Tobacco in Canada

Steady decline in number of smokers is a major trend during the review period

There is a general consensus among industry stakeholders that smoking is less popular after years of consumer education, tighter regulations and economic deterrents such as tax hikes. Social norms are also less accepting of smoking and, therefore, younger demographic groups are not as drawn to tobacco products as older generations.

Bill-S5 is set to make major regulatory changes with regard to tobacco products

Bill-S5 – Act to amend the Tobacco Act and the Non-smokers’ Health Act – and to make consequential amendments to other Acts is passing its final stages in the legislative system and is expected to become fully implemented by 2019. This bill is set to make major modifications regarding vapour products regulations while imposing mandatory plain packaging within the tobacco industry.

Key suppliers promote heated tobacco as a promising alternative to cigarettes

In the light of ever-increasing regulatory pressure and declining smoking prevalence, major players in the tobacco industry continued to focus on profitability and, at the same time, gradually turned their attention to vapour products for growth. GBO Philip Morris International expanded its Iqos product platforms to Canada in 2017 as part of its plan towards a “smoke-free future”.

Tobacco distribution remains stable while vapour products awaits shift

There was little change to the distribution landscape for various products including cigarettes, cigar/cigarillos, smoking and smokeless tobacco, except for the gradual impact of more stringent regulation and tax hikes. Specifically, a flavour ban in many parts of Canada led to supply issues and product availability at many convenience stores and forecourt retailers – both chain and independent – in recent years.

Emerging categories like vapour products and heated tobacco are expected to grow rapidly in line with the continued decline of traditional tobacco products

Canadian consumers are expected to be more concerned about the consequences of smoking for their health during the next five years which will further deter them from smoking cigarettes. If government and health authorities decide to support vapour products and heated tobacco as less harmful options with more relaxed regulations and lower taxes, then many consumers are likely to switch to these products.

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