Demand for cigarettes sold through legal channels witnessed further declines in 2020 as the category continued on its negative growth trajectory. While smoking prevalence amongst the adult population is slowly dropping due to various health awareness campaigns, rising taxes which are continuing to drive up the average unit price of cigarettes is resulting in an ongoing shift in consumption amongst lower-income consumers towards illicit trade.
The competitive landscape in cigarettes remained extremely concentrated in 2020, with British American Tobacco strengthening its overall dominance, as its operations were not interrupted during the pandemic. With some consumers either trading down or up with a notable shift away from mid-priced brands, the player’s economy brand Rothmans strengthened its overall leadership and continued to represent a large proportion of its sales.
Distribution of cigarettes was fairly unaffected in terms of the impact of a lockdown and restrictive measures with independent small grocers continuing to dominate the category. However, it lost some share, along with the second largest channel street vendors, to discounters in 2020, as consumers searched for competitive prices.
Retail volume sales of cigarettes in Colombia are predicted to continue on their low declining trajectory over the forecast period, in line with a further reduction in smoking prevalence amongst the adult smoking population. Nevertheless, the polarising trend witnessed at the end of the review period will ensure that the dominant economy band gradually regains lost volume share, while the premium band will continue to gain ground, both at the expense of mid-priced brands as consumers from respective low-income or higher-income brackets find it increasingly difficult to differentiate the benefits of this price band.
Illicit trade will remain a significant concern for tobacco operators, with illicit cigarettes predicted to continue to penetrate the category over the forecast period due to ongoing price hikes. The most affordable cigarettes sold legally will therefore, place them beyond the reach of many financially stretched low-income consumers, with the latter feeling the economic fallout of the pandemic the most.
Sales of leading manufacturers are supported by large product portfolios and high brand awareness. However, the decline in demand for cigarettes is leading these major players to implement diversification strategies in order to retain their shares.
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Understand the latest market trends and future growth opportunities for the Cigarettes industry in Colombia 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 Colombia, our research will help you to make informed, intelligent decisions; to recognise and profit from opportunity, or to offer resilience amidst market uncertainty.
This report originates from Passport, our Cigarettes research and analysis database.
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