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Country Report

South Africa Flag Tobacco in South Africa

| Pages: 65

Price: US$1,900

About this Report

EXECUTIVE SUMMARY

The volume decline in cigarettes continues, aggravated by rising taxation and growing illicit trade

Retail volume sales of cigarettes remained under pressure in 2012, due to the growth in illicit trade. Illicit cigarettes continued to gain a significant market share, with an estimated 8.4 billion sticks smuggled into South Africa in 2012. As a result, volume sales of legal cigarettes declined. In addition, escalating tobacco taxation, coupled with high levels of unemployment, slow income growth, increasing utility bills, rising debt and increases in cigarette unit prices, continued to put pressure on consumers’ disposable incomes. The average unit price of cigarettes increased marginally by 2% in current terms, which resulted in making some price segment of cigarettes more costly when compared to the preceding year; as a result consumers increasingly sought less expensive alternatives, such as illicit cigarettes. Consequently, value sales of cigarettes also declined in tandem with declining retail volume sales, as consumers traded premium brands for mid-priced and economy brands.

Point-of-sale display remains the key marketing medium for tobacco products, as advertising restrictions intensify

The proportion of cigarettes sold under point-of-sale display promotions increased notably over the review period. Players in the South African tobacco market rely on point-of-sale displays to promote products and increase volume sales. Given the restrictions on advertising to consumers through other platforms, point-of-sale display advertising is currently the core marketing and promotional medium for manufacturers of tobacco products in South Africa. As a result, partnerships with retailers and manufacturers are becoming increasingly important to facilitate volume and value growth. As part of these partnerships, players rely on retailers to promote their products at points of sale. Cigarette manufacturers assist these retailers in areas such as new product introductions, product quality, product returns and merchandising. Point-of-sale displays feature posters, banners, glowing sign boards and the colour and logo of cigarette brands to increase awareness. However, advertising and display at points of sale are legally required to be less than 1.5m away from the cash register.

Grocery retailers remains the leading distribution channel for tobacco products

The bulk of sales of tobacco products in South Africa continue to be through grocery retailers such as supermarkets and tobacco specialists, which accounted for the majority of volume share in 2012. The highest share of volume sales of tobacco products was derived from supermarkets in 2012, due to easy access and convenience: this applies predominantly to cigarettes, but not cigars and smoking tobacco – tobacco specialists leads in these categories. In addition, the high volume share of supermarkets can be attributed to these outlets offering relatively lower-priced products when compared with other retail channels, such as tobacco specialists. Despite supermarket popularity the distribution channel for tobacco is diversifying; tobacco products are increasingly being sold through other retail channels, such as kiosks, newsagents, street vendors and spaza shops.

Sales of tobacco are set to continue to decline during the forecast period

South Africa’s tobacco market is mature. Volume sales of cigarettes and cigars are expected to see declining growth rates. Taxation increases and the growth of illicit cigarettes are expected to be the key factors limiting the sustainability of South Africa’s tobacco market. In addition, stringent advertising and marketing restrictions which prohibit the advertising and promotion of tobacco products are expected to affect the marketing strategies of tobacco manufacturers and distributors during the forecast period.

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Overview

Discover the latest market trends and uncover sources of future market growth for the Tobacco industry in South Africa 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 South Africa, 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 South Africa for free:

The Tobacco in South Africa 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 South Africa?
  • What are the major brands in South Africa?
  • Which sector of the tobacco products market is the largest by value sales in South Africa?
  • Which sector of the tobacco products market has been growing the fastest, by volume and value, in South Africa?
  • Which sector is the most heavily taxed in South Africa?
  • Which companies dominate in the total tobacco market in South Africa in terms of market share?
  • What is the distribution channel split for the tobacco products market in South Africa?

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.

Table of Contents

Tobacco in South Africa - Industry Overview

EXECUTIVE SUMMARY

The volume decline in cigarettes continues, aggravated by rising taxation and growing illicit trade

Point-of-sale display remains the key marketing medium for tobacco products, as advertising restrictions intensify

Grocery retailers remains the leading distribution channel for tobacco products

Sales of tobacco are set to continue to decline during the forecast period

OPERATING ENVIRONMENT

Legislation

  • Summary 1 Legislation Summary at a Glance

Country-specific legislation

Minimum legal smoking age

Smoking prevalence

Tar levels

Health warnings

Advertising and sponsorship

Point-of-sale display bans

Smoking in public places

Low ignition propensity (LIP) regulation

“Reduced harm”

Electronic cigarettes

Litigation

Death by cause

  • Table 1 Death by Cause 2008-2012

TAXATION AND PRICING

Duty paid packet marks

Taxation rates

  • Table 2 Taxation and Duty Levies 2007-2012

Average cigarette pack price breakdown

  • Table 3 Average Cigarette Pack Price Breakdown: Brand Examples

PRODUCTION/IMPORTS/EXPORTS

  • Table 4 Trade Statistics – Tobacco Leaf 2007-2012

Illicit trade in cigarettes

MARKET INDICATORS

  • Table 5 Illicit Trade Estimate of Cigarettes: Volume 2007-2012

MARKET DATA

  • Table 6 Sales of Tobacco by Category: Volume 2007-2012
  • Table 7 Sales of Tobacco by Category: Value 2007-2012
  • Table 8 Sales of Tobacco by Category: % Volume Growth 2007-2012
  • Table 9 Sales of Tobacco by Category: % Value Growth 2007-2012
  • Table 10 Forecast Sales of Tobacco by Category: Volume 2012-2017
  • Table 11 Forecast Sales of Tobacco by Category: Value 2012-2017
  • Table 12 Forecast Sales of Tobacco by Category: % Volume Growth 2012-2017
  • Table 13 Forecast Sales of Tobacco by Category: % Value Growth 2012-2017

DEFINITIONS

SOURCES

  • Summary 2 Research Sources

Tobacco in South Africa - Company Profiles

British American Tobacco (South Africa) Ltd in Tobacco (South Africa)

STRATEGIC DIRECTION

KEY FACTS

  • Summary 3 British American Tobacco (South Africa) Ltd: Key Facts

COMPANY BACKGROUND

PRODUCTION

COMPETITIVE POSITIONING

  • Summary 4 British American Tobacco (South Africa) Ltd: Competitive Position 2012

JT International South Africa (Pty) Ltd in Tobacco (South Africa)

STRATEGIC DIRECTION

KEY FACTS

  • Summary 5 JT International South Africa (Pty) Ltd: Key Facts
  • Summary 6 JT International South Africa (Pty) Ltd: Key Facts: Operational Indicators

COMPANY BACKGROUND

PRODUCTION

COMPETITIVE POSITIONING

  • Summary 7 JT International South Africa (Pty) Ltd: Competitive Position 2012

Philip Morris South Africa (Pty) Ltd in Tobacco (South Africa)

STRATEGIC DIRECTION

KEY FACTS

  • Summary 8 Philip Morris South Africa (Pty) Ltd: Key Facts
  • Summary 9 Philip Morris South Africa (Pty) Ltd: Key Facts: Operational Indicators

COMPANY BACKGROUND

PRODUCTION

COMPETITIVE POSITIONING

  • Summary 10 Philip Morris South Africa (Pty) Ltd: Competitive Position 2012

Cigarettes in South Africa - Category Analysis

HEADLINES

TRENDS

COMPETITIVE LANDSCAPE

NEW PRODUCT DEVELOPMENTS

  • Summary 11 Cigarettes - New Product Launches

DISTRIBUTION

PROSPECTS

CATEGORY BACKGROUND

Cigarettes: price bands

  • Summary 12 Cigarette Price Band Definitions

Cigarettes: menthol/standard

Cigarettes: filter/non-filter

Cigarettes: carbon/standard filter

Cigarettes: filter length

Cigarettes: regular vs. slims vs. superslims

Cigarettes: pack size

Cigarettes: pack type

CATEGORY DATA

  • Table 14 Sales of Cigarettes by Tar Level: Volume 2007-2012
  • Table 15 Sales of Cigarettes by Tar Level: Value 2007-2012
  • Table 16 Sales of Cigarettes by Tar Level: % Volume Growth 2007-2012
  • Table 17 Sales of Cigarettes by Tar Level: % Value Growth 2007-2012
  • Table 18 Sales of Cigarettes by Price Band: % Volume Breakdown 2007-2012
  • Table 19 Sales of Cigarettes by Standard/Menthol: % Volume Breakdown 2007-2012
  • Table 20 Sales of Cigarettes by Tobacco Type: % Volume Breakdown 2007-2012
  • Table 21 Sales of Cigarettes by Filter Vs Non-filter: % Volume Breakdown 2007-2012
  • Table 22 Sales of Filter Cigarettes by Carbon Vs Non-carbon: % Volume Breakdown 2007-2012
  • Table 23 Sales of Cigarettes by Length: % Volume Breakdown 2007-2012
  • Table 24 Sales of Cigarettes by Regular/Slim/Superslim: % Volume Breakdown 2007-2012
  • Table 25 Sales of Cigarettes by Pack Size: % Volume Breakdown 2007-2012
  • Table 26 Sales of Cigarettes by Pack Type: % Volume Breakdown 2007-2012
  • Table 27 NBO Company Shares of Cigarettes: % Volume 2008-2012
  • Table 28 Cigarettes Brand Shares 2009-2012
  • Table 29 Sales of Cigarettes by Distribution Format: % Analysis 2007-2012
  • Table 30 Cigarettes: Production, Imports and Exports: Total Volume 2007-2012
  • Table 31 Forecast Sales of Cigarettes by Tar Level: Volume 2012-2017
  • Table 32 Forecast Sales of Cigarettes by Tar Level: Value 2012-2017
  • Table 33 Forecast Sales of Cigarettes by Tar Level: % Volume Growth 2012-2017
  • Table 34 Forecast Sales of Cigarettes by Tar Level: % Value Growth 2012-2017
  • Table 35 Forecast Sales of Cigarettes by Price Band: % Volume Breakdown 2012-2017
  • Table 36 Forecast Sales of Cigarettes by Standard/Menthol: % Volume Breakdown 2012-2017
  • Table 37 Forecast Sales of Cigarettes by Tobacco Type: % Volume Breakdown 2012-2017
  • Table 38 Forecast Sales of Cigarettes by Filter Vs Non-filter: % Volume Breakdown 2012-2017
  • Table 39 Forecast Sales of Filter Cigarettes by Carbon Vs Non-carbon: % Volume Breakdown 2012-2017
  • Table 40 Forecast Sales of Cigarettes by Length: % Volume Breakdown 2012-2017
  • Table 41 Forecast Sales of Cigarettes by Regular/Slim/Superslim: % Volume Breakdown 2012-2017
  • Table 42 Forecast Sales of Cigarettes by Pack Size: % Volume Breakdown 2012-2017
  • Table 43 Forecast Sales of Cigarettes by Pack Type: % Volume Breakdown 2012-2017

Cigars in South Africa - Category Analysis

HEADLINES

TRENDS

HAND-MADE VS MACHINE MANUFACTURED SPLITS

COMPETITIVE LANDSCAPE

NEW PRODUCT DEVELOPMENTS

DISTRIBUTION

PROSPECTS

CATEGORY DATA

  • Table 44 Sales of Cigars by Category: Volume 2007-2012
  • Table 45 Sales of Cigars by Category: Value 2007-2012
  • Table 46 Sales of Cigars by Category: % Volume Growth 2007-2012
  • Table 47 Sales of Cigars by Category: % Value Growth 2007-2012
  • Table 48 Sales of Cigars by Handmade vs Machine-manufactured: % Volume Breakdown 2007-2012
  • Table 49 Sales of Cigars by Handmade vs Machine-manufactured: % Value Breakdown 2007-2012
  • Table 50 NBO Company Shares of Cigars Excluding Cigarillos: % Volume 2008-2012
  • Table 51 LBN Brand Shares of Cigars Excluding Cigarillos: % Volume 2009-2012
  • Table 52 NBO Company Shares of Cigarillos: % Volume 2008-2012
  • Table 53 LBN Brand Shares of Cigarillos: % Volume 2009-2012
  • Table 54 Distribution of Cigars by Format: % Volume 2007-2012
  • Table 55 Forecast Sales of Cigars by Category: Volume 2012-2017
  • Table 56 Forecast Sales of Cigars by Category: Value 2012-2017
  • Table 57 Forecast Sales of Cigars by Category: % Volume Growth 2012-2017
  • Table 58 Forecast Sales of Cigars by Category: % Value Growth 2012-2017

Smokeless Tobacco in South Africa - Category Analysis

HEADLINES

TRENDS

DISTRIBUTION

COMPETITIVE LANDSCAPE

NEW PRODUCT DEVELOPMENTS

PROSPECTS

CATEGORY DATA

  • Table 59 Sales of Smokeless Tobacco by Category: Volume 2007-2012
  • Table 60 Sales of Smokeless Tobacco by Category: Value 2007-2012
  • Table 61 Sales of Smokeless Tobacco by Category: % Volume Growth 2007-2012
  • Table 62 Sales of Smokeless Tobacco by Category: % Value Growth 2007-2012
  • Table 63 NBO Company Shares of Smokeless Tobacco: % Volume 2008-2012
  • Table 64 LBN Brand Shares of Smokeless Tobacco: % Volume 2009-2012
  • Table 65 Distribution of Smokless Tobacco by Format: % Volume 2007-2012
  • Table 66 Forecast Sales of Smokeless Tobacco by Category: Volume 2012-2017
  • Table 67 Forecast Sales of Smokeless Tobacco by Category: Value 2012-2017
  • Table 68 Forecast Sales of Smokeless Tobacco by Category: % Volume Growth 2012-2017
  • Table 69 Forecast Sales of Smokeless Tobacco by Category: % Value Growth 2012-2017

Smoking Tobacco in South Africa - Category Analysis

HEADLINES

TRENDS

The role and effect of cannabis/marijuana

DISTRIBUTION

COMPETITIVE LANDSCAPE

NEW PRODUCT DEVELOPMENTS

PROSPECTS

CATEGORY DATA

  • Table 70 Sales of Smoking Tobacco by Category: Volume 2007-2012
  • Table 71 Sales of Smoking Tobacco by Category: Value 2007-2012
  • Table 72 Sales of Smoking Tobacco by Category: % Volume Growth 2007-2012
  • Table 73 Sales of Smoking Tobacco by Category: % Value Growth 2007-2012
  • Table 74 NBO Company Shares of RYO Tobacco: % Volume 2008-2012
  • Table 75 LBN Brand Shares of RYO Tobacco: % Volume 2009-2012
  • Table 76 NBO Company Shares of Pipe Tobacco: % Volume 2008-2012
  • Table 77 LBN Brand Shares of Pipe Tobacco: % Volume 2009-2012
  • Table 78 Distribution of Smoking Tobacco by Format: % Volume 2007-2012
  • Table 79 Forecast Sales of Smoking Tobacco by Category: Volume 2012-2017
  • Table 80 Forecast Sales of Smoking Tobacco by Category: Value 2012-2017
  • Table 81 Forecast Sales of Smoking Tobacco by Category: % Volume Growth 2012-2017
  • Table 82 Forecast Sales of Smoking Tobacco by Category: % Value Growth 2012-2017

Segmentation

This market research report includes the following:

  • Tobacco
    • Cigarettes
      • High Tar Cigarettes
      • Mid Tar Cigarettes
      • Low Tar Cigarettes
      • Ultra Low Tar Cigarettes
    • Cigars
      • Cigars Excluding Cigarillos
        • Large Cigars
        • Standard Cigars
        • Small Cigars
      • Cigarillos
    • Smoking Tobacco
      • RYO Tobacco
      • Pipe Tobacco
    • Smokeless Tobacco
      • Chewing Tobacco
        • Asian-Style Chewing Tobacco
        • US-Style Chewing Tobacco
        • Other Chewing Tobacco
      • Snuff
        • Moist Snuff
          • US-Style Moist Snuff ('Dip')
            • Loose US-Style Moist Snuff
            • Portion US-Style Moist Snuff
          • Swedish-Style Snus
            • Loose Swedish-Style Snus
            • Portion Swedish-Style Snus
          • Asian Style Creamy Snuff
        • Dry Snuff
        • Hard Snuff
    • Cigarettes Including RYO Stick Equivalent
      • High Tar Cigarettes
      • Mid Tar Cigarettes
      • Low Tar Cigarettes
      • Ultra Low Tar Cigarettes
      • RYO Cigarettes

Statistics Included

For each category and subcategory you will receive the following data in Excel format:

From Passport

  • Market Sizes
  • Company Shares
  • Brand Shares
  • Distribution
  • Pricing
  • Analysis by Type
  • Cigarettes by Blend
  • Cigarettes by Carbon Filter/Non-Carbon Filter
  • Cigarettes by Filtered/Unfiltered
  • Cigarettes by Length
  • Cigarettes by Pack Size
  • Cigarettes by Pack Type
  • Cigarettes by Price Band
  • Cigarettes by Regular/Slim/Superslim
  • Cigarettes by Standard/Menthol
  • Illicit Trade Penetration
  • Products by Ingredient
  • Smoking population - number of adult smokers
  • Smoking prevalence - % of adult population
  • Trade Statistics - Volume

Market size details:

  • Retail volume
  • Retail volume % growth
  • Retail volume per capita
  • Retail value retail selling price % growth
  • Retail value retail selling price local currency, USD, EUR, GBP, CHF, JPY
  • Retail value retail selling price per capita local currency, USD, EUR, GBP, CHF, JPY
  • Illicit trade volume
  • Illicit trade volume % growth
  • Illicit trade volume per capita
  • Retail volume (sticks)
  • Retail volume (sticks) % growth
  • Retail volume (sticks) per capita
  • Retail plus illicit trade
  • Retail plus illicit trade % growth
  • Retail plus illicit trade per capita

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