The overall cigarette landscape in 2020 registered lower levels of value growth, with 9% recorded compared to 11% the previous year. In addition, retail volume sales took a sharp fall due to the economic slowdown triggered by the outbreak of COVID-19.
Multiple tax increases in recent years have negatively impacted the average unit price of cigarettes, impacting consumers' buying habits. As a consequence, most Tunisian smokers continued to prefer economy brands in 2020.
The proportion of illegal trade in Tunisia is still high, despite registering decreases every year. Smuggled products, especially from Algeria, represent a problem for local consumption.
Volume growth of cigarettes is expected to start its recovery in 2021, recording positive growth each year to reach a volume CAGR of 2%. The polarisation in price segments seen in 2020 is expected to continue, with mid-priced cigarettes set to continue to see share decline, with premium cigarettes, and economy cigarettes seeing share growth to a lesser extent.
Aiding the recovery of cigarettes across the forecast period will be the entrance of supermarkets and hypermarkets as a new distribution channel. This move will also help to stabilise selling prices, offering consumers more convenience, and a bigger product choice.
The continued decline in illicit trade is expected to be one factor contributing to growth over the forecast period, bringing the percentage of illicit trade volumes down to a very low level by 2024, increasing demand for legal products. Efforts by the local authorities to tackle the illicit trade of cigarettes towards the end of the review period were particularly successful.
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This report originates from Passport, our Cigarettes research and analysis database.
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