Cigarettes in Uruguay

PROSPECTS

Government efforts against tobacco impact sales

The government has made strong efforts to reduce the consumption of tobacco products. Amongst the different regulations, it is prohibited to smoke in enclosed spaces and public places, and close to hospitals and education premises.

Illicit trade increases in the review period

With increasing unit prices due to the government restrictions on tobacco producers and continuously increasing taxes, there is growth in illicit trade in the country. It is becoming increasingly difficult for consumers to buy legal cigarettes, especially middle- and low-income consumers.

A continued volume decline expected

The government has announced that it will continue to make efforts to decrease the rates of smoking in the country, with more increases in taxes, and more restrictions on producers, from implementing plain packaging to further restricting the places where people can smoke. Those efforts from the government are expected to continue to have a negative effect on volume sales of cigarettes in the country.

COMPETITIVE LANDSCAPE

Cía Industrial de Tabacos Monte Paz remains the leading company

Cía Industrial de Tabacos Monte Paz is a local company and was the leader in cigarettes in volume terms throughout the review period. The company is very well-established in the country, totally dominating cigarettes, with competition from only two companies; Abal Hnos (GBO Philip Morris International) and British American Tobacco Uruguay.

Two much smaller players, with little chance of new entrants

The only other two companies in cigarettes, Abal Hnos (GBO Philip Morris International) and British American Tobacco Uruguay, held much smaller volume shares than Monte Paz in 2017. With increasing restrictions from the government leading to unit price rises, these smaller companies are having to fight hard to not lose sales.

Uruguay wins the trial against Philip Morris

In 2010, Philip Morris International sued Uruguay, claiming that the country violated the bilateral investment treaty with Switzerland. The company was against the new law that restricted the presentation of cigarettes, with health warnings covering 80% of the boxes.

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