Almost uniquely among fmcg industries, tobacco legislation is not simply a guiding element or a means of enforcing consumer standards but a central determining factor in the performance of tobacco markets. As the cumulative de-normalising impact of regulation and taxation drives down smoking prevalence worldwide, regulators are looking to the margins, towards next generation measures that impair the revenue-generating capacity of manufacturers and further restrict access to tobacco products.
Since December 2012, when Australia became the first country in the world to fully implement plain packaging regulations, 15 more markets across regions have followed suit, and a growing number of countries are now also openly considering the measure. It is likely to be extended to other categories, such as e-vapour and heated tobacco.
A ban on menthol cigarettes was implemented in the EU on 20 May 2020, and similar measures are likely to be enforced in the US in the near future. This adds further momentum to flavour restrictions that could be replicated across other countries and extended to other categories, such as flavoured e-vapour products, which are seeing closer scrutiny globally after the vaping crisis in the US, when a large number of cases of lung disease, including some deaths, were linked to the use of e-vapour.
With international tobacco manufacturers increasingly openly referring to a future in which the combustion of tobacco is no longer mainstream, taxation of potentially reduced risk products is likely to reshape the tobacco industry globally. The US and the EU are already taking the first steps in e-vapour and heated tobacco legislation that might lead not just to further taxation but also stricter controls on product use.
The outbreak of COVID-19 is acting as an enabler to further extend controls and restrictions on tobacco products, due to its association with the spread of the virus and increased severity of disease. Along with new anti-smoking provisions, governments are also expected to increase taxation on tobacco to finance rising public expenditure, which might also benefit the legalisation of medical and recreational cannabis in countries seeking new sources of public income to weather this crisis.
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
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