An ominous milestone in 2021 was the closure of the Phillip Morris-owned Tabacalera Nacional Andina (TANASA) factory, which had a monopoly on legal cigarettes sales in Ecuador and had been operating in the country for almost 50 years. However, with the illicit trade significantly surpassing licit volume sales and continuing to increase, Phillip Morris decided to shut the factory and import its brands into Ecuador instead.
Cigarette smuggling was at an all-time high in Ecuador in 2021, with contraband accounting for about two-thirds of volume sales. The borders are very permeable, which allows the easy access of cigarettes from neighbouring countries.
The two best-selling brands continued to be Lark and Lider form Phillip Morris. As these brands until 2021 were manufactured only in Ecuador, there was no contraband available.
In April 2021, a regulation was passed transferring the responsibility and costs of traceability of the production and importation of tobacco to producers and importers. The resolution also permits companies to hire a private company to perform this service.
Ecuador was significantly negatively impacted by the pandemic and if the economy struggles to recover and consumer purchasing power is reduced, then consumers will continue to be drawn to illicit cigarettes. In addition, if unemployment is high, many unemployed will resort to selling illicit cigarettes.
The ongoing migrating e-vapour products will continue over the next five years. The outbreak of COVID-19 will have acted as added motivation for some smokers, in addition to cigarette regulations, pre-existing information surrounding health concerns, and the high price points of cigarettes.
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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 Definitions
This report originates from Passport, our Cigarettes research and analysis database.
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