Cigars, cigarillos and smoking tobacco posted severe declines for a second consecutive year in 2021 since the outbreak of the pandemic in Morocco. The decline was largely driven by the critical drop in demand for cigars, which, in Morocco, is still perceived as a luxury product, rather than being as essential as cigarettes.
In 2021, cigars experienced further price increases as was the case across tobacco. Amid rising prices, most consumers preferred to purchase cigars from duty free shops when they could travel, where prices are 20% to 30% lower.
For the second consecutive year, smoking tobacco posted negative sales, mainly due to the closure of hotels, bars and cafés. Despite the reopening of such outlets, pipe tobacco remained banned at the end of the review period.
There is a limited number of pipe tobacco products in Morocco, with brands such as Al Nakhla, Al Khayma, Mazaya and Al Arabi present in the economy segment, and Al Fakher in the premium segment. However, the prices remain unaffordable to mass consumers, and therefore a large number of Moroccans prefer to buy unpackaged pipe tobacco by weight in grams from tobacco specialists.
While Société Marocaines des Tabacs dominates cigars, North Africa Tobacco holds the dominant retail volume share in smoking tobacco. Further to the acquisition of the Al Nakhla brand in 2014 by Japan Tobacco Inc (the sole brand present in Morocco then), this well-established brand became officially distributed by North Africa Tobacco.
Cigars is expected to post a sluggish performance in retail volume terms over the forecast period, with the latter set to record a CAGR of -3% due to the persisting effects of the pandemic and the weak economy, which will continue to have a dire impact on household incomes. Moreover, the price sensitivity of many Moroccans and the relatively low-income levels of most consumers in the country will limit the growth potential of cigars, which is generally seen as a luxury product.
With the lingering impact of the pandemic and the surge of new virus variants, it is unlikely that restrictions will be further relaxed in the short-term period, with authorities continuing to ban smoking pipe tobacco in cafés and bars and also ban any social gatherings or events, especially as Moroccans like to smoke shisha in groups rather than individually. Declining disposable incomes will also force many consumers to turn to illicit or unpackaged pipe tobacco by weight, given the rising prices.
While Société Marocaines des Tabacs dominates cigars, North Africa Tobacco will maintain its monopoly of smoking tobacco. Société Marocaines des Tabacs is the exclusive distributor of Corporación Habanos SA in Morocco and distributes internationally-renowned cigars such as Cohiba, Montecristo, Partagás Lusitanias, and Romeo y Julieta Churchills.
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Cigars, Cigarillos and Smoking Tobacco
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