The Philippine market saw tobacco products other than cigarettes, such as cigars and cigarillos, e-vapour products and heated tobacco register growth in 2021 thanks to a more favourable economic environment in the country and the roll-out of vaccinations, which improved the situation in terms of the labour force and disposable incomes. With the health and wellness trend remaining prominent, this meant greater support for e-vapour products and heated tobacco, which are touted to be less harmful than cigarettes.
The Philippines saw the expansion of the illicit trade in cigarettes in 2021. This came in the same year as, and was not entirely unrelated to, an increase in unitary tax.
PMFTC remained dominant in cigarettes and heated tobacco in 2021, thanks to its strong brand equity and unmatched distribution. Despite the looming effects of illicit trade in cigarettes, the decline in overall market share of the company did not thwart its market leadership.
While other grocery retailers continue to contribute the bulk of cigarette sales, there has been notable growth in e-commerce. The ease of transactions on Shopee and Lazada has offered growth opportunities in cigars and cigarillos, e-vapour products, and heated tobacco.
The unitary taxation of cigarettes will continue to put pressure on the established players in the market, which could result in price wars. Rising taxation is likely to increase the threat represented to cigarettes by illicit trade, especially as official efforts to counter the trade were weakened during the COVID-19 crisis.
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Understand the latest market trends and future growth opportunities for the Tobacco industry in Philippines with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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Data and analysis in this report provides further detailed coverage dedicated to the following key categories, where applicable:
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Passport Tobacco covers the seven major tobacco categories: Cigarettes, Cigars & Cigarillos, Smoking tobacco (made up of Pipe tobacco and RYO tobacco), Smokeless Tobacco (snuff and chewing tobacco), E-Vapour Products (closed and open); Heated Tobacco; and Tobacco Free Oral Nicotine. Smoking paraphernalia such as pipes, rolling papers, lighters or matches, etc., are not included, nor are nicotine replacement therapy (NRT) products, which are part of Euromonitor's Passport Consumer Healthcare database.See All of Our Definitions
This report originates from Passport, our Tobacco research and analysis database.
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