Due to the outbreak of COVID-19 in 2020, retail volume sales fell, recording a 5% decline compared to only 1% the previous year. In response to the pandemic, the government put restrictions in place to avert the spread of the virus.
COVID-19 partnered with ongoing health concerns in 2020 to lead to lower consumption of cigarettes throughout the year. Growing health awareness was already impacting sales of tobacco in Kenya, with the outbreak of COVID-19, a respiratory issue, further heightening consumers concerns and reducing smoking prevalence.
One of the impacts of the pandemic in Kenya was the change in consumers spending habits. With some consumers out of work and others working from home, reduced incomes were seen due to pay cuts and job losses, while others had a tighter focus on their budgets due to growing financial uncertainty.
It will continue to be a challenging year for cigarette sales in 2021, with the outbreak of COVID-19 continuing to impact movements, with restrictions remaining in place. Therefore, it will not be until restrictions are eased that there will be a recovery in sales of cigarettes linked to social smoking and reduced financial concerns.
Due to growing price sensitivity in the country, sales through illicit trade will continue to grow, despite government efforts to contain it. This will impact volume sales across the coming years, contributing to the decline in growth.
In Kenya, there are only two key players in the tobacco industry, British American Tobacco (BAT) and Mastermind Tobacco. BAT has remained the biggest player across the review period, but over the coming years, it is set to face tough competition from Mastermind Tobacco - especially when it comes to the sale of its economy brands such as Rocket.
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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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