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.
This report comes in PPT.
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.
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.
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.
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.
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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