Cigarettes in Switzerland

PROSPECTS

Smokers switch from cigarettes to heated tobacco for health reasons

After the relatively low retail volume declines of cigarettes in 2017, sales again witnessed fairly steep declines in 2018. The recent launch of HEETS heated tobacco by Philip Morris continued to perform exceptionally well in 2018 and cannibalise sales from cigarettes.

Cigarette smokers economise as purse strings tighten

Although mid price and premium cigarettes remained by far the most popular in 2018, there was an ongoing switch to economy versions or to fine cut or heated tobacco. Smokers have been looking to save money by switching to economy cigarettes throughout the review period, and this continued into 2018.

Smoking prevalence to decline due to health concerns

Smoking prevalence has declined steadily over a number of years in Switzerland, and, despite flattening out in 2016 and 2017, it again witnessed a minor fall in 2018 and this is set to continue over the forecast period. The Swiss government regularly runs campaigns advising of the health issues associated with smoking, and these are set to have some effect going forward, with a small decline in the actual number of smokers anticipated over the forecast period.

COMPETITIVE LANDSCAPE

British American Tobacco active in new flavour capsules

British American Tobacco Switzerland was particularly active in new product development in 2018, such as Camel Double Activate and Kent Mix. The player focused on offering new flavour capsules, including new pairings of flavours and new technologies such as double capsules.

Philip Morris focuses on heated tobacco at the expense of cigarettes

Philip Morris had an instant impact with the launch of its HEETS heated tobacco brand in 2015 and continued to record strong growth over the rest of the review period and into 2018. The company positions HEETS as a less toxic alternative to cigarettes and has published its goal to encourage 100,000 cigarette smokers to switch to HEETS and abandon conventional cigarettes by the end of 2019.

Japan Tobacco International and British American Tobacco also to focus on heated tobacco

Japan Tobacco International and British American Tobacco Switzerland both entered heated tobacco at the end of 2017 with their respective Plume TECH and Kent Neostiks brands. Both players increased their shares in 2018, although remaining far behind the pioneer in heated tobacco in Switzerland, Philip Morris.

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