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June 27, 2014

Smoking Ban in Chile Reduces Cigarette Consumption

 

In 2013, Chile's legislative body prohibited smoking in all enclosed public places such as bars, restaurants and stadiums. The tobacco market in Chile is enormous, with smokers in the country lighting up 8 times a day on average, and the ban has had a huge effect on the market, reducing consumption of cigarettes in the country by 7 percent from 2012 to 2013. The Chilean government has also heavily taxed cigarettes and passed a law outlawing additives that may increase addiction with the purpose of reducing the amount of money spent on health care. In response to these taxes, tobacco companies are releasing new economy and basic brands of cigarettes.

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Prohibición de fumar en Chile reduce consumo de cigarrillos

 

En 2013, el órgano legislativo de Chile prohibió fumar en todos los lugares públicos cerrados, tal como bares, restaurantes y estadios. El mercado de tabaco en Chile es enorme, con fumadores que encienden en promedio 8 cigarrillos al día. La prohibición ha tenido un enorme efecto en el mercado, reduciendo el consumo de cigarrillos en el país un 7 por ciento desde 2012 a 2013. Con el fin de reducir la cantidad de dinero que se gasta en atención sanitaria, el gobierno de Chile también ha gravado los cigarrillos y aprobado una ley que prohíbe los aditivos que pueden aumentar la adicción. En respuesta a estos impuestos, las empresas tabacaleras están lanzando nuevas marcas económicas y básicas de cigarrillos.

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June 26, 2014

Hyper-activity in E- Cigarettes But Are We Heading East...Or West?

Don2Analyst Insight by Don Headley - Contributing Analyst

In addition to the E-lites acquisition by Japan Tobacco, much is happening elsewhere in the hyperactive vapour sector including the acquisition by a US e-cigarette company VEC of UK e-cigarette company Ten Motives which, interestingly, measures its growth in terms of the number of regular cigarettes it has replaced. The scramble to get a piece of the action in a new global FMCG continues. The number of e-cigarette users in the UK has soared, from 700,000 in 2012, to 2.1m in 2014 according to Action for Smoking on Health (ASH). The US investment bank Wells Fargo has predicted that e-cigarettes could be outselling conventional cigarettes within a decade. Another finding going the rounds is that half of former smokers have tried e-cigarettes. Meanwhile industry research continues in terms of product improvement (recently the Paris-based company Smokio launched the world's first smart e-cigarette which connects to a smartphone app tracking the owner's usage) with the industry well aware that low perceptions of product quality could have severe regulatory consequences. However the next big game changer for the global vapour industry could be China.

Cigarette Replacement

ten motives 1.jpgInterest in the e-cigarette sector is demonstrated in the level of corporate activity. US Victory Electronic Cigarettes (VEC) recently acquired Ten Motives, its third UK e-cigarette company in six months for US$104m (£62m). Ten Motives sells in a number of major UK retailers including Sainsbury's, Tesco and Bargain Booze. Since its founding, Ten Motives claims to have ‘replaced’ up to 400m regular cigarettes. This statement clearly attempts to position the company in an NRT context, probably with an eye on potential legislation. Victory's previous UK acquisitions include Vapestick for US$70m and VIP for US$50m.

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May 28, 2014

New Tobacco Data - What is it Telling Us?

Zora MilenkovicAnalyst Insight by Zora Milenkovic - Head of Tobacco Research

One of the questions I increasingly find myself fielding is whether the tobacco industry is in terminal decline. The short answer is that it appears to be heading that way. Euromonitor’s latest tobacco data for 2013 shows volume declines for cigarettes of around 4% globally last year, excluding China and also shows two of the largest markets for cigarettes in the world after China – Russia and the US - losing a combined total equivalent to the entire annual sales of Bangladesh in the next five years. Is this a sign of things to come? And are e-cigarettes the answer?

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May 27, 2014

Key Findings in Tobacco for 2014

EMI_cigaretteDecline-v1.0

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Download key highlights from Euromonitor's 2014 Tobacco Research

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Will the FDA Put A Stop to Flavoured Cigar Growth?

Don2Analyst Insight by Don Hedley - Contributing Tobacco Analyst

Euromonitor International data and recent academic surveys indicate there is currently major growth in consumption of small, flavoured cigars and cigarillos in the US (26% CAGR value growth between 2009 and 2013).  The US Food and Drug Administration banned flavours other than menthol in cigarettes in the 2009 Family Smoking Prevention and Tobacco Control Act. One key justification for this was that ‘candy’ flavours were a gateway to young people starting smoking. However, the flavours ban did not extend to cigars, given the lack of FDA oversight of the category, leading to accusations of a legislative loophole. So with the April proposal to extend FDA regulation to small cigars is the loophole likely to be closed? Perhaps, but the same comments have been made about menthol in cigarettes.

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May 26, 2014

Weak Performance in the Global Tobacco Market

The global tobacco market as a whole saw a 4 percent decline in 2013. Part of the reason for this weak performance is ‘impaired volumes’, meaning consumers are buying economy cigarettes, roll-your-own cigarettes or illicitly traded cigarettes, all cheap options that effect value sales of the market as a whole. E-cigarettes on the rise in many countries, but many tobacco companies aren’t ready to pin their hopes on a product that may not be the answer to lagging sales.

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April 24, 2014

Grocery Channels Hard Hit by Hungarian Tobacco Law

Zsofia_MegyeriWith Zsofia Megyeri, Senior Analyst

In 2013, the Hungarian government passed a bill reforming tobacco retailing with the aim of reducing underage smoking and overall smoking prevalence in the country. This law is having a major impact on grocery stores, convenience stores, supermarkets and forecourt retailers, all of which can no longer sell tobacco products. As of July 1 2013, only a limited number of shops branded as “National Tobacco Stores” are allowed to sell tobacco products at fixed prices. At the end of 2013, tobacco sales through modern grocery channels dropped a massive 24 percent, and illicit trade sales are expected to grow from 10 percent at the end of 2013 to 12 percent by 2014.

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February 20, 2014

House of Enablers – Does Anything Now Go For Tobacco Control in the UK?

Shane_MacGuillAnalyst Insight by Shane MacGuill - Tobacco Analyst

After a public debate focusing on the well rehearsed themes of individual liberty and enforceability, on Monday, the UK Parliament adopted amendments to the 2013 Children and Families Bill which outlaw smoking in cars with children, the proxy purchasing of tobacco products for children and which also provide a basis for the statutory introduction of plain packaging in the UK. The greatest heat was generated by the proposal to ban smoking in cars with children - touching as it did on the great libertarian themes of personal responsibility and private space – but in truth the passing of this measure is (to coin the phrase of the week) more symbolic than material and the real significance of the vote lies elsewhere.

The ban on smoking in cars with children does represent the first incursion of the British state into the private spaces of its citizens with regard to tobacco use but beyond jibes about nanny-statism there was little serious appetite on the part of libertarians, and much less (if at any at all) on the part of the tobacco industry to argue for the positive right of people to deliver their kids from the school-run reeking of cigarette smoke.

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February 10, 2014

CVS’s Decision to Stop Selling Tobacco Will Have Minimal Industry Impact

 

CVS Caremark, the second largest pharmacy chain in the US, recently announced it would stop selling tobacco products in October 2014. Shane MacGuill, Tobacco Industry Analyst at Euromonitor, states that outside of a symbolic victory for tobacco control groups, this move will have little impact the tobacco market. Pharmacies only make up about three and a half percent of tobacco sales in the US, and CVS itself was responsible for only two percent of total US tobacco sales in 2012.

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Recent Posts

Smoking Ban in Chile Reduces Cigarette Consumption

Prohibición de fumar en Chile reduce consumo de cigarrillos

Hyper-activity in E- Cigarettes But Are We Heading East...Or West?

New Tobacco Data - What is it Telling Us?

Key Findings in Tobacco for 2014

Will the FDA Put A Stop to Flavoured Cigar Growth?

Weak Performance in the Global Tobacco Market

Grocery Channels Hard Hit by Hungarian Tobacco Law

House of Enablers – Does Anything Now Go For Tobacco Control in the UK?

CVS’s Decision to Stop Selling Tobacco Will Have Minimal Industry Impact