Rising cigarette prices were recently bolstered by the government increasing the Internal Tax of Consumption. Japan Tobacco Inc was the only company to absorb the price difference, with competitors such as Philip Morris International Inc, British American Tobacco Plc, and Imperial Brands Plc, adding this increase directly to retail prices in order to maintain margins – a strategy that was not appreciated by consumers.
Although the market for tobacco products sees continued growth, many consumers, mainly adult men aged 40-50, are reviewing their tobacco consumption and adopting more healthy lifestyles. Awareness of the risks associated with tobacco consumption is rising, resulting in some consumers reducing their daily consumption of cigarettes, and others considering giving up altogether.
The availability of cigarettes is not limited to newsagents-tobacconists and they can be purchased from other retail channels, such as hypermarkets, forecourt retailers, street vendors and even online. Grocery retailers still represents the main channel for cigarette purchases, however.
Société Marocaines des Tabacs dominates the cigarettes category and is the only domestic producer. The company benefits from strong expertise and awareness in the tobacco industry due to its unique position in the past, holding a monopoly in the category in Morocco.
Companies are focusing new product development on developing premium products despite consumers’ price sensitivity. For example, Philip Morris Inc developed Marlboro Purple Mix and Société Marocaines des Tabacs developed Davidoff Violet super Slim.
Illicit cigarettes negatively impact the leading players. Due to the high prices of branded cigarettes in Morocco, many of which recently increased as a result of the Internal Tax of Consumption hike, some smokers are turning to illicit cigarettes in order to maintain their habit without increasing expenditure.
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This industry report originates from Passport, our Tobacco market research database.