Cigarettes in South Africa

PROSPECTS

Migration from cigarettes to e-vapour and heated tobacco products set to continue

Cigarettes retail volume sales in South Africa are expected to continue declining over the forecast period. The declining trend will persist as more cigarette smokers, particularly millennials, migrate to e-vapour and heated tobacco products, which are perceived as less harmful to health.

Legislative changes likely to curb sale of loose cigarettes

The sale of loose cigarettes (ie single sticks) remains widespread in South Africa. Such sales are not confined to informal traders, with many formal retailers also offering single sticks of various brands for around ZAR3.

Industry bodies commit to tougher action on illicit trade in cigarettes

Efforts to combat the illicit trade in cigarettes in South Africa look set to intensify over the forecast period. 2018 saw the Tobacco Institute of Southern Africa (TISA) and the Fair-Trade Independent Tobacco Association (FITA) commit to taking stronger action against any of their members found to be facilitating illicit trade by violating local tax, customs and excise laws.

COMPETITIVE LANDSCAPE

British American Tobacco remains dominant but continues to lose ground

British American Tobacco remained the dominant player in cigarettes in 2018. However, its overall retail volume share was down on 2017, maintaining the declining trend observed throughout the review period.

TISA-funded report raises tensions between local producers and multinationals

Late 2018 saw the publication a report on the illicit cigarettes trade in South Africa commissioned by TISA, which mainly represents large multinationals such as British American Tobacco and Philip Morris. This report suggested domestic manufacturers were responsible for the bulk of illicit trade, claiming local brands were those most commonly sold at prices below ZAR17.

British American Tobacco launches Peter Stuyvesant Evolve range

Facing growing competition, British American Tobacco sought to shore up its position in cigarettes in 2018 with the launch of the Peter Stuyvesant Evolve range. The range offers a number of flavours, including a menthol variant.

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