As COVID-19 effects took hold of Brazil for much of 2020 and 2021, a migration towards legally traded brands and companies took place, resulting in significant declines for illicit cigarettes and positive retail volume growth for the category. This came after years of growth for illegal cigarettes and has helped companies to gain momentum and revenue during significant economic downturns.
Nevertheless, in a high inflation scenario as evident in 2021, pricing issues become more prominent. Consumers with lower disposable incomes are more likely to be rational with their expenditure for indulgence purposes, possibly favouring certain products and prices over others.
In a high inflation scenario, demand for illicit cigarettes is unsurprising, with illegal trade often appealing to lower- income consumers. However, it is important to understand that the inflation effects are likely to impact mid-income Brazilians more, as they are more likely to change their consumption behaviour, as high-income families tend to remain more resilient and lower-income families are already accustomed to the situation.
The forecast scenario for 2022 to 2023 in Brazil will remain one of high inflation and the topic is likely to dominate the minds of many local consumers, forcing them to make more rational purchases, and possibly creating new and lasting behaviour. The scenario will continue to offer an opportunity for economy brands such as Rothmans and Chesterfield.
Since 2015, one of the main concerns of cigarette producers has been the level of taxation on the category, which consistently increases costs and final prices, allowing for illegal brands to be more competitive and gain space. After the severity of the pandemic’s impact on public expenditure, the government resumed discussions about increasing taxation on tobacco, alcoholic drinks and added-sugar products, as part of a reformulation of the Brazilian tax system.
The increasing consumption of alcoholic drinks during 2020 and 2021 for indulgence reasons showed that Brazilians are willing to spend on certain products, and this trend is likely to continue despite predictions for the macroeconomic scenario to deteriorate. It is also set to lead to more frequent socialising, which would positively impact cigarettes as well in the near future.
Delivery:
Files are delivered directly into your account soon after payment is received and any tax is certification is verified (where applicable).
Understand the latest market trends and future growth opportunities for the Cigarettes industry in Brazil with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
Key trends are clearly and succinctly summarised alongside the most current research data available. Understand and assess competitive threats and plan corporate strategy with our qualitative analysis, insight and confident growth projections.
If you're in the Cigarettes industry in Brazil, our research will help you to make informed, intelligent decisions; to recognise and profit from opportunity, or to offer resilience amidst market uncertainty.
Cigarettes
RETAIL SALES OF DUTY PAID CIGARETTES The definition of cigarettes for the purposes of this study is duty-paid, machine manufactured white-stick products. This does not exclude brands of cigarettes that do not use white paper but it is designed to exclude the volume of non-machine manufactured products such as bidis/beedis (India) and papirosy (Russia), and other smoking products made with tobacco but that either do not resemble cigarettes as recognised in the US or Europe, or those that are not machine manufactured. The exclusion of these products is intended to give a more accurate picture of the "true" market for cigarettes and cigars which has been distorted in official statistics and published reports because of the inclusion of hybrid products. NB Please note that due to its central importance and integration into the industry mainstream, Indonesia’s market data does include hand-rolled kreteks DUTY-FREE sales are excluded from retail sales, as are herbal cigarettes. ILLICIT TRADE CIGARETTES Not included in retail sales, but split out separately in volume terms only. Defined as non-duty paid cigarettes (includes smuggled & counterfeit/fake products combined). Legitimate cross-border sales are considered duty-paid. Sales arising from a foreign national purchasing cheaper cigarettes in bulk in a neighbouring country for personal use and exported back are attributed to the country where the purchase is made (e.g. bulk cigarette sales by British nationals in France are attributed to France).
See All of Our DefinitionsThis report originates from Passport, our Cigarettes research and analysis database.
If you purchase a report that is updated in the next 60 days, we will send you the new edition and data extract FREE! Home Page