In 2020, the illicit trade of cigarettes, following the ban on legitimate sales in 2020, increased to account for over 40% of the category. Even though there was a ban on sales of cigarettes in 2020, sales of cigarettes continued during this time.
British American Tobacco (South Africa) Ltd continued to lead the cigarettes category but saw major declines in 2020 directly as a result of the tobacco sales ban and the growth of local players who sell their brands on the fringes of being considered legal. Peter Stuyvesant continued to be their top selling brand in mid-priced price platform, followed by Pall Mall in the economy price band.
Gold Leaf Tobacco Corp Pty Ltd, the biggest local player, saw growth this year owing to strong brands in the economy price range, namely Chicago and RG. The latter was, arguably, the top selling brand during the national lockdown period in 2020.
The illicit cigarette trade further cemented its position in South Africa during the national COVID-19 lockdown in 2020. During this period, the illicit trade exploded from approximately 25% of the market in 2019, to 100% of the total market during the 5-month sales ban.
One substantial trend noted during the COVID-19 pandemic was a shift towards local brands that were more widely available in 2020, even though they may not have actually been cheaper than their usual brands. Consumers reconsidered their favoured brands as they realised the local brands also feed their cravings and the brands are not necessarily of lower quality.
Despite the industry remaining fiercely competitive, especially as local players are increasingly gaining shares from the big players, one thing they all agree on is that, going into the forecast period, more excise taxes, among stricter regulations will be enforced and implemented. Usually, any announcements on tax increases or new restrictions on advertising or point of sales are not open for consultation with the industry players.
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Understand the latest market trends and future growth opportunities for the Cigarettes industry in South Africa with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
Key trends are clearly and succinctly summarised alongside the most current research data available. Understand and assess competitive threats and plan corporate strategy with our qualitative analysis, insight and confident growth projections.
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This report originates from Passport, our Cigarettes research and analysis database.
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