After four years of decline, cigarettes returned to slow retail volume growth in 2020. This was despite rising prices, which led to dynamic current value growth in this year, and despite the introduction of plain packaging for cigarettes from January.
However, not all cash-strapped consumers turned to cheaper legal cigarettes in 2020. Illicit trade gained ground during the COVID-19 pandemic, due to the resultant instability in the economy, job losses and reduced purchasing power.
Local company Monte Paz continued to dominate cigarettes in retail volume terms in 2020, and remained the only player in the category to produce its brands in Uruguay. Its only real competitors are Abal Hnos, a Philip Morris subsidiary, and British American Tobacco Uruguay.
After seeing a better performance in 2020, in 2021 cigarettes is expected to return to seeing a decline similar to those in the review period, with this trend set to continue for the rest of the forecast period. Consumption is projected to see a consistent moderate decrease due to less impact from COVID-19 as vaccination progresses, government regulation and high taxes.
As long as the economy remains unstable and the low- and middle-income social groups suffer a low employment rate, the share growth of premium cigarettes is likely to be limited. Economy brands are expected to gain slight share due to consumers’ price-consciousness, although mainstream mid-priced brands will remain by far the most popular and will continue to dominate.
Multinationals are expected to intensify their investment in developing the flavoured cigarettes segment in the forecast period. This is with the aim of differentiating from local brands, which have not been as successful in this segment, despite the launch of products by local player Monte Paz.
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Understand the latest market trends and future growth opportunities for the Cigarettes industry in Uruguay with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
Key trends are clearly and succinctly summarised alongside the most current research data available. Understand and assess competitive threats and plan corporate strategy with our qualitative analysis, insight and confident growth projections.
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This report originates from Passport, our Cigarettes research and analysis database.
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