Strong volume and value growth despite public smoking ban
All tobacco categories continued to show impressive growth despite the public smoking ban enacted in August 2012 among other legislative obstacles. The young population, peer pressure as well as innovative products by leading companies contributed to this growth. Pipe tobacco or shisha, which is an inherent part of Arab culture, remained the largest category within tobacco in 2012 in volume terms. Shisha was included in the ban on smoking in cafés but many flouted the new regulations while others switched to smoking more at home.
Saudi government enacts mandatory graphic warnings
In addition to the smoking ban in public places, the government made graphic and verbal warnings that occupy 50% of the packaging mandatory for cigarettes in 2012. Much like the ban on public smoking, this had no effect on the number of smokers and did not slow the growth rates of sales of tobacco products.
Multinationals lead tobacco sales
Multinationals remained dominant in cigarettes and cigars whilst pipe tobacco was led by regional players. The local production of tobacco and tobacco products is prohibited in Saudi Arabia. Philip Morris International and Villiger Söhne were the leading companies in cigarettes and cigars respectively, whilst Nakhla Tobacco, which was acquired by Japan Tobacco Inc in 2013, dominated the pipe tobacco category in 2012 in volume terms.
Supermarkets remain dominant in 2012
The biggest distribution channel for tobacco in 2012, supermarkets, lost some share to tobacco specialists as the latter continued to grow in number and have knowledgeable staff who can advise customers on the technical aspects of products. This was especially effective in cigars, which is a rapidly growing category, as new consumers seek outlets with expert advice. Also, tobacco specialists keep introducing new products and are keeping customers engaged. Furthermore, the leading retailers of the country, like Panda, Danube and Carrefour, have adopted the policy of not selling tobacco, thus helping tobacco specialists.
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. A large young population with a high smoking prevalence will increase the number of smokers in the country although the overall smoking prevalence is expected to drop off slightly over the forecast period. Cigars are expected to show the highest growth as they will grow from a small base, followed by pipe tobacco and cigarettes. Within cigarettes, low and ultra low tar cigarettes are expected to perform the best as consumers will look for less harmful products due to rising health awareness.
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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.
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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?
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This industry report originates from Passport, our Tobacco market research database.