Pipe tobacco drives industry growth despite obstacles
Despite legislation in October 2012 aimed at protecting public health and banning the serving of shisha or water pipe tobacco in cafés and restaurants, the category continued to perform well in 2013 and was one of the major drivers of the Saudi tobacco industry. This can be attributed to an increase in sales of water pipe tobacco and accessories from speciality tobacco retailers for home use. As part of efforts towards evading the ban, new businesses such as "Shisha-to-Go" have been springing up, allowing water pipe tobacco and accessories to be ordered and delivered to a specified location for private use among a group of family or friends. Such businesses have been growing in popularity as an alternative to the banned cafés and restaurants and have been a major contributor to the growth of the water pipe tobacco industry in the country. Therefore, water pipe tobacco or shisha, which is an inherent part of Arab culture and a popular pastime in Saudi Arabia, remained the largest single category within tobacco in retail volume terms.
Retail groups lead sales after supermarkets adopt a no tobacco policy
Since 2010, the country’s major supermarkets, such as Danube, Panda, Al Raya and Carrefour, have adopted strict policies against selling tobacco, resulting in the removal of these sections from their stores. Thus, mini-markets and privately-run stalls inside shopping malls became the biggest distribution channel for tobacco towards the end of the review period. Large retail groups such as Yousuf MA Naghi & Sons' Cigalah Group, which deals mainly with brands from Japan Tobacco International (JTI), and Al-Babtain Group, which supplies Marlboro and other Philip Morris brands to the Saudi market, are the primary operators of these stalls.
Saudi tobacco legislation ineffective
Since the beginning of the review period the Saudi government has been trying to crack down on tobacco usage, mainly by launching anti-smoking campaigns targeting the public and the country’s youths. This has taken the form of a ban on the sale of cigarettes and other tobacco products in the holy cities of Makkah and Madinah, as well as a ban on selling tobacco to those under the minimum age of 18 and a ban on smoking in public places, including government offices, airports, supermarkets and shopping malls. Nonetheless, the majority of this legislation has proven ineffective due to the illegal trafficking and sale of tobacco by street vendors in the holy cities, a lack of enforcement of the age requirement on the sale of cigarettes to minors and a lack of retaliation on smokers in public places. These factors have been responsible for ongoing sales growth of tobacco, which is expected to continue over the forecast period.
Multinationals continue to lead cigarettes and cigars
Continuing the historic trend, multinationals remained the dominant players in both cigarettes and cigars in 2013, while pipe tobacco was led by regional players, mainly Al Nakhla Tobacco Co SAE. Philip Morris International and British American Tobacco were the leading companies in cigarettes, while Villiger Söhne AG dominated the cigar category in 2013 in volume terms.
Strong growth expected over the forecast period
Tobacco in Saudi Arabia is expected to see strong growth over the forecast period despite stricter legislation from the government. Rising smoking prevalence among a large young population and increased company activities will contribute to growth. Cigars is expected to register the strongest growth due to its small base, followed by pipe tobacco and cigarettes.
Samples (FAQs about samples):
Sample Tobacco Market Research Report
Sample Tobacco Data
Delivery: Files are delivered directly into your account within a few minutes of purchase.
Discover the latest market trends and uncover sources of future market growth for the Tobacco industry in Saudi Arabia with research from Euromonitor's team of in-country analysts.
Find hidden opportunities in the most current research data available, understand competitive threats with our detailed market analysis, and plan your corporate strategy with our expert qualitative analysis and growth projections.
If you're in the Tobacco industry in Saudi Arabia, our research will save you time and money while empowering you to make informed, profitable decisions.
When you purchase this report, you also get the data and the content from these category reports in Saudi Arabia for free:
The Tobacco in Saudi Arabia 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 Saudi Arabia?
- What are the major brands in Saudi Arabia?
- Which sector of the tobacco products market is the largest by value sales in Saudi Arabia?
- Which sector of the tobacco products market has been growing the fastest, by volume and value, in Saudi Arabia?
- Which sector is the most heavily taxed in Saudi Arabia?
- Which companies dominate in the total tobacco market in Saudi Arabia in terms of market share?
- What is the distribution channel split for the tobacco products market in Saudi Arabia?
Why buy this report?
- Gain competitive intelligence about market leaders
- Track key industry trends, opportunities and threats
- Inform your marketing, brand, strategy and market development, sales and supply functions
This industry report originates from Passport, our Tobacco market research database.