Cigarette smoking continues to decline
The smoking ban in public places and strict tobacco legislation made it much harder and more uncomfortable for smokers. The anti-smoking campaigns run by the government, the medical establishment and lobby groups raised awareness of the health risks involved in smoking. These factors continued to have a noticeable effect on volume sales of cigarettes, which declined yet again in 2013. It was the fourth consecutive year of decline for cigarettes, following the introduction of the smoking ban in public places in 2010. Cigars (excluding cigarillos) and pipe tobacco also registered declines in volume sales, due to low consumer demand. These products suffer from an old-fashioned image, and appeal only to mature and traditional consumers. Volume sales of RYO tobacco and cigarillos, however, continued to be buoyant, as they enjoyed popularity amongst younger Swiss smokers.
The responsible smoker
In spite of health warnings and campaigns, die-hard smokers continue to smoke, but choose products that they perceive as less harmful. An example is cigarillos, which are considered more natural than cigarettes due to the tobacco wrapping used, and are assumed to be healthier as the smoke is not inhaled. RYO tobacco is also considered less harmful, and is believed to contain fewer additives than cigarettes. In both cases the price advantages they had over cigarettes have diminished due to tax increases. “Natural” and “additive-free” tobacco products have also registered good performances, which is directly linked to the more conscientious behaviour patterns of smokers. The anti-smoking lobby, however, warns that all tobacco products carry health risks.
The leading international manufacturers dominate the competitive landscape
In 2013 the Swiss subsidiaries of the three leading tobacco multinationals, Philip Morris, British American Tobacco and Japan Tobacco International, dominated cigarettes with a large combined volume share. Although private label brands from grocery retailers and discounters are available in the market, their shares, as well as the shares of small local producers, remain marginal. In cigars and smoking tobacco the bulk of share is also accounted for by leading multinational and European companies. The reason for the consolidation in the market is that only large companies have the capability to withstand the challenges posed by the stringent tobacco regulations.
Distribution is in the hands of mass retailers
Convenience is the crucial factor influencing consumer demand, and therefore the distribution of tobacco products remains in the hands of mass retailers. Within this, discounters is the most successful channel. Although following at a distance, supermarkets has also gained ground. These retailers have large product ranges and low prices, which contribute to their success. Forecourt retailers and newsagents-tobacconists/kiosks also accounts for a large share, although the latter lost share to grocery retailers in the review period. Tobacco specialists has lost its prominent position, but continues to be an important channel in premium cigars. Internet retailing is registering growth, but its share remains marginal due to the competition posed by bricks-and-mortar retailers.
Cigarettes is expected to continue to see a volume decline in the forecast period
Cigarettes is projected to continue to face a decline in volume sales in the next five years. Tobacco legislation, as well as anti-smoking campaigns and health warnings carried out by lobby groups, will further intensify. Cigars (excluding cigarillos) and pipe tobacco will continue to suffer from an old-fashioned image, and therefore will appeal only to a restricted group of smokers. However, the popularity of cigarillos and RYO tobacco is anticipated to maintain healthy growth thanks to demand from younger Swiss smokers.
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Discover the latest market trends and uncover sources of future market growth for the Tobacco industry in Switzerland with research from Euromonitor's team of in-country analysts.
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The Tobacco in Switzerland 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 Switzerland?
- What are the major brands in Switzerland?
- Which sector of the tobacco products market is the largest by value sales in Switzerland?
- Which sector of the tobacco products market has been growing the fastest, by volume and value, in Switzerland?
- Which sector is the most heavily taxed in Switzerland?
- Which companies dominate in the total tobacco market in Switzerland in terms of market share?
- What is the distribution channel split for the tobacco products market in Switzerland?
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This industry report originates from Passport, our Tobacco market research database.