Cigars, Cigarillos and Smoking Tobacco in Ireland

2021 DEVELOPMENTS

Fine cut tobacco reaches new highs for a second consecutive year

Fine cut tobacco was the best performing tobacco product for the second consecutive year in 2021, registering double-digit retail volume and current value growth rates. Gallaher (Dublin) Ltd continued to dominate fine cut tobacco in retail volume terms due to strong brand loyalty and the reputation of its Amber Leaf brand.

Cigars and cigarillos register slower decline in 2021 amid easing of restrictions

Retail value and volume sales of cigars, cigarillos and pipe tobacco recorded further declines in 2021, albeit at a slower rate due to the easing of COVID-19 restrictions and the lifting of the 5km limit by the Irish government. The relative increase in social occasions and celebrations in 2021 had a positive effect on the consumption of cigars, cigarillos and pipe tobacco.

James J. Fox launches cigarillos with natural hints of flavour

James J. Fox, the main tobacco retailer specialising in the sale of cigars, cigarillos and pipe tobacco, launched its own private label line of naturally flavoured cigarillos in 2021.

PROSPECTS AND OPPORTUNITIES

Sales of cigars, cigarillos and pipe tobacco will continue to decline due to high unit prices and rising price sensitivity amongst consumers

Despite the slower drop in demand for cigars and cigarillos in 2021 due to the easing of COVID-19 restrictions, it is likely that these tobacco products will continue to decline over the forecast period both in terms of retail volume and value sales, mainly because of the lack of appeal and popularity of these products amongst younger adults. High unit prices, the lack of promotion and limited product variety and availability will remain important obstacles, and will prevent future growth potential over the forecast period.

Projected decelerating growth for fine cut tobacco due to declining smoking rates and switch to illicit trade

Rising costs of living resulting from the aftermath of the pandemic will continue to impact consumer preferences over the forecast period. It is expected that an increasing number of current and future smokers will continue to resort to more affordable tobacco products, which will benefit fine cut tobacco at the expense of other categories due to lower costs.

Rise of e-commerce will provide lifeline to cigars, cigarillos and pipe tobacco

Sales of tobacco through e-commerce is not banned in Ireland and the upcoming licensing scheme does not explicitly mention restrictions on online sales. The licensing scheme is likely to have limited impact on the sale and distribution of cigars, cigarillos and pipe tobacco, because these products are already primarily sold in tobacco specialists, as smaller retailers find it too expensive to stock them.