Cigarettes in the United Arab Emirates

PRE-COVID-19 PERFORMANCE

The introduction of minimum pricing results in changes to price tiers

During 2019, the minimum price threshold set by the government was reduced to AED8.00 per pack of 20 sticks.

Impact of excise taxes now waning as consumers are accustomed to higher prices

The introduction of excise tax on tobacco in October 2017 was the first step towards the United Arab Emirates adopting a comprehensive anti-smoking platform. Excise tax is seen as representing an incentive for consumers looking to quit by raising the cost of smoking to the point where consumers think twice about the cost of the habit.

Rising health awareness and smoking cessation suppress demand for cigarettes

In addition to the measures mentioned above that were taken by the government of the United Arab Emirates towards the end of the review period to curb smoking prevalence in the country, the Ministry of Health and Prevention has also undertaken significant measures to improve consumer awareness of the dangers of smoking. There are provisions in recently passed anti-smoking laws for the government to take responsibility for information and education campaigns to discourage people from smoking.

2020 AND BEYOND

COVID-19 impact

Sales of cigarettes are now expected to grow marginally in constant 2019 value terms in 2020 overall in light of the impact of COVID-19. This compares favourably to the 2% decline in sales forecast in our 2019 edition of tobacco.

Recovery and opportunities

With the COVID-19 pandemic and ensuing economic slowdown having had no negative impact on cigarette sales, the forecast period is expected to see the category more affected by regulation and price increases. With the government having recently taken action against the significant illicit trade in cigarettes, category sales are expected to be supported by the diminishing influence of illicitly traded products.

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