Tobacco in Singapore

COVID-19 impact on tobacco

Demand for tobacco products in Singapore is predicted to continue to decline in 2020, in line with trends witnessed at the end of the review period as smoking prevalence amongst the adult smoking population further decreases. Circuit Breaker measures introduced by the government in response to COVID-19 in April 2020 however, resulted in the closure of non-essential businesses, which included tobacco specialists, the dominant distribution channel for cigars and cigarillos.

COVID-19 country impact

On 7 April, Singapore implemented its Circuit Breaker (CB) measures, under which people were only allowed to go out for essential shopping, such as groceries, and exercise, and only essential businesses, eg grocery stores, markets, selective restaurants for takeaway only, government bodies and infrastructure-related businesses, remained open. The authorities announced that, without any unforeseen spikes, CB was scheduled to be lifted on 1 June.

Further declines for tobacco in 2019 as measures introduced by government in attempt to reduce smoking prevalence continue to impact demand

All areas of tobacco in Singapore recorded further declines in demand in 2019 following the strengthening of regulatory controls by the government in its efforts to reduce the smoking prevalence rate amongst the adult population with a target of 10% by 2020. The market continued to react to a point-of-sale display ban introduced at the end of 2017 on all tobacco products in stores which has made it increasingly difficult for producers to promote their products, especially to newer smokers in addition to a tax increase in 2018.

Further consolidation amongst tobacco players in 2019 as smaller brands continue to struggle to gain consumers’ attention following point-of-sale display ban

Philip Morris Singapore Pte Ltd retained its leadership of cigarettes in Singapore in 2019 through its well-established brands, the premium Marlboro, including its menthol variants, and the economy-positioned L&M, which performed more positively in 2019 compared to its premium counterpart due to increasing demand for economy cigarettes. However, the player continued to lose retail volume share to its closest competitor JT International (Singapore) Pte Ltd, which has a stronger focus on economy cigarettes, particularly for its second-ranked brand LD.

Tobacco is set to continue declining over the forecast period as government introduces further regulatory controls to reduce smoking prevalence

Tobacco in Singapore is predicted to record ongoing declining demand over the course of the forecast period, driven mainly by the largest category of cigarettes, which is set to continue to experience a gradual strengthening in decline from 2021 onwards. However, following strong declines predicted for cigars and cigarillos in 2020, when access to the main distribution channel of tobacco specialists was closed during the country’s lockdown (Circuit Breaker measures), local consumers are set to temporarily replenish their stocks of these products in 2022, before normalisation in terms of purchasing behaviour returns from 2022 resulting in low declines in volume terms.

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