The Middle East and African region recorded the fastest growth globally as the smoking population is progressively increasing. The cigarette industry remains highly consolidated as internationally recognised brands remain dominant. Local brands within economy priced remain popular owing to increased taxation leading to consumers downtrading. Growth in volume and value terms will remain strong over the forecast period despite the threat from illicit trade.
Increased taxes on cigarettes resulted in large-scale price hikes and consumers trading down to cheaper alternatives. Consequently, there were anticipated price increases due to expected increased production costs. However, this is unlikely to cause much change in demand or growth as the region’s smoking prevalence remains high. To some extent, this has impacted on the prevalence of the illicit trade as price-sensitive consumers are opting for cheaper cigarettes.
Contrary to the global trend of decreasing volumes, the MEA region boasts rapid growth in volume and value terms. With the growing young adult population, changing perspectives of females smokers and openness of trade enables international players to partner with local producers for distribution.
In line with increased taxes and due to imports, it has been observed that some companies opted to reduce imports and instead focus on local manufactured brands by investing in production facilities as well as increasing distribution of local brands.
Across the region the emergence of menthol offerings has seen these flavoured brands become the preferred variant. These offerings are particularly popular among new smokers who enjoy the flavoured offering more than conventional cigarettes.
Other grocery retailers and small independent grocers are found throughout the region, notably in both rural and urban areas. While sales in the formal channel are restricted by bans on advertising and sales of single sticks remain evident, these factors are less governed/implemented in less formal channels such as grocery retailers and independent small grocers.
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