Over the review period and during 2021, the consumer base of cigars, cigarillos and smoking tobacco remained relatively stable, while the prevalence of smoking continued to decline. The implementation of the plain packaging regulation and tax rises significantly dampened the willingness and ability of consumers to purchase cigars, cigarillos and smoking tobacco.
There were some notable changes in the cigars, cigarillos and smoking tobacco competitive landscape during 2021, largely stemming from the plain packaging regulation and the contraction of cigar, cigarillos and smoking tobacco sales in the country. A number of major cigar brands struggled to adapt the packaging of their cigars to the Canadian market, resulting in supply chain disruptions and shortages, while some brands (e.
In light of the stricter regulations and increases in tax rates for cigars, cigarillos and smoking tobacco, there were changes in the distribution channels for these products during 2021. In particular, cigar lounges and smoking lounges are gradually disappearing from provinces in Canada, except for Quebec (e.
Heightened awareness of health and wellness due to the pandemic, particularly around respiratory illnesses and disease, is predicted to lead to further declines in retail volume sales across cigars, cigarillos and smoking tobacco in the forecast period. This performance is underpinned by the anticipated declines in smoking prevalence and opportunities for smoking, especially as people return to their pre-COVID-19 lifestyles.
The plain packaging regulation is expected to continue to exert an influence on the sales of cigars, cigarillos and smoking tobacco in Canada over the forecast period. A number of premium cigar players, such as the owners of major Cuban cigar brands, decided not to make Canada-specific packaging for the domestic market, partly due to the relatively small market size, alongside elevated regulatory pressure.
As in cigarettes, the major brand owners are expected to diversify their portfolios by moving into new categories, such as “reduced-risk” products, nicotine pouches, heated tobacco and/or cannabis products. For example, major tobacco players like British American Tobacco are seeking to protect and improve profit margins and offer products that help to change consumer preferences as sales of cigars, cigarillos and smoking tobacco continue to decline.
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Cigars, Cigarillos and Smoking Tobacco
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