In 2020, value sales of cigarettes grew by 7% due to price increases; however, retail volume sales continued to decline. The declining demand for cigarettes is partly the result of further tax increases, part of the Dutch government’s efforts to reduce smoking prevalence amongst the adult population.
Tax increases on cigarettes have driven stronger demand for illicit trade within the category; however, only a marginal increase in illicit cigarettes was seen for 2020, as supply was impacted by closed borders from neighbouring countries such as Belgium and Germany. Nevertheless, any illicit products already present in the Netherlands were made available as the country was not subject to such restrictive movements compared to some EU countries, with citizens advised, but not forced, to remain at home until 11 May.
The EU wide menthol ban was instated in the country from 20 May 2020. As such, sales of menthol products stopped on that day, with menthol brands, such as Marlboro menthol and Kent Menthol, showing significantly lower sales in 2020 as a result.
A stronger volume decline is predicted for cigarettes from 2021 onwards due to ongoing tax increases. While the impact of COVID-19 is unlikely to have a significant long-term impact on demand, it is set to increase the focus on health and wellness.
The government is set to continue focusing on ways to reduce smoking in the country, and this will impact the sales of cigarettes across the forecast period. The government will ban the sale of cigarettes in an increasing number of channels.
Across the forecast period, the population of smokers in the Netherlands will continue to decrease. The public attitude towards smoking is becoming increasingly negative, and this will only be boosted by the outbreak of COVID-19, with consumers more concerned about their health.
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This report originates from Passport, our Cigarettes research and analysis database.
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