The average unit price of cigarettes has been rising year-on-year, with these price increases attributed to the high taxes imposed on tobacco products by the government as well as inflation. As prices rise this is having a negative impact on retail volume sales with consumers being forced to either seek cheaper alternatives to smoking cigarettes or to quit smoking altogether.
Price remains an important factor in the purchasing decision for cigarettes in Kenya and therefore manufacturers are focusing on trying to maintain their production standards while still keeping their prices competitive. This is proving difficult due to the high cost of production and the growing competition from illicit trade cigarettes.
British American Tobacco Kenya Ltd is seeking to expand into new export markets to compensate for the drop in consumption of cigarettes in Kenya. The firm is targeting Djibouti, Madagascar and South Sudan with cigarettes, cut rag tobacco, and tobacco-free oral nicotine pouches under the Lyft brand.
The tobacco industry was among the hardest hit industries by the COVID-19 pandemic in Kenya. This was because consumers were shifting away from activities that would compromise their respiratory health thus making them vulnerable to infection with many seeking alternative options or quitting smoking altogether.
Miraa/khat is a stimulant drug that is widely popular across the East African region with Kenya leading in consumption. People who use Miraa/khat are also seen to be more likely to smoke cigarettes and thus this drug is having a positive impact on sales of cigarettes.
COVID-19 was somewhat of an eye opener for some cigarette smokers in the country since it led to increased awareness of the health risks involved with smoking such as their vulnerability to respiratory infections. This was also supported by the introduction of tobacco regulations during the review period which state that the danger signs of smoking must be printed clearly on the packaging.
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Understand the latest market trends and future growth opportunities for the Cigarettes industry in Kenya with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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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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