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Summary and extracts
1 Market Overview
1.1 Definition and presentation
A tobacconist , or rather a tobacco shop, is a store that sells tobacco-related products and accessories. Tobacconists have always been, and continue to be, a specialty business, which means that a regular tobacconist must know the skills necessary for any small store, such as inventory and account management, as well as other basic business operations. A tobacco shop sells a variety of tobacco products, including cigarettes. However, some tobacconists choose not to stock mass market brands or even cigarettes, preferring to focus on finer items such as cigars, pipe tobaccos, and snuff.
it's difficult to estimate the amount of monetary value tobacco shops around the world have, but its most valuable product, legal tobacco, has been estimated to be worth about $818 billion in 2019. The largest global tobacco category remains combustible cigarettes. it is estimated that the size of the tobacco market will be worth USD 1,073 billion by 2028 with a CAGR of 1.8%
In Italy, the State has identified tobacconists as the places to exclusively entrust the retail sale of tobacco products; there is a law preventing more than one tobacconist's shop per 1,500 inhabitants. The number of tobacco shops registered in Italy, actively operating in 2017 was 54,319; municipalities with at least one tobacco shop represent about 95% of all Italian municipalities, thus confirming the widespread presence of tobacco shops throughout the country. Tobacconists have been qualified not only in the sale of tobacco but also in the provision of public gaming and community activities such as the payment of taxes and bills. To operate as a tobacconist in Italy, you must first obtain a license and then wait for the authorization according to the territorial distribution present. If you simply want to buy the license, it can cost up to 100,000 euros.
In recent years, the market has undergone important changes accompanied by the development of new product categories, which have also had a strong impact on the activities of operators in the sector. These include the introduction of electric cigarettes, vaporizers and heated tobacco cigarettes, such as the famous "Iqos"brand.
1.2 The world tobacco market
The tobacco plant is used for the production of different derivative products, consumed all over the world. There are several tobacco producing countries, among them we find China, India, Brazil, Zimbabwe, or even Indonesia. Given the great variety of producing countries, the production of the tobacco plant is very important, with ...
1.3 Domestic tobacco production
Domestic tobacco production over the past decade was as follows:
Tobacco production turnover Italy, ****-****, in millions of euros Source: ****
The data in the graph above show that the Italian tobacco industry production has varied greatly over the period considered: while in **** annual production was around *** million euros, in **** it sank ...
1.4 Tobacco trade flows
In this part, the Italian trade flows generated by the tobacco market will be analyzed. The UN Comtrade code used is ****: "Tobacco, unprocessed, tobacco residues".
In ****, the value of Italian tobacco exports was $*.* billion, the value of exports of cigarettes containing tobacco on the other hand is much lower, with $*.* million ...
2 Demand Analysis
2.1 The profile of the Italian smoker
There are **.* million smokers in Italy, representing **% of the populationin ****. [***] The latest revelations from Istat surveys allow us to create a "typical profile" of the Italian smoker. The following two graphs show the habits of Italians regarding cigarette smoking by age group. It will then be easier to draw a "typical ...
2.2 Italians' spending on tobacco
In Italy, the population in **** spent as much as *.** billion euros on tobacco product purchases (***). The geographic breakdown of spending is as follows:
The map above shows the Italian regions where tobacco spending is highest. Data are shown based on monthly expenditures per smoking inhabitant of the region. There are two ...
2.3 Best-selling tobacco products
The products composed of tobacco present and most popular in the Italian market are:
Cigarettes The snuff The shreds Cigars Cigarettes Inhalation products
In ****, the top selling products were:
Tobacco product sales Italy, ****, in % Source: ****
The chart below shows the three most popular and best-selling products in the Italian tobacco market. ...
2.4 Very young smokers
A survey conducted in **** by GYTS on youth tobacco habits presents conclusions on the relationship of **-** year olds with products containing tobacco. On the other hand, a study carried out by HBSC is interested in the cigarette smoking of very young people (***) and on their frequency of smoking. Regarding HBSC's ...
3 Market Structure
3.1 Leading tobacco companies
The global market for distribution of products with tobacco is very uncompetitive, because there are already a few giants in the market, so it is very difficult to enter as a new player. The leading companies in the industry in **** recorded the following turnover:
Leading tobacco companies World, ****, in billions of ...
3.2 The Italian territory: cultivatable areas for tobacco
Tobacco cultivation in Italy has decreased drastically since the beginning of the millennium:
National arable area of tobacco Italy, ****-****, in thousands of ha Source: ****
The graph above shows the cultivable area in hectares on the Italian territory. From **** to ****, the country went from almost ** thousand cultivable hectares to **.* thousand hectares ...
3.3 The tobacco distribution network
The Italian distribution network of products containing tobacco corresponds to the trade phase of the tobacco market. In fact, once tobacco leaves have been grown, harvested and processed, they are then marketed. The distribution of products in Italy takes place through a logistics system divided as follows:
* territorial deposits: **% coming ...
4 Analysis of the offer
4.1 The prices of tobacco products
In Italy every year there are ** million customers per day who purchase products containing tobacco. The products of that contain tobacco have already been mentioned during this study, in part *. The most popular are:
Cigarettes Cigars Inhalation tobacco Cigarillos Cut Tobacco
The prices charged by the market for some of these ...
4.2 Illicit trade in tobacco
There is an illicit traffic of cigarettes containing tobacco, this is not based on the composition of cigarettes with illicit substances, but on the origin of the product. In fact, the rules of certain countries, especially in the European Union, are much tighter and stricter than in other countries.
In Italy, ...
4.3 A new trend: the electronic cigarette
A study by Intellegit published in **** is interested in the evolution of electronic cigarette use. This product is relatively new, and appeared in the Italian market in ****. In fact, only * out of ** consumers have been using electronic cigarettes for more than * years.
Answers to the question: "How long have you been ...
5 Regulation
5.1 European regulation
Governments' updating of tobacco legislation aims to raise awareness of reducing their smoking consumption, protect the non-smoking population from second-hand smoking, and support cessation efforts.
The new European directive Directive **/****/EU (***), on the processing, presentation and sale of tobacco and related products, led to the issuance of Legislative Decree No. * of ...
5.2 The national regulatory framework
The national regulations regarding tobacco analyzed in this part concern the consumption of products containing tobacco. Thus, all products that are smoked. For this reason, the Italian framework has a tendency to protect non-smokers. This is done with the following provisions:
Law No. *** of November **, ****, regarding the prohibition of smoking in ...
6 Positioning of actors
6.1 Actor segmentation
- Philip Morris International
- Imperial Brands
- Japan Tobacco
- British American Tobacco
- Kumulus Vape
List of charts presented in this market study
- Smokers by age group
- Number of cigarettes smoked per day by age group
- Distribution of smokers by gender
- Answers to the question, "How long have you been using e-cigarettes?
- Electronic cigarette users
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Latest news
Japan Tobacco strengthens its position in the United States with the acquisition of Vector Group - 22/08/2024
- - Global tobacco market: projected worldwide sales of $965 billion in 2024, with an annual growth rate of 2.6% over five years
- - Value of Japan Tobacco's acquisition of Vector Group: $2.4 billion
- - Increase in Japan Tobacco's U.S. market share from 2.3% to around 8%
- - Vector Group net profit in 2023: $183.5 million
- - Vector Group sales in 2023: $1.42 billion
- - Objective of acquisition: to strengthen Japan Tobacco's presence in the United States and to invest in heated tobacco
- - Expected increase in Japan Tobacco's spending on heated tobacco: at least 50%
- - Japan Tobacco's market share in Russia: close to 35%
Closure of cigarette plant in Corsica - 03/10/2023
- The Furiani cigarette factory in Haute-Corse, owned by the British Imperial Brands group, will cease production by the end of this year.
- The plant produces 600 million cigarettes a year for local and national markets.
- 29 employees will remain at the plant, compared with over 200 in the past.
- Corsica's special tobacco tax will disappear at the end of 2025.
- The closure follows an overall and continuing decline in legal sales volumes, which are being replaced by smuggling and counterfeiting.
Several tobacco companies are banking on this product invented in Scandinavia. - 31/07/2023
- The Velo brand nicotine sachet is held between the upper lip and gum for around thirty minutes, for a gradual release of nicotine.
- British American Tobacco (BAT), which already markets the nicotine sachets in a dozen European countries, launched the brand in France after a conclusive test.
- Since the beginning of the year, BAT's range has been available in a quarter of French tobacconists and on their website.
- The sale of Velo nicotine sachets will be banned in Belgium from October 1.
- There are several dozen brands of nicotine sachets sold in France, most of them imported.
- These new product categories now account for 15% of BAT's business.
- Philip Morris expects tobacco alternatives to account for half its sales by 2025, compared with one-third today.
- The global nicotine sachet market, valued at $2 billion in 2020, is predicted to grow by over 30% a year between now and 2030.
Tobacco giants face cigarette decline - 13/05/2023
- In 2020, 17% of the world's population were smokers, compared with almost 27% in 2000
- a further decline is expected, to 15.4% by 2025.
- Cigarette sales volumes have fallen from 5,800 billion in 2007 to 4,700 billion in 2020, and are expected to drop to 4,500 billion by 2025.
- One third of Philip Morris International's (PMI) revenues come from alternatives to cigarettes, with the share expected to rise to 50% by 2025.
- New product categories account for 14.8% of business at BAT (Lucky Strike, Vogue...) and less than 5% at JTI (Winston, Camel...).
- Cigarette manufacturers hold just 15% of the French vape market.
- At PMI, 79% of profits still come from cigarettes.
- Emerging markets such as China, Indonesia, Turkey and Russia remain attractive to tobacco companies.
The success of Iqos, an alternative tobacco, depends on the goodwill of regulators. - 26/11/2022
- Iqos heating tobacco brand from Philip Morris International
- 19.5 million consumers in 68 countries
- 7.6% market share
- PMI has invested $9 billion to develop its tobacco alternatives
- In mid-2020, PMI obtained approval from the U.S. Food and Drug Administration (FDA) to sell its brand of smoking tobacco and its brand of communicating tobacco
- In Japan, where it was launched in 2016, its market share is close to 25%
The parallel tobacco market has exploded in France since the start of the Covid-19 pandemic. - 23/06/2022
- Sales of untaxed cigarettes reached a record high in France in 2021, accounting for 35% of total consumption, a jump of 5 points in one year.
- The bulk (29%) is illicit and comes from smuggling and counterfeiting.
- Smugglers have increased their cigarette production capacity (Meaux plant) to take advantage of the pandemic
- In 2021, tobacconists' sales fell by 6%, but cigarette consumption rose by 1.6%
- Smoking rates in the UK have fallen from 25% to 12% in ten years
- More than one French person in four smokes every day
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