Smokers in Australia are already well informed of the dangers posed by smoking cigarettes and this combined with rising taxes and increased controls over public smoking have all helped drive an ongoing decline in smoking prevalence. With strict controls over advertising, including at point-of-sale, and with plain packaging in place since 2012 it is hard for manufacturers to attract new smokers, while existing smokers have limited exposure to marketing.
The share of total volume sales of cigarettes accounted for by illicit trade products continued to rise in 2020. The average unit price of cigarettes continued to record double-digit growth in 2020, with it having doubled since the start of the review period.
British American Tobacco (BAT) continued to lead cigarettes in 2020. Among its better performing brands in 2020 included the traditional mid-priced brands such as its Holiday range and Pall Mall.
Over the forecast period there is expected to be a pattern of consumers trading down from premium to mid-priced brands and from mid-priced to economy brands, with ongoing price rises forcing consumers to reassess their purchasing decisions. In line with this, it is expected that manufacturers will focus on launching more economy price band cigarettes.
Industry sources expect that the ban on nicotine e-liquids, except via a prescription, could provide a short-term boost to sales of cigarettes in 2021 and 2022. Many smokers looking to quit have taken to switching to e-vapour products which they perceive to be less harmful and thus an ideal pathway to quitting altogether.
Retail volume sales of cigarettes are expected to continue declining at a rapid pace over the forecast period. More smokers are likely to reassess their habit in light of health concerns and COVID-19, as well as lower disposable incomes.
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Understand the latest market trends and future growth opportunities for the Cigarettes industry in Australia with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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This report originates from Passport, our Cigarettes research and analysis database.
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