, the Norwegian government has introduced stricter regulations to gradually remove all opportunities for cigarette distributors to promote their products. In 2012, the results of the latest regulation to ban the visible display of tobacco were evident. Cigarette manufacturers have little incentive to innovate or compete on price, with sales determined largely by customer loyalty to longstanding brands.
Dire outlook for tobacco products
Growth in constant value terms is predicted for the Norwegian tobacco industry over the forecast period. However, this growth will be driven only by higher taxation. There is little scope for volume growth, other than in smokeless tobacco as consumers opt for a healthier form of tobacco consumption than cigarettes. Tobacco will thus face a challenging time over the forecast period, particularly following the implementation of the visible display ban in 2010. The smoking population is expected to decline further and smoking will continue to become less socially acceptable, further eroding tobacco sales.
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Discover the latest market trends and uncover sources of future market growth for the Tobacco industry in Norway with research from Euromonitor's team of in-country analysts.
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If you're in the Tobacco industry in Norway, our research will save you time and money while empowering you to make informed, profitable decisions.
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The Tobacco in Norway 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 Norway?
- What are the major brands in Norway?
- Which sector of the tobacco products market is the largest by value sales in Norway?
- Which sector of the tobacco products market has been growing the fastest, by volume and value, in Norway?
- Which sector is the most heavily taxed in Norway?
- Which companies dominate in the total tobacco market in Norway in terms of market share?
- What is the distribution channel split for the tobacco products market in Norway?
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This industry report originates from Passport, our Tobacco market research database.