Summary of our market study

Since 2020, the French tobacconist market, as part of a wider global tobacco industry worth approximately $785 billion, has faced challenges due to a decline in tobacco consumption, with prices reaching €10 per pack resulting in a drop in sales. The market has been further influenced by the Covid-19 pandemic, which led to reduced tobacco use and constrained consumer visits to local shops despite tobacconists being among the essential services that remained open. Tobacconists are diversifying their offerings to survive, such as by selling electronic cigarettes and tackling online markets for convenience goods and services. Electronic cigarettes experienced explosive market growth until 2018 and the competition from online betting platforms is on the rise. The implementation of stringent regulations around tobacco and related products, including the state monopoly on retail tobacco sales, also continues to shape the tobacconist landscape in France.

Analysis of Consumer Trends in the Tobacco and Related Markets in France

In recent years, the French market has experienced significant shifts in tobacco-related consumer behaviors. The country's tobacconist network, comprised of around 24,000 points of sale, is the most extensive network of local shops nationwide. These stores, known as "buralistes," play a crucial role in local economies and communities, often diversifying to include offerings beyond tobacco such as lottery, postal, and relay services. Despite the strong presence of tobacco outlets, there has been a noticeable decline in smoking prevalence in France.

The government's health policies and anti-smoking measures, coupled with yearly increases in tobacco prices, have led to a drop in tobacco consumption. The introduction of neutral packaging, awareness campaigns, and the annual "smoke-free month" have furthered this trend, contributing to a decline in daily smoking by between 4 and 5 percentage points.

In monetary terms, the French government garners a significant portion of tobacco-related revenue, with figures estimated above 80% of total tobacco revenues, amounting to between 15 and 20 billion euros annually, which primarily funds the social security budget. This heavy taxation has driven the average price of a cigarette pack well above 10 euros, making France one of the priciest countries for tobacco globally. The rise in prices has incentivized cross-border purchases, and currently, nearly one in five French smokers are reported to buy their cigarettes abroad. The preferred destinations for these purchases include neighboring countries like Spain, Germany, Luxembourg, and Belgium.

Another noteworthy trend is the rise of electronic cigarettes, which has seen the market value increase 24-fold over six years. Going hand-in-hand with the decline in traditional tobacco use, this boom has led tobacconists to expand their product lines to include various e-cigarette devices and e-liquids. However, their position is challenged by specialized vape shops, online vendors, and the increasing preference among young consumers for digital platforms for products like sports betting.

Regarding the betting sector, tobacconists earn commissions of around 1.6 to 1.9% on bets placed through them, while La Française des Jeux offers them a 5% commission for lottery and scratch card sales. Despite the appeal of physical outlets, there is a substantial draw towards online platforms which offer better odds and bonuses to customers. The Covid-19 pandemic initially caused a reduction in tobacco consumption and restricted access.

Key Players in the Global and French Tobacconist Market Landscape

The tobacconist market, within France and on a global scale, involves various dynamic sectors ranging from tobacco production to cigarette manufacturing, alongside the burgeoning electronic cigarette market and the sports betting domain. The landscape is shaped by a handful of major corporations that influence production, distribution, and sales trends across the board.

China National Tobacco Corporation:

The Gargantuan Market Leader Despite its limited international presence, the China National Tobacco Corporation emerges as the titan in the industry, with a colossal 44.0% market share by volume, according to 2016 metrics by Jefferies. Its dominance is strictly within the Chinese market, which leads the world in tobacco production, suggesting an inward-focused strategy with a massive local consumer base.

British American Tobacco:

The Global Giant A name that resonates globally, British American Tobacco has established itself as a frontrunner in the tobacco industry. Known for their extensive portfolio of conventional cigarettes, the company is a key player in the nearly US$785 billion market, with a significant portion of its revenue stemming from these products consumed world over.

Electronic Cigarette Innovators:

VDLV and Alfaliquid Venturing into the domain of electronic cigarettes, French brands like VDLV and Alfaliquid have carved out prestigious reputations, not just domestically but internationally too. As France positions itself as a major consumer and producer in the e-cigarette landscape, these companies signal the shift towards innovative alternatives to traditional tobacco consumption.

La Française des Jeux (FDJ):

A Gambling Enterprise Sports betting and gambling activities also interweave with the tobacconist market in France, with La Française des Jeux (FDJ) at the forefront. This state-owned operator not only handles lotteries and betting games but also substantially contributes to the local retail ecosystem, notably within the tobacconist network. FDJ represents a significant portion of the earnings for tobacconists through commissions on bets and scratch card sales.

The market is not without its challenges, particularly with the rise of online competitors in sports and horse betting, as well as specialized electronic cigarette shops. Platforms like Unibet, Winamax, and Betclic, alongside vape-shops and e-commerce sites such as Petit Vapoteur or Cigarette Elec, are increasing the competitive heat by offering diverse product ranges, attractive odds, and tailored customer service. 

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  • Last update : 05/07/2023
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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.
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

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. :

British American Tobacco
Philip Morris International
Japan Tobacco
Imperial Brands
Kumulus Vape
Altria (Philip Morris USA, Malboro)
Maison de la Presse - Mag Presse
Logista France (Altria)
Altadis (Imperial tobacco)
JTI (Japan Tobacco International)
Republic Technologies Groupe
Scandinavian Tobacco Group

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