Tobacco industry in the Middle East and Africa is growing in both cigarettes and alternative tobacco products, with Egypt, Saudi Arabia and South Africa to offer the largest opportunity. Cigarettes are demonstrating moderate growth depending on smoking tradition in the country and import processes. E-vapour products and heated tobacco are growing fast from smaller base, and their future in the region depends on further regulations and innovative products yet to be offered by manufacturers.
This report comes in PPT.
A common theme across many countries in the region has been consumers looking for lower-priced products or cheaper brands in cigarettes. This is in the face of high inflation, rising tobacco taxes, supply chain constraints and devaluation of local currencies. This has seen industry players removing underperforming brands from their portfolios, introducing cheaper lines and trying to keep a lid on any price rises.
South Africa is the biggest market in the region for next-generation products like e-vapour and heated tobacco products, and is helping to drive the overall Middle East and Africa performance. However, Tunisia recorded the strongest growth in 2022, which was down to heated tobacco and PMI’s Iqos 3 Duo and HEETS products.
The monopoly over the manufacturing of cigarettes in Egypt by state-owned Eastern Co came to an end in 2022, when PMI subsidiary United Tobacco Company started manufacturing cigarettes locally, following PMI’s acquisition of a licence to make tobacco in Egypt. On the other hand, BAT decided to halt its activities in Egypt and exit the market.
Egypt’s Eastern Co is expected to launch local heated tobacco products over the forecast period. The company is planning to invest EGP300-500 million in a new heated tobacco production line in the country. This is expected to drive lower prices for heated tobacco products, especially as Eastern Co will likely use competitive price strategies to reach a wider segment of consumers and attract more Egyptians into the category.
Passport Tobacco covers the seven major tobacco categories: Cigarettes, Cigars & Cigarillos, Smoking tobacco (made up of Pipe tobacco and RYO tobacco), Smokeless Tobacco (snuff and chewing tobacco), E-Vapour Products (closed and open); Heated Tobacco; and Tobacco Free Oral Nicotine. Smoking paraphernalia such as pipes, rolling papers, lighters or matches, etc., are not included, nor are nicotine replacement therapy (NRT) products, which are part of Euromonitor's Passport Consumer Healthcare database.
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