The strong decline in cross-border traffic and home seclusion during the COVID-19 pandemic had a strong positive impact on cigarette sales in 2020, as many cigarette smokers could only purchase cigarettes locally. Due to border closures and restrictions on international travel, such as the need to quarantine and the reduced frequency of international flights, illicit cigarette sales declined from an estimated 13% of overall cigarette volume sales in 2019 to 9% in 2020.
As the COVID-19 crisis also led to increased stress and anxiety and greater social isolation due to home seclusion, there was a noticeable but slight increase in cigarette consumption among regular smokers. According to the Rauchfrei-Telefon (Smoke-free telephone) organisation advising smokers by telephone on how to quit, cigarette consumption was boosted by its more frequent use as an anti-stress substance in 2020.
In 2020, the competitive landscape did not see any significant shifts and remained heavily dominated by two main players, the largest one being Philip Morris followed by the two Austrian subsidiaries of Japan Tobacco International (JTI), Austria Tabak GmbH and JTI Austria GmbH. Austria Tabak GmbH controls local Austrian brands including Memphis and Smart while JTI Austria distributes the group’s global brands Benson & Hedges, Camel and Winston.
The recovery in cigarette sales in 2020 as a result of the COVID-19 crisis is expected to be short-lived and cigarette sales are expected to decline in the forecast period, with increased health awareness among consumers likely to encourage a growing number of smokers to reduce their cigarette consumption or to attempt to quit smoking. Similarly, the prevalence of smoking among teenagers and young adults is predicted to continue its long-term downward trend.
The annual increases in cigarette pack prices will be fuelled by scheduled tobacco tax increases every year in April over the forecast period, with manufacturers typically increasing pack prices by 20 cents annually. This amounts to a yearly 4% rise in the price of cigarettes.
As tobacco manufacturers face a gradual erosion of cigarettes sales, they are expected to streamline their product portfolios to reduce costs, notably by removing niche brands or those which are not an integral part of their global portfolios.
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Understand the latest market trends and future growth opportunities for the Cigarettes industry in Austria 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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