Euromonitor’s latest insight on the Tobacco industry

World Tobacco

Euromonitor International‘s latest global Tobacco market research provides the latest insight on how the Tobacco industry performed in 2012 and identifies the key prospects through to 2017. The double whammy of continued global economic uncertainty and increasing tobacco control took its toll as the industry posted a year of weak growth, in which no region experienced volume increases with the solitary exception of Asia Pacific, itself bolstered by the cigarettes behemoth that is China. World cigarettes values, normally propelled by growing unit prices and consumer uptrading, also took a battering, unprecedentedly growing by the same amount as global illicit trade volumes. With the current debate surrounding the reduced risk credentials of non-combustible products such as electronic cigarettes and their classification (pharma vs tobacco), the industry finds itself at a crossroads, pursuing cigarette alternatives whilst maintaining its cash cow.

  • Worldwide, 5.8 trillion cigarettes were consumed in 2012, representing 0.19% growth on the previous year, though this was due to the effect of the world’s largest cigarettes market, China. Without China, the world witnessed a -1.7% decline in 2012 versus 2011.
  • Every region in the world, save for Asia Pacific, saw falls in cigarettes volume sales in 2012 (vs 2011), a decline expected to continue to 2017, with the sole exception of Middle East & Africa, which is expected to return to growth once political turmoil stabilises.
  • None of the BRIC markets registered cigarettes volume growth in 2012 (with the sole exception of China), a trend which will continue into 2017.
  • World cigarette value sales grew by almost the same amount in 2012 as global illicit trade volumes – at around 2.5% each. Values decreased in three regions – Western Europe, North America and Latin America – reflecting consumer down-trading.
  • Sales of premium cigarettes grew by nearly 10% globally in 2012, on the back of China’s double-digit premium growth, though this will not be sustained at the global level in the long term. For whilst China will grow its premium brands by nearly 30% over the next five years to 2017, world premium sales will register a 5% fall.
  • World RYO volumes conversely grew by 6% in 2012 (vs 2011), registering growth in all regions, particularly Eastern Europe where it saw double-digit growth. Growth will continue to 2017, albeit at a declining rate.
  • Sales of cigars and smokeless tobacco both saw volume declines of around 3% in 2012, affected by a combination of poor economic performance and declines in its major markets.

Source: Euromonitor International

South Africa Now the Major Export Market for Zim Tobacco

Zimbabwean auctioneers selling tobacco

Zimbabwean auctioneers selling tobacco

This should bring happiness to the local Ministry of Health.

South Africa has displaced China as the dominant export market for Zimbabwean tobacco, reports the Tobacco Industry and Marketing Board. Information from the TIMB indicates that as at February 27, South Africa maintained the top position having bought 7,5 million kilogrammes of the golden leaf valued at US$22,8 million.

The tobacco was sold at an average price of US$3,02 per kilogramme. South Africa has been dominating the regional market. The country has since overtaken China, which has dropped to third position. The United Arab Emirates occupies second spot having maintained its place among the top buyers of the golden leaf.

The top five tobacco export markets for Zimbabwe’s tobacco are South Africa, UAE, China, Hong Kong and Sudan. Last year, China, Belgium, Indonesia, South Africa and Russia were among the top five during the same period. Zimbabwe has so far earned US$82 million from tobacco exports to different destinations. The country produces tobacco and exports semi-processed leaf.

Japan is offering the highest price for tobacco at US$10, 03 per kilogramme, followed by China offering US$9,20 per kilogramme and India offering US$8,86 per kilogramme. In 2012, agriculture grew by 4,6 percent with tobacco being the main component behind this growth. The crop accounted for 10,7 percent of the GDP in 2012 and constituted 21,8 percent of all total exports, compared to 9,2 percent for other agriculture commodities. This compares favourably with the 61,1 percent contribution by all minerals combined.

The economic benefits of tobacco are expected to increase in view of more and more growers increasing their production or, diversifying or switching to the crop. Source: AllAfrica.com

Inside track to the local Tobacco ‘Cabal’

Peter Tell-AllWith much international focus on tobacco and tobacco products its great to read something outside of the mainstream media. Evidently this guy has some real insight in the tobacco industry and he sure is passionate about his views. This is a fine example of ‘Social Media’ providing what your average Google search-and-hit will never reveal. Conspiracy theory or not, this is a site dedicated to one thing – exposing the ‘Anglo-American tobacco cabal’. Aptly titled “All Disclosed by Peter Tell(all)” he invites you………

…………… to browse, interact and explore my website dedicated to the exposure of facts, truths and the responsible sharing of the information contained within these pages, about South Africa’s Tobacco Industry! The compilation of articles and also unpublished fact sheets about how this very lucrative and secretive industry operates has up until now been a very dark and well-kept secret! Why would all this information be kept from us? Why would they not want us to know how much money is being made? Why does the Government play both sides of the fence? Who pulls the strings of the authorities? THESE ARE THE QUESTIONS WE SHOULD BE ASKING!!

Tobacco in South Africa

smoke-cigaretteCigarette volume sales increase in 2011 – Retail volume sales grew by 1% in 2011, following declines throughout the review period. Retail value sales grew significantly due to a general price increase to cater for taxation increases, as well as rising production costs for manufacturers.

Porous borders continue to influence the growth of illicit cigarette sales – Volume sales of illicit cigarettes continued to grow during 2011, despite efforts by the police and tobacco industry stakeholders to combat illicit trade. Porous borders have been identified as the key factor behind the rise in the amount of illegal cigarettes being smuggled into the country. The Beitbridge border post between South Africa and Zimbabwe was identified as the main point of entry for illicit cigarettes from Zimbabwe.

High import duties restrict the growth of the cigars category – The performance of the cigars category remains suppressed due to high import duties on all cigars. The unit price on most cigars increased significantly in 2011 to accommodate import duty increases. Local distributors were reluctant to import new cigar brands due to a low turnover for existing brands. Consumption of cigars declined in 2011 due to higher unit prices for leading brands, with only festive seasons seeing some respite.

Consumers continue to favour buying tobacco products from supermarkets – The supermarkets channel remains the major point of access for most tobacco products in South Africa. Supermarkets tend to sell tobacco products at relatively low profit margins when contrasted with other channels, such as tobacco specialists. With the rising cost of living, smokers still prefer to use supermarkets to buy tobacco products due to the lower prices.

Retail volume sales expected to decline over the forecast period – Slower but relatively stable growth is expected for retail plus illicit volume sales over the forecast period, however retail sales alone are expected to decline. Category performance is expected to be restricted by legislative restrictions, such as a ban on the advertising of tobacco products in any way other than at points of sale. The Government of South Africa is also considering a total ban on the display of tobacco products at points of sale. Thus, retail volumes are expected to decline, while illicit sales will continue to rise during the forecast period.

For a meagre sum of US$1,900 why not purchase the full report Discover the latest market trends and uncover sources of future market growth for the Tobacco industry in South Africa with research from Euromonitor‘s team of in-country analysts. Find hidden opportunities in the most current research data available, understand competitive threats with detailed market analysis, and plan your corporate strategy with expert qualitative analysis and growth projections. If you’re in the Tobacco industry in South Africa, this research will save time and money, empowering informed, profitable decisions – so the blah says.

Source: Euromonitor.com

African countries top tobacco exports

African countries have taken up a combined 43 percent of tobacco exports with South Africa topping the list, the Tobacco Industry and Marketing Board has said. This is an increase from the same period last year when African countries consumed only 18 percent of the total exports. Latest statistics from TIMB show that current seasonal tobacco exports to the Far East rose by 4 percent from last season’s 26 percent.

The increase in exports has been attributed to improved exports in China. The Middle East, which used to take more than 15 percent of total tobacco exports, made a huge slump to 2 percent in March this year.According to TIMB, this is a result of an 81 percent decrease in exports to the region. United Arab Emirates is the major player in the region with current monthly imports pegged at 133 000kgs.The UAE consumes cutrag tobacco, which has firmed up both in volume and price over the past two years.

Exports to the European Union have decreased from 36 percent to 18 percent. As at April 13, South Africa had imported 2,4 million kg of tobacco worth US$7,5 million from Zimbabwe at an average price of US$3,16 per kg followed by China which bought 2,3million kg at US$US$6,35 per kg and Belgium 1,6million kg at US$1,43 per kg.

Hong Kong was offering the highest price buying 415 800 kg of tobacco at US$6,70 per kg.Countries also offering high prices were Poland US$6,62 per kg, and Azerbaijan which bought 19 800kg at US$6 per kg. Zimbabwe exports tobacco to African countries which include Mozambique, Angola, Kenya, Congo, Malawi, Tanzania and Lesotho.

Tobacco stocks on hand are expected to go up as a result of increased stocks from the current crop.Flue cured tobacco imports remained stagnant at 515 152kg at an average price of US$2,70 per kg.

However, seasonal import permits issued increased to almost 12 million kgs as a result of authorisation granted to import 11 million kgs of tobacco. Tobacco production has been on the increase due to the favourable prices being offered on the market. The land reform programme has also contributed towards the increase in production with more than 80 percent of tobacco producers coming from the A1 and small-scale sectors. Source: The Herald (Zimbabwe).

For related information visit: All you need to know about Tobacco