The Coronavirus (COVID-19) pandemic had a significant impact on cigarettes in Canada. In 2020, retail volume sales of cigarettes saw growth for the first time since 2012.
In light of the pandemic, British American Tobacco, the GBO of the leading NBO, Imperial Tobacco Canada, introduced remote working and a travel ban for employees, as well as tighter controls over the use of cash, in line with the strategies of most corporations globally. The company also reported disruptions to domestic production and postponements of new product launches in 2020.
Smoke shops, cigar clubs/houses and tobacco product manufacturers and distributors were not deemed essential in provinces like Ontario, contrary to liquor and cannabis-based businesses. Convenience stores and forecourt retailers were generally allowed to remain open, while foodservice establishments were restricted to delivery orders or takeaways, which limited bar-tobacconists.
The pandemic heightened awareness of health and wellness, particularly around respiratory illnesses and disease, in Canada. This, alongside rising prices, is expected to lead to further drops in smoking prevalence, including a return to the steady drop in the number of adult male smokers, and total adult smokers, following a slight incline over 2020.
Canada’s Plain Packaging Regulation came into effect on 7 February 2020. The regulation stipulates that all cigarettes sold by convenience stores must be presented in plain, dull and brown packs for regular and king size cigarettes (slide & shell & flip top to start with and slide & shell in 2021).
Major branded players are likely to invest in diversifying their portfolios by further expanding into new categories, such as “reduced-risk” products, nicotine pouches, heated tobacco products and/or cannabis products. In this way, major players like British American Tobacco are likely to push for higher profit margins and help to change consumer preferences.
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This report originates from Passport, our Cigarettes research and analysis database.
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