Cigars, Cigarillos and Smoking Tobacco in Turkey

2021 DEVELOPMENTS

The high price of cigarettes benefiting sales of smoking tobacco

Smoking tobacco continued to register double-digit growth in retail volume terms in 2021, with fine cut tobacco stealing considerable share from cigarettes as a result of the high prices of the latter. People with lower incomes and Turkey’s student population showed a growing preference for these products at the end of the review period, with the COVID-19 pandemic putting further pressure on consumer incomes.

Major cigarettes companies launch fine cut tobacco

One of the most important events of 2021 when it came to smoking tobacco was the sight of several leading cigarettes brands such as Marlboro, Camel, Tekel 2000 and Chesterfield being launched in fine cut tobacco in the last few months of the year. The smoking tobacco products being offered by these brands are more affordable than their cigarettes while they are also benefiting from the established distribution networks for these brands.

Sales of cigars/cigarillos benefit from drop in the excise taxes

In contrast to smoking tobacco, cigars and cigarillos suffered a heavy decline in volume sales in 2020. These products were already more exclusive due to their higher price compared to cigarettes; however, the average unit price of cigars and cigarillos shot up in 2020 after the OTV (excise) tax imposed for these products was increased from 40% in 2019 to 80% in January 2020.

PROSPECTS AND OPPORTUNITIES

Mixed results predicted in 2022 as prices rise across the board

The excise tax (OTV) on all tobacco products went up by 47.4% in January 2022 and another excise tax increase is expected around July 2022.

Fine cut tobacco set to be the big winner as consumers feel the pinch

Fine cut tobacco is expected to continue stealing share from cigarettes with the prices of the latter becoming excessively high after the excise tax increase in 2022. The entry of the major cigarettes companies – Philip Morris, British American Tobacco and JTI – into the category in the last few months of 2021 is seen to be a major game changer.

Independent retailers should benefit from new regulation on chained grocery retailers

Until 2021, tobacco specialists dominated the distribution of smoking tobacco. However, with the entry of the major cigarettes companies into fine cut tobacco these products have become more widely available at the small independent traditional retailers where cigarettes are also sold.