In 2021, Vietnam saw periodic recurrent waves of COVID-19. Consequently, governmental authorities announced the closure of all non-essential businesses and entertainment activities such as bars, beauty salons, gyms, karaoke parlours, night clubs, massage parlours, and cinemas until further notice in response to the city recording more than 25 cases in a single day.
Economy cigarettes struggled due to the economic impact of COVID-19, with these being the primary choice of lower-income consumers. Many low-income consumers were already facing budgetary constraints even before COVID-19 but following the outbreak of the virus this pushed many smokers within this group to either cutback on cigarettes or quit altogether, with these consumers having to focus on first-need priorities such as food and medicines.
The Vietnamese government largely controls the country’s tobacco industry through its ownership and management of Vietnam National Tobacco Corp (Vinataba). Vinataba continued to dominate cigarettes in retail volume terms in 2021.
Cigarettes is projected to see steady growth in retail volume terms from 2022 as COVID-19 restrictions are lifted and the economy reopens. Low-income consumers should once again be able to afford to purchase cigarettes, which would be significant, while it would also provide a boost to Vietnam National Tobacco Corp (Vinataba), for which these consumers represent a key source of sales.
In January 2022, the Vietnamese government proposed a plan to increase the tax on tobacco products by 85% or VND5000 per pack. The increase in excise tax is expected to have an impact on the prevalence of smoking in the country.
Cigarettes also faces the dual challenge of declining smoking prevalence and the potential rise of alternative products which are perceived to be less harmful, such as heated tobacco. With the leading tobacco companies looking to diversify their offering into these new product areas it is unlikely that cigarettes will see significant growth over the forecast period, although a large and loyal consumer base should ensure sales do continue to grow.
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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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