Current value sales of cigarettes reached their highest annual growth rate in 2020 in the last decade in Ireland, mainly fuelled by sales of legitimate cigarettes through mainstream retail channels. The travel restrictions enforced in Ireland throughout the year prevented Irish consumers from easily accessing cheap cigarettes from abroad.
In order to circumvent the menthol ban that officially came into effect in May 2020 in Ireland, the larger tobacco companies such as Gallaher (Japan Tobacco) and Player (Philip Morris) relaunched popular menthol cigarette products with lower menthol additives, with these marketed as “green” versions. Gallaher’s new Silk Cut Choice green has a small proportion of menthol added to the products, but the cigarette itself does not smell or taste of menthol.
Further tax increases are planned for the purchase of cigarettes through traditional retail streams in Ireland by Finance Minister Paschal Donohoe. Under the change made for the 2021 Budget, a pack of 20 cigarettes would cost EUR14 in the mid-price range, with almost EUR11 accounted for by tax.
As the travel ban is expected to ease in line with the wider lockdown roadmap, Irish consumers may be able to travel to the EU to purchase cheaper cigarettes as early as mid-2021. Legitimate cigarette sales through domestic retail channels are in danger of declining even further in the forecast period with the introduction of duty-free for Irish consumers travelling through airports in the UK.
Sales of economy cigarettes are expected to rise in the first two years of the review period, in line with a declining share of mid-price and premium cigarettes. The key components of the economy that affect legitimate cigarette sales, such as employment levels, travel and disposable income, are expected to negatively impact households in the short-term as Ireland transitions out of living with COVID-19.
As part of the budget provisions for 2021, the Finance Minister proposed to increase the tax on a pack of 20 cigarettes. However, the Irish Heart Foundation continues to lobby for further price increases, phased in incrementally over the next five years.
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Understand the latest market trends and future growth opportunities for the Cigarettes industry in Ireland 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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