Retail volume sales of smokeless tobacco soared in 2015, as taxes increased on cigarettes and there was a clampdown on illegal smoking tobacco and cigarette sales in many regions. Growth was also encouraged by many economy brands of guthka expanding distribution, in response to growing demand from low-income consumers. While paan betel nut chewing tobacco is also available in Pakistan, guthka is the area of smokeless tobacco that is driving growth as it is cheaper and stronger. Furthermore, in many areas smoking cigarettes is seen as less socially acceptable than chewing tobacco.
There was a surge in the number of small local players selling smokeless tobacco via retail channels towards the end of the review period. Many shifted into formal production from informal sales due to growing demand, while still continuing to have only a local distribution presence. As a result, the share of "others" more than doubled in 2015 over the previous year, rising to a dominant 51% of retail volume. The majority of these small players meanwhile compete mainly on price, with most products being unbranded, with this resulting in economy products gaining share strongly.
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This industry report originates from Passport, our Tobacco market research database.