Name: the tobacco market
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Summary

The global and French tobacco markets are experiencing significant shifts, with regulatory measures and changing public attitudes driving a decline in traditional tobacco consumption. Specifically in France, despite the tobacco market generating €18.9 billion in value, the volume of sales has been consistently decreasing, with 46 thousand tonnes of cigarettes sold in 2020, dropping to 31.7 billion units by 2022. These reductions are aligned with stringent policies such as the Loi Evin and the healthcare system modernization law which introduced plain packaging and stronger health warnings. Additionally, rising tobacco prices have likely contributed to the decline in tobacco use, with cigarette prices increasing by 85.8%, and roll-your-own tobacco prices rising by 189.3%.

The tightening of cigarette import and export values reflects these market dynamics, as imports decreased from $1,882.1 million to $1,570.7 million, and exports grew marginally from $333.8 million in 2020 to $410.6 million in 2022. Meanwhile, the electronic cigarette market has been gaining traction, perceived as less harmful than traditional tobacco and pegged to reach 1.2 billion euros in size. Amidst these changes, the industry is heavily regulated: French Customs oversee retail sales and tobacconist management, with taxes representing roughly 80% of cigarette retail price. The global tobacco market is led by major corporations like Philip Morris and British American Tobacco, and in France, tobacconists have seen their numbers decline from 28,000 to 23,500, indicating consolidation within the retail segment.

Declining Smoking Prevalences Amid Strict Regulations: A Look into France's Tobacco Market Trends

Tobacco consumption in France has been experiencing significant changes due to a convergence of public health initiatives and evolving social attitudes. Despite the comprehensive nature of the market, which includes products like cigarettes, cigars, and newer forms such as electronic cigarettes, demand has seen a consistent downturn. Among the French population, the prevalence of daily smoking has seen an oscillating yet overall decline. Typically, the percentage of daily male smokers was around the low 30s percent and has decreased to the high 20s percent by 2021. For female smokers, the numbers slightly increased from the low to mid-20s percent before following a downward trend to around the low 20s percent by 2021.

As such, among individuals aged 18-75, the proportion of daily smokers diminished to nearly 25 percent by 2021. Regional disparities in smoking rates are evident within the country, with Provence-Alpes-Côte-D'azur, Hauts de France, and Occitanie witnessing some of the highest figures. In contrast, Ile de France, Pays de la Loire, and Normandy are regions with the lowest smoking rates. An analysis of smoker profiles reveals notable distinctions across various demographics. Men in the 25-34 age group and women in the 18-24 age group are most likely to be daily smokers. There's a noticeable dip in smoking rates with advancing age, particularly among women. Additionally, education level and employment status influence smoking habits, with those possessing less education and those unemployed showing a higher likelihood of being daily smokers.

A substantial segment of daily smokers have expressed a desire to quit, prompting an increase in sales of smoking cessation treatments such as oral medications and transdermal patches. Legislative measures have also played a role in diminishing tobacco consumption. The price increase on a pack of cigarettes, for example, correlates with a reduction in demand, with higher prices and stricter regulations diminishing sales volumes significantly. While cigarettes remain the dominant tobacco product in France, the electronic cigarette market is growing, viewed by many as a less dangerous alternative to traditional tobacco. Its perceived reduced harm, along with its potential as a smoking cessation aid, is steering some consumers away from conventional smoking products, which may impact the tobacco industry further.

In conclusion, France's tobacco market is witnessing a transformation, influenced by decreasing smoking rates and heightened legislative actions.

Key Players Shaping the Tobacco Market Landscape

While the tobacco market is a complex and tightly regulated industry, it is heavily influenced by a few significant players that dominate the scene. Here's a look at these pivotal companies steering the market, each with its footprint and strategic maneuvers.

Philip Morris International (France): As a subsidiary of one of the world's leading tobacco companies, Philip Morris in France carries the weight of its global brand. Known for its flagship product Marlboro, the company has a profound influence on market trends and consumer preferences, consistently anchoring its position at the forefront of the industry.
Imperial Brands: This British multinational tobacco company, which came into being over a century ago, has developed a powerful portfolio of products and brands. Imperial Brands has a wide geographic footprint with products sold in over 160 countries and is known for driving innovation within the market.
Japan Tobacco: With roots in the Japanese tobacco market, Japan Tobacco International has expanded its reach globally. Holding some of the fastest-growing international brands under its umbrella, the company's international arm has made a notable impact through strategic acquisitions and expansion policies.
British American Tobacco: As another heavyweight in the industry, British American Tobacco operates across a multitude of countries. The company has been prominent in aligning its business strategies with market shifts, investing in reduced-risk products to cater to evolving consumer demands.
China National Tobacco Corporation: Standing as the largest tobacco company globally when considering the sheer size of the domestic market it controls, this state-owned enterprise underlines the significance of government-backed players in the sector. While less known on the international stage, its monopoly within China marks it as a critical player to watch.

With these market behemoths at play, the tobacco industry continues to evolve, shaped by their strategies and the regulatory frameworks they navigate. The interplay between their ubiquitous traditional products and forays into alternative niches, such as electronic cigarettes and other nicotine delivery systems, underscores a dynamic market responding to both public health pressures and consumer trends.

the tobacco market - France

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Number of pages : 30 pages
Format : Digital and PDF versions
Last update : 11/11/2023

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Summary and extracts

1 Market overview

2 Demand analysis

3 Market structure

4 Regulations

5 Positioning the players

List of charts

Prevalence of daily smoking by sex among 18-75 year-olds
Prevalence of daily smoking among 18-75 year-olds by region
Prevalence of daily smoking by level of education
Share of smokers in the population by age and sex
Prevalence of daily smoking by monthly income per consumption unit
Prevalence of daily smoking among 18-75 year-olds by employment status
Daily smokers wishing to quit
Sales of smoking cessation treatments
Cigarette sales and price per pack of the best-selling brand
World tobacco production
Ranking of the largest tobacco-producing countries
Tobacco and cigarette sales
Volumes of tobacco seizures by Customs
Top tobacco companies by total sales
Share of sales by volume of the main tobacco products sold
Breakdown of the price of a €10 pack of 20 cigarettes on January 1, 2021
Change in the price of the best-selling pack of cigarettes and roll-your-own tobacco
"On a scale of 1 to 10, how would you rate the dangerousness of these products?"
Value of imports of tobacco and tobacco products
Value of exports of tobacco and tobacco products
Main tobacco-supplying countries
Main tobacco export partner countries
Number of tobacconists
Breakdown of tobacconists by town size
Tobacconists by activity in addition to tobacco
Tobacco sales by network

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Latest news

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.

Tobacco: Logista France downsizes - 07/03/2023

Tobacco distributor Logista France , subsidiary of the Spanish Logista Group
Sales of tobacco and new-generation products such as electronic cigarettes to fall by 3.9% by 2022
Activity of Toulouse depot, which serves 4,500 tobacconists in Occitanie and Nouvelle-Aquitaine, to be transferred to Mions and Le Mans
Logista transports tobacco from factories in Northern and Eastern Europe to its warehouses
It prepares orders, and carriers deliver to France's 23,500 tobacconists
It also has 29 convenience stores where tobacconists stock up themselves

Altria spends US$2.75 billion on Njoy electronic cigarettes. - 07/03/2023

Takeover of e-cigarette manufacturer Njoy
Altria has exchanged its 35% stake in Juul, for which it paid $12.8 billion at the end of 2018, for the right to use some of its technologies on heated tobacco devices.
Juul once enjoyed phenomenal success with its USB-key-shaped vaporettes
Regulatory uncertainties over the future of e-cigarettes in the United States
Altria estimates that its stake was worth only $250 million

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%

Companies quoted in this study

This study contains a complete overview of the companies in the market, with the latest figures and news for each company. :

Philip Morris International

Imperial Brands

Japan Tobacco

British American Tobacco

Altria (Philip Morris USA, Malboro)

Logista France (Altria)

Altadis (Imperial tobacco)

Arnold André

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