Cigarettes in Western Europe

September 2022

The pandemic caused notable behavioural change in most consumers, with government regulations contributing to disparate affects on the channel distribution, brand success and overall growth of cigarette markets across Western Europe. Rising taxation, anti-smoking legislation and sales of next generation products has caused volume sales of cigarettes to continue to fall. The squeeze on disposable incomes in the wake of the pandemic is expected to exacerbate the decline over the forecast period.

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Key findings

Average cost per stick rises across region

The current unit price per stick has increased throughout the review period (2016-2021) in all nations due to rising taxes, and in Turkey’s case, also premiumisation. These price hikes were heightened during the pandemic due to cost push inflation, as transportation, energy and raw material costs rose. These increases come despite many nations seeing downtrading between price bands occur.

Pandemic ushers unprecedented volume and value growth in cigarettes

The pandemic caused many to return to cigarettes with the closure of vaping stores in key nations such as Germany and the UK, increase their smoking occasions due to stress or boredom and stockpile, coupled with a reduction in availability of illicit trade, enabled volume sales to see black for the first time since 2015 in 2021. The volume increases were combined with tax increases across the region which meant value sales were positive in 2020 and 2021.

Channel distribution remains highly diversified across region

The distribution landscape for cigarettes is highly fragmented in Western Europe. The latest two years of the review period (during the pandemic) caused notable changes to the orthodox channel distribution. Indeed, depending on each country’s government policy, disparate gains and losses were made.

Western European cigarettes market dominated by top four players

The largest players in Western Europe are PMI, Japan Tobacco, BAT and Imperial Brands respectively. PMI has remained flat and even declined in the last two years of the review period due to its exposure to the premium and declining Marlboro brand as well as prioritising its heated tobacco products. Japan Tobacco, and to a lesser extent BAT, have taken share from PMI, being more diversified across price bands. Imperial dominates the UK market but lacks the reach of the other three. No other players compete on a regional level.

Introduction

Scope
Key findings
Illicit tobacco set to stabilise over forecast period
Illicit tobacco linked to excise tax increases

Regional overview

Retail volume decline in Western Europe
Cigarettes anticipated to continue downward trajectory
Pandemic triggers divergent value growth in some nations with most showing negative development
Some of the largest cigarette markets see strong declines in all price bands
Regular dominates region’s volume sales, yet alternative formats eye growth opportunity
Rising prices prompt consumers to purchase larger pack sizes
All price bands suffer in Germany, Italy and the UK
Price rises underpin price band success
Decline in sales concentrated in regular cigarettes
Slim/ superslim show greatest potential
20s dominate Western European sales
Larger pack sizes grow in face of cost of living crisis and price rises
Convenience and non-grocery specialists drive growth in sales distribution (1)
Convenience and non-grocery specialists drive growth in sales distribution (2)

Leading companies and brands

Top players monopolise Western European cigarettes
PMI enjoys greatest share of Western Europe’s competitive landscape
Chesterfield climbs to fourth position in Western Europe
Major players have widest reach in region

Forecast projections

Tax increases quell retail value declines in a few nations (1)
Tax increases quell retail value declines in a few nations (2)
Volume sales to see declines given economic malaise, rising prices and health concerns

Country snapshots

Heated tobacco sales in Germany
The Netherlands stiffens crackdown on cigarette consumption
Innovation in response to declining volume sales in Greece
Austria: Market context
Austria: Competitive and retail landscape
Belgium: Market context
Belgium: Competitive and retail landscape
Denmark: Market context
Denmark: Competitive and retail landscape
Finland: Market context
Finland: Competitive and retail landscape
France: Market context
France: Competitive and retail landscape
Germany: Market context
Germany: Competitive and retail landscape
Greece: Market context
Greece: Competitive and retail landscape
Ireland: Market context
Ireland: Competitive and retail landscape
Italy: Market context
Italy: Competitive and retail landscape
Netherlands: Market context
Netherlands: Competitive and retail landscape
Norway: Market context
Norway: Competitive and retail landscape
Portugal: Market context
Portugal: Competitive and retail landscape
Spain: Market context
Spain: Competitive and retail landscape
Sweden: Market context
Sweden: Competitive and retail landscape
Switzerland: Market context
Switzerland: Competitive and retail landscape
Turkey: Market context
Turkey: Competitive and retail landscape
UK: Market context
UK: Competitive and retail landscape

Tobacco

Passport Tobacco covers the seven major tobacco categories: Cigarettes, Cigars & Cigarillos, Smoking tobacco (made up of Pipe tobacco and RYO tobacco), Smokeless Tobacco (snuff and chewing tobacco), E-Vapour Products (closed and open); Heated Tobacco; and Tobacco Free Oral Nicotine. Smoking paraphernalia such as pipes, rolling papers, lighters or matches, etc., are not included, nor are nicotine replacement therapy (NRT) products, which are part of Euromonitor's Passport Consumer Healthcare database.

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