Tobacco in Latin America was recording positive value growth in 2022, driven by the still dominant cigarettes category, but with e-vapour and heated tobacco products recording more dynamic growth. However, the development of these next-generation products, while benefiting from the strong growth expected in the markets where they are on legal sale, will continue to be stymied at a regional level by their bans in Argentina, Brazil and Mexico, Latin America’s three biggest tobacco markets.
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This report comes in PPT.
The difficult economic climate, with the pandemic having impacted some consumers’ disposable incomes and the recent high inflation interest rates, have seen smokers increasingly turning to illicit trade for their cigarettes, with a resultant negative impact on legal sales. In some cases, this has seen players concentrating on their premium brands, as the usual buyers of economy products are those most likely to switch to buying illicit cigarettes.
The authorities in Argentina, Brazil and Mexico have banned the distribution and sale of next-generation tobacco products like e-vaping or heated tobacco. While there are unauthorised sales of these products, often via e-commerce, but also through bricks-and-mortar outlets in some cases, the governments in these countries were showing no likelihood of lifting their official bans in the immediate future.
Next-generation tobacco products, mainly e-vapour products, but also, increasingly, heated tobacco, have been seeing strong growth in a number of Latin American countries. The latter has mainly been making headway in Colombia and Central America, predominantly through Iqos/HEETS, although PMI is also now looking to target lower-income consumers in Colombia (Bonds by Iqos) and Guatemala (lil SOLID) with cheaper variants.
From January 2023, new legislation came into effect in Mexico, expanding areas where smoking is prohibited to any workplace, spaces of collective gatherings, all public transportation and all educational establishments. It also prohibited all forms of tobacco advertising, promotion and sponsorship through any means of communication and dissemination, including the direct and indirect display of tobacco products at points of sale.
Passport Tobacco covers the seven major tobacco categories: Cigarettes, Cigars & Cigarillos, Smoking tobacco (made up of Pipe tobacco and RYO tobacco), Smokeless Tobacco (snuff and chewing tobacco), E-Vapour Products (closed and open); Heated Tobacco; and Tobacco Free Oral Nicotine. Smoking paraphernalia such as pipes, rolling papers, lighters or matches, etc., are not included, nor are nicotine replacement therapy (NRT) products, which are part of Euromonitor's Passport Consumer Healthcare database.
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