COVID-19 had an overall negative impact on sales of cigars, cigarillos and smoking tobacco in 2020. This was primarily tied to the COVID-19 restrictions and social distancing measures which included the closure of cafés and restaurants that serve shisha, hookah or cigars.
In 2020, cigars, cigarillos and smoking tobacco was negatively impacted by the COVID-19 pandemic due to the closure of many on-trade outlets associated with social smoking occasions, such as shisha cafés, for instance. During the national lockdown period in March 2020, however, there was a notable shift towards the private consumption of pipe tobacco as consumers switched to consuming products in this category at home rather than in on-trade locations.
The introduction of excise tax on cigars had a major influence on category sales before the outbreak of COVID-19. The very high prices charged per cigar meant that these products were hit hard by excise tax due to the ad valorem calculation of this tax.
Demand for cigarillos will remain low over the forecast period, with the category’s leading players struggling to attract the interest of consumers. In the forecast period, cigarillos is only projected to demonstrate a low level of growth, with no noticeable recovery expected from the sharp loss of volume sales at the end of the review period or during the COVID-19 pandemic.
Over the forecast period, cigars is not expected to make a significant recovery from the heavy decline in sales recorded during the COVID-19 pandemic. In fact, cigars is expected to become more of a niche category, largely limited to affluent consumers looking for a specific experience and high quality tobaccos.
Over the forecast period, shisha consumption is expected to post a notable recovery from the decline in volume sales caused by the COVID-19 pandemic. Pipe tobacco is projected to register a further (but much less severe) decline in sales in 2021 whilst some restrictions and the fear of COVID-19 contraction continue to affect consumer decision making.
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