Cigarettes experienced declining demand in Spain 2020 as a result of the pandemic. One major factor was the significant drop in tourist numbers to the country for part of the year due to restrictions on travel, while the local lockdown saw Spaniards spending longer period of time at home from March to June.
The menthol ban came into force on 20 May 2020, which was the final date defined by the EU for retailers to cease selling menthol cigarettes. Smokers who appreciate menthol flavours were therefore forced to search for alternatives including heated tobacco which offers menthol flavour options as the new law did not impact heated tobacco menthol options at the end of the review period.
Philip Morris Spain SA retained its leadership of cigarettes in 2020. However, its sales were impacted by some consumers searching for lower priced cigarettes; its key brands Marlboro and Chesterfield are positioned in the premium and mid price bands, respectively.
2021 is set to be a challenging year for tobacco and particularly for the largest category of cigarettes in Spain, resulting in further declines which are predicted to last over the course of the forecast period. Several expected legislative changes around the Circular Economy are expected with a further tightening of the Tobacco Control Laws as the announced by the government at the end of 2020 of its intention of increase smoke-free spaces in 2021.
The impact of the pandemic on the local economy resulting in an upturn in unemployment, particularly within the tourist industry, is also expected to negatively affect demand for cigarettes. However, with Spain gradually reopening its borders to tourists over the spring with higher inbound tourist numbers expected for the summer season depending on the threat level of the virus in certain major markets, the decline in volume sales is not expected to be as significant compared to 2020.
Some consumers are also expected to make a greater switch to fine cut cigarettes which is predicted to record a positive performance in both retail volume and value terms (at constant 2020 prices) over the forecast period due to their greater affordability, while fine cut tobacco also benefits from a more natural perception amongst some Spaniards. However, beyond pricing, as companies continue to invest in alternative tobacco products, an increasing number of cigarette smokers are predicted to make a greater switch towards heated tobacco and e-vapour products such as non cig-a-like closed system.
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Understand the latest market trends and future growth opportunities for the Cigarettes industry in Spain with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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This report originates from Passport, our Cigarettes research and analysis database.
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