Tobacco in the Netherlands

COVID-19 impact on tobacco

Demand for tobacco products is not predicted to be significantly impacted by the response to COVID-19 in the Netherlands in 2020, as other factors are set to help to shape the performance of this market. An ongoing decline in smoking prevalence amongst the adult population is set to continue to negatively impact demand for traditional tobacco products, particularly cigarettes.

COVID-19 country impact

Large gatherings were banned from 12 March. From Sunday 15 March all food and drink establishments were closed, followed by the schools a day later, albeit still remaining open to the children of healthcare and emergency service workers.

Smoking prevalence amongst Dutch adult population continues to decline in 2019 due to ongoing shift in attitudes and increasingly restrictive operating environment

Demand for traditional tobacco products (including cigarettes, cigars and smoking tobacco) continued to decline in the Netherlands in 2019 amidst an increasingly restrictive environment including ongoing tax increases in an attempt by the government to encourage a higher number of citizens to quit smoking or at least to reduce the amount of tobacco products that they consume. While smoking prevalence continued to decline in the Netherlands at the end of the review period in line with ongoing health campaigns and greater education levels amongst younger urban Dutch consumers who are becoming increasingly intolerant of smoking and its potential effects on non-smokers, further measures taken by the government have resulted in a core consumer group of cigarettes, lower-income males, turning to cheaper alternatives such as illicit trade which recorded an increase in 2019.

Major multinationals likely to be less hindered by further government restrictions due to top-of-mind positioning but other tobacco producers are attracted to further growth potential of e-vapour products

Large multinational manufacturers continued to dominate tobacco in the Netherlands in 2019, with domestic players mainly playing only a small role. Philip Morris Holland’s strong leadership of cigarettes in retail volume sales terms is underpinned by the high popularity of its Marlboro and L&M brands although variants of these lines performed differently with particularly strong performances by Marlboro Gold and L&M Blue.

E-vapour products and heated tobacco set to offer the strongest potential for growth over the forecast period as government efforts to reduce smoking prevalence are set to lead to further declines for traditional tobacco products

The effects of a double excise tax increase on cigarettes in 2020 is set to continue to be felt in 2021 with strengthening declines predicted in volume terms for much of the forecast period, and resulting in a further drop in smoking prevalence amongst the adult population in the Netherlands. This trend is likely to be further exacerbated by further measures taken by the government in 2020 including a POS display ban, the introduction of plain packaging and a ban on providing smoking areas at horeca establishments.

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