With smoking prevalence among New Zealand’s population having been falling steadily for several years, the long-term trend in cigarettes retail volume sales is one of decline. The rate of decline deepened dramatically in 2020 due to the fallout of COVID-19, with the negative economic impact of the pandemic and increased health-consciousness motivating more smokers to quit or cut down.
The continued migration of smokers to e-vapour products also contributed to the decline in retail volume sales of cigarettes in 2021. Vaping is an increasingly popular alternative among New Zealanders who want to quit or smoke fewer cigarettes for health and financial reasons, as it is widely perceived to be less harmful and considerably more economical.
British American Tobacco remained the dominant company in cigarettes in retail volume terms in 2021, with Imperial Tobacco and Philip Morris placing second and third, respectively. Together, these three players continued to account for the lion’s share of total sales.
Retail volume sales of cigarettes are set to fall throughout the forecast period, with the average rate of decline projected to be deeper than that recorded over 2016-2021. Rising health-consciousness and steep unit price increases fuelled by regular hikes in excise tax will continue to encourage smokers to quit or cut down, and make young people less inclined to take up the habit in the first place.
New Zealand’s government sees the plan to reduce the nicotine content permitted in tobacco products to very low levels from 2025 as a key component of its strategy to further curb smoking prevalence rates. The reasoning is that cutting nicotine levels in cigarettes by as much as 95% will limit their appeal for existing smokers, making them more likely to quit, while also preventing young people who experiment with smoking from becoming addicted.
While the New Zealand government’s Smokefree Environments and Regulated Products (Smoked Tobacco) Amendment Bill has been lauded by anti-smoking advocates worldwide, there are fears its enactment may cause illicit trade in cigarettes to rise sharply over the forecast period. Professor Robert Beaglehole, chair of ASH and the Lancet NCD Action Group, supports plans to reduce the nicotine content of tobacco products and slash the number of stores where they can be purchased.
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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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