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Summary of our market study
French tobacconists' market estimated at €1.5 billion
The global tobacco market, worth around $785 billion, is facing a decline in tobacco consumption.
Consumption trends in the French tobacco and related products market
The French market is in decline, a trend accentuated by the Covid-19 pandemic. Government health policies and anti-smoking measures, combined with annual increases in tobacco prices, have led to a steady decline in tobacco consumption. The introduction of plain packaging, awareness campaigns and the annual "tobacco-free month" have reinforced this trend.
The tobacconist network, comprising some 24,000 outlets, is the most extensive network of local shops in France. These stores play a crucial role in local economies and communities, often diversifying into sports betting, lottery, postal and relay services.
In the sports betting sector (horse racing and betting on soccer matches), tobacconists receive commissions of around 1.6 to 1.9% on bets placed through them. On sales of lottery games and scratch cards, La Française des Jeux offers them a commission of 5%. However, their position is being challenged by young consumers' growing preference for digital gaming platforms.
The French state receives a significant share of tobacco revenues, estimated at over 80% of total tobacco revenues, or between 15 and 20 billion euros a year, which feed the Social Security budget. This heavy taxation has pushed the average price of a pack of cigarettes well above 10 euros, making France one of the most expensive countries in the world for tobacco.
Rising prices have encouraged cross-border purchases, and today almost one in five French smokers buys cigarettes abroad. The preferred destinations for these purchases are neighboring countries such as Spain, Germany, Luxembourg and Belgium.
Another notable trend is the boom in electronic cigarettes, whose market value has increased 24-fold in six years. This boom has led tobacconists to expand their product ranges to include a variety of e-cigarette devices and e-liquids, a segment in which they face competition from specialist vape stores. France is a major consumer and producer of e-cigarettes
Players in the tobacconist's market
China National Tobacco Corporation:
Its dominance is strictly in the Chinese market, which is the world's leading tobacco producer, suggesting an inward-looking strategy with a massive local consumer base with a colossal 44.0% market share by volume, according to 2016 data from Jefferies
British American Tobacco:
The global giant A name that resonates around the world, British American Tobacco has established itself as a leader in the tobacco industry. Known for its extensive portfolio of conventional cigarettes, the company is a key player in a market worth nearly $785 billion, with a large part of its revenues coming from these products consumed worldwide.
Innovators in electronic cigarettes:
French brands like VDLV and Alfaliquid have carved out a strong reputation in France and abroad. Vape-shops such as Petit Vapoteur and e-commerce sites such as Cigarette Elec take a significant share of the market.
La Française des Jeux (FDJ):
A gambling company Sports betting and gambling activities are also intertwined in the French tobacconist market, with La Française des Jeux (FDJ) at the forefront. FDJ accounts for a significant share of tobacconists' revenues, thanks to commissions on betting and scratch card sales.
Sports gaming
Platforms such as Unibet, Winamax and Betclic are increasing competitive pressure. They compete with PMU and the various games and lottos distributed by tobacconists
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Summary and extracts
1 Market overview
1.1 Definition and scope of study
A tobacconist is a convenience store open more than 10 hours a day in France, 6 or 7 days a week: it is either a tobacco bar, a multi-service village shop, or a press and games distributor. It is estimated that there are now nearly 25,000 points of sale in France, making tobacconists the most popular in the country convenience store leaders in France. So-called "buralistes" must have a licence authorising them to sell tobacco products in France. Tobacconists are trying to integrate the tobacco value chain in France, including the creation by the Confédération des Buralistes of their own brand of cigarettes in 2017 'LCB' ("La Cigarette du Buraliste") to compete with the tobacco giants in France with low prices
The social usefulness of tobacconists, as suppliers of basic necessities and creators of social links, was reaffirmed during the covid-19 crisis, when sales by professionals increased.
In France, the price of a packet of cigarettes has reached the 10€ mark in 2020, which has led to an reduction in consumption . There has been a decline in smoking in France since 2010, which has accelerated in recent years. In addition, as the electronic cigarette market is gradually replacing the traditional tobacco market, tobacconists are tackling this growing market with the sale of several types of products and tobacco liquids with different tastes. Spraying, heating tobacco, and chichas for tobacco-related products; but also stationery and newspapers as well as food products: diversification appears today to be essential to survive on the market: indeed, the crisis is hitting tobacconists more and more with nearly 8,000 tobacconist closures over the past 15 years . The sustainability of this type of business therefore lies in its ability to reinvent itself, diversify and modernise
In addition, the overall offer of tobacconists is diversifying, gradually transforming the business model of tobacconists with the aim of remaining the convenience store par excellence
List of charts presented in this market study
- World tobacco production
- Part de marché des principaux cigarettiers, en volume
- Prix d'un paquet de 20 cigarettes en Europe
- Taille du marché de la cigarette électronique en valeur
- Motivations des fumeurs à passer à la cigarette électronique
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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.
The NAP group (Maison de la Presse) continues its transformation - 31/07/2023
- The NAP Group has around 1,250 sales outlets.
- Around a third of these outlets are located in towns with fewer than 100,000 inhabitants.
- The NAP Group has grown by +1 to +1.5% in value since the beginning of 2022.
- The group achieved sales of 2 billion euros in 2022.
- The NAP group represents 17% of press sales in France.
- It is the 4th largest bookstore chain, excluding food retailers.
- The group plans to launch corners, with an initial estimate of around one hundred by the end of 2024.
- On average, a Maison de la Presse welcomes over 400 customers a day.
- By 2022, the NAP Group expects to have collected 900 million euros in tobacco sales.
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.
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
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