Despite the improvement in the Philippine economy in 2021, the cigarettes category continued to struggle and experienced further decline. Market leader, Philip Morris Fortune Tobacco Corp (PMFTC), maintained cost-containment measures to limit the decline in cigarette volumes, which meant that brands such as Jackpot, Fortune, and Marlboro did not increase prices notwithstanding the annual tax hike on cigarettes.
Beyond the challenges of COVID-19, the greater interest in heated tobacco following the launch of Iqos under PMFTC’s distribution in 2021 has made consumers re-think smoking cigarettes. PMFTC has positioned Iqos as an alternative to cigarettes, a message which has been well received in Metro Manila and other urban areas.
Despite the challenges brought on by the COVID-19 crisis, Philip Morris Fortune Tobacco Corp (PMFTC) maintained its dominant position in 2021. PMFTC relaunched Chesterfield as an economy brand in January 2021, showing its commitment to increasing product variety and availability across various price points.
With the compounding effect of sin tax set to increase annually, COVID-19 pressures, and price competition amongst players, the prospects for cigarettes during the forecast period are not promising. Notably, due to the economic fallout of the pandemic, consumers will impose greater prioritisation on their spending which may deter some people from buying cigarettes, or at least stimulate a switch to cheaper alternatives.
While other types of tobacco products are flourishing in the e-commerce channel, sari-sari stores will remain responsible for the bulk of the cigarettes category’s retail volume sales. With its large number of price conscious consumers bolstered by the economic fallout of the COVID-19 crisis, the Philippine market will maintain its dependence on a per-stick basis of selling cigarettes, which is not feasible in other retail channels.
The Philippine Government’s support for heated tobacco and e-vapour products through the “vape bill”, legislation that supports such products’ positioning as less harmful alternatives to cigarettes, is likely to have an adverse effect on cigarettes sales during the forecast period. At the time of writing, the bill is pending the signature of the incumbent president, Rodrigo Duterte.
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Understand the latest market trends and future growth opportunities for the Cigarettes industry in Philippines with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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RETAIL SALES OF DUTY PAID CIGARETTES The definition of cigarettes for the purposes of this study is duty-paid, machine manufactured white-stick products. This does not exclude brands of cigarettes that do not use white paper but it is designed to exclude the volume of non-machine manufactured products such as bidis/beedis (India) and papirosy (Russia), and other smoking products made with tobacco but that either do not resemble cigarettes as recognised in the US or Europe, or those that are not machine manufactured. The exclusion of these products is intended to give a more accurate picture of the "true" market for cigarettes and cigars which has been distorted in official statistics and published reports because of the inclusion of hybrid products. NB Please note that due to its central importance and integration into the industry mainstream, Indonesia’s market data does include hand-rolled kreteks DUTY-FREE sales are excluded from retail sales, as are herbal cigarettes. ILLICIT TRADE CIGARETTES Not included in retail sales, but split out separately in volume terms only. Defined as non-duty paid cigarettes (includes smuggled & counterfeit/fake products combined). Legitimate cross-border sales are considered duty-paid. Sales arising from a foreign national purchasing cheaper cigarettes in bulk in a neighbouring country for personal use and exported back are attributed to the country where the purchase is made (e.g. bulk cigarette sales by British nationals in France are attributed to France).See All of Our Definitions
This report originates from Passport, our Cigarettes research and analysis database.
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