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December 18, 2014

Cuba: Key Market of the Future

EMI_Cuba-v1.2

Cuba is identified as one of the 20 Markets of the Future that will offer the most opportunities for consumer goods companies. Accelerating market liberalization and improvement of business environment is anticipated to boost employment and income growth, resulting in a sizeable increase in consumer expenditure by 2020. Alcoholic drinks is projected to become the largest consumer market over the forecast period, with spirits and beer being the most promising categories.

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Diplomatic Normalisation Promises Cuban Evolution for US Cigar Market

Shane_MacGuillAnalyst Insight by Shane MacGuill - Tobacco Analyst

The almost total thawing out of diplomatic relations between the US and Cuba, announced yesterday, 17th December by President Barack Obama, could lead to the smouldering of Cuban cigars from coast to coast in the US$8 billion dollar US cigar market. The biggest winners from the relaxing of the trade embargo with Cuba are likely to be Imperial Tobacco plc, the world’s 4th largest international tobacco company and part owner, with the Cuban government of the state cigar company Corporacion Habanos and the US tobacco specialist stores which currently supply around 40% of the country’s cigars and through which high price point Cuban offerings will largely be distributed.

Imperial Tobacco inherited  a 50% holding in the Cuban state cigar company Corporacion Habanos through its purchase of the French-Spanish tobacco giant Altadis in 2007. It is thought that the company, which distributes the Cohiba and Montecristo premium cigar brands outside the US and non-Cuban brands such as Romeo y Julieta within it, has been anticipating the relaxation of the trade embargo for some time and has plans to ramp up production by 50% to meet increased demand. However, in an analyst briefing in November 2014, Imperial CEO Alison Cooper made reference to some supply issues in Cuba which may or may not impact this target:

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November 27, 2014

Assessing the Illicit Trade in Cigarettes and Foreseeing One in Nicotine Liquid

Shane_MacGuillAnalyst Insight by Shane MacGuill - Senior Tobacco Analyst

Euromonitor’s latest global briefing on the illicit trade in tobacco products assesses the nature, impact and logistics of the 570 billion stick, US$39 billion global market in illicit cigarettes. It outlines how the illicit trade in cigarettes, while often seen as, if not a victimless crime, a misdemeanor which the victims (arrogant tobacco conglomerates and capricious governments) deserve, is in fact a phenomenon which damages the best interests of a range of public and private organisations, including its consumers.

Eliquid.pngWhile price is of course the infamous key determinant of demand for illicit products one of the enabling factors discussed in the report is the existence of constraining regulation which creates absences in the legal market. An example of this is the potential for increase in illicit trade from the forthcoming ban on menthol cigarette products in the European Union’s Tobacco Products Directive. However, the report goes on to look at the existing and potential de facto illicit trade in electronic cigarettes rooted in restrictive regulation, in particular of nicotine liquid.

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November 25, 2014

India Planning Outright Ban on E-Cigarette Products

Shane_MacGuillAnalyst Insight by Shane Mac Guill - Senior Tobacco Analyst

An unfortunate trend to the radical regulation of e-cigarettes progressed further today as Reuters reports that the Indian government is considering a total ban on the products. We have written recently on the WHO’s flawed policy stance on e-cigarettes, which fed into a policy position from the 6th Conference of the Parties to the FCTC in Moscow in mid-October, leaving open the option of bans for the products. It is in this prohibitionist context that the proposed measures in India need to be viewed. 

Eon.pngWhile smoking prevalence in India, because of the pervasive use of smokeless tobacco products is relatively low at 6.5%, the sheer size of the population means that there are 52 Indian million smokers, the 3rd largest global smoking population behind China and Indonesia. In total there are some 275 million tobacco consumers in India and the Indian government has been proactively seeking to control all forms of tobacco consumption in the country.

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November 23, 2014

International Business Provides Moderate Positives in Japan Tobacco Interim Results

Shane_MacGuillAnalyst Insight by Shane Mac Guill - Senior Tobacco Analyst

In the context of elevated levels of domestic competition and contractions in some of its major international markets, Japan Tobacco’s results for the quarter and year up to September 2014, released on the 30th of October were broadly positive albeit in so far as significant volume decline can ever be so described. The results clearly indicate the impact of excise increases in Japan, the company’s reliance on Russia and the trend to lower value products in many markets, also referenced by both BAT and Imperial in recent results.

Domestic struggles 

It is testament to the continuing decline in importance to the company of its domestic market that a set of group results, of which a 10% volume decline in Japan formed a part, can still be characterised as positive. An overarching industry contraction in Japan prompted by the April 2014 excise hike and a tough competitive environment in which JT is having to graft for every basis point of share contributed to a 10% sales volume decline between April and September 2014. Difficult pricing meant that the company had to rely on cost reduction to marginally mitigate volume loss to just over 7% operating profit decline.

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November 22, 2014

Heat-not-Burn Launches Open a New Front for the Future of Tobacco

Shane_MacGuillAnalyst Insight by Shane Mac Guill - Senior Tobacco Analyst

One of the central plotlines for the tobacco industry in 2015 will be the evolution of large manufacturer responses to the steadily increasing prevalence of e-cigarettes and their efforts to wrestle back control of the future incarnation of the cigarette. This week had the feeling of a watershed moment in that ongoing narrative as the potential silver bullet for tobacco manufacturers, heat-not-burn technology, took a further step into the minds and mouths of consumers with major announcements from Philip Morris International on its iQOS platform and Reynolds American on the launch of a specific heat-not-burn brand, Revo.

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November 21, 2014

Swedish Match Evokes World Without Cigarettes in 3Q Results

Don2Analyst Insight by Don Hedley - Contributing Analyst

In its third quarter report Swedish Match announced a new corporate vision - ‘A world without cigarettes’.  Entry into this brave new world is enabled by the availability of products ‘recognised as safer alternatives to cigarettes’.  As a non combustible tobacco product snus may be unofficially be so regarded but officially this product is lumped together with cigarettes in terms of dire health warnings.  The company is currently seeking to change this situation having submitted a lorry load of data aimed at refuting two of the health warnings compulsorily carried by its products in the US.

How this turns out will be of great significance for the global moist snuff business: a positive result would also help in Sweden’s ongoing crusade to get the EU oral snuff ban lifted. Meanwhile the obvious question is whether current progress of Swedish Match’s oral snuff products and particularly snus, and the performance of smokeless tobacco in general, justifies its vision of a world without cigarettes.

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November 19, 2014

What’s Happening in Tobacco – October 2014

Don2Analyst Insight by Don Hedley - Contributing Tobacco Analyst

…Numbers trying e-cigs ‘levelling off’ in US… Asian customers switching to economy brands according to JTI… WTO postpones plain packaging complaints judgment… Swisher International to acquire Drew Estate Tobacco…PMI seeks pay per puff patent…Special consumption tax to be raised in Vietnam… PMI’s first reduced risk product factory starts up in Italy… Santa Fe Natural Tobacco outperforms for RAI… Swedish Match reports best growth in cigars and chewing tobacco rather than snus in 3q… PMI reports lower outswitching to OTP in EU in 3q results… Research suggest E-cigarette may be smoking gateway in Poland… Majority want e-cig public usage ban in UK… FCTC supports e-cig marketing restrictions ….Public smoking ban to be extended in Macau…80% coverage health warnings on packs decreed… Regulations to further restrict flavoured cigars in Canada to be introduced… Florida jury awards smoker US$ 41.1 million damages

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September 11, 2014

The Impact of the Indian Budget on Consumer Goods and Services

Euroindia_Shreyansh.Kocheri_LThumbHosted by Shreyansh Kocheri, Research Analyst

The Union Budget of India for 2014-2015, presented on July 10 has an impact on almost every area of consumer goods and services in the country. Research analysts from Euromonitor International’s office in Bangalore, India respond to the budget in this podcast series.

 

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 Featuring:  Shabori Das - Research Analyst, Ina Dawer, - Senior Research Analyst, Manjunath Reddy - Research Analyst and Priyanshu Rana - Reseach Analyst

Introduction to the Big Indian Budget (mp3)

The Indian Budget's Impact on the Tobacco Market (mp3)

The Indian Budget's Impact on Internet Retailing (mp3)

The Indian Budget's Impact on Consumer Electronics (mp3)

The Indian Budget's Impact on Consumer Finance (mp3

The Indian Budget's Impact on Food and Beverages (mp3)

The Indian Budget's Impact on Travel and Tourism (mp3)

The Indian Budget's Impact on Apparel and Footwear (mp3)

August 13, 2014

5 Key Findings in the Tobacco Market

Euromonitor International recently released new data for our Passport: Tobacco research database. Watch the video to find out five key findings we uncovered in our research.

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Recent Posts

Cuba: Key Market of the Future

Diplomatic Normalisation Promises Cuban Evolution for US Cigar Market

Assessing the Illicit Trade in Cigarettes and Foreseeing One in Nicotine Liquid

India Planning Outright Ban on E-Cigarette Products

International Business Provides Moderate Positives in Japan Tobacco Interim Results

Heat-not-Burn Launches Open a New Front for the Future of Tobacco

Swedish Match Evokes World Without Cigarettes in 3Q Results

What’s Happening in Tobacco – October 2014

The Impact of the Indian Budget on Consumer Goods and Services

5 Key Findings in the Tobacco Market