Indian Cigarette Sales on Track to Surpass Pre-Covid Levels

Innovation
Jul.15.2022

Indian cigarette sales are set to touch 93 billion sticks this year on the back of a stable tax regime and increased mobility after the ebbing of pandemic restrictions, reports The Financial Express, citing a study by rating agency Crisil.

 

Indian Cigarette Sales on Track to Surpass Pre-Covid Levels

 

Covid-19 lockdowns caused cigarette volumes to plunge to 77 billion sticks in 2021 from 90 billion sticks in 2020. As restrictions eased, cigarette sales recovered to 88 billion sticks.

 

The higher volumes will help cigarette manufacturers cope with the rising cost of inputs, which Crisil expects to shave manufacturers’ gross margins by 100-150 basis points.

 

Indian cigarette makers use flue-cured Virginia (FCV) tobacco, which is grown mostly in Andhra Pradesh, Telangana and Karnataka. FCV prices have risen 15 percent since last year as cultivation was impacted by untimely rainfall in December 2021 and January 2022.

 

Meanwhile, prices of paper are estimated to be 10 percent higher this fiscal year on an already-elevated base from 2020. India’s recently enacted ban on single-use plastics has driven up products costs, too, as cigarette manufacturers shift to biodegradable materials.

 

Between 2013 and 2017, excise duties on cigarettes rose annually at 15.7 percent. In fiscal 2018, the industry saw a further 20 percent hike in taxes as a result of the increase in excise duty and transition to a good and services tax.

 

Despite such challenges, cigarette manufacturers appear to be in good financial shape.

 

According to Crisil Associate Director Gopikishan Dongra, tobacco companies are likely to retain around 65 percent operating margins, due to the strong competitive advantage of established manufacturers and high entry barriers such as entrenched distribution channels and restrictions on advertising.

 

The content excerpted or reproduced in this article comes from a third-party, and the copyright belongs to the original media and author. If any infringement is found, please contact us to delete it. Any entity or individual wishing to forward the information, please contact the author and refrain from forwarding directly from here.

 

Also read:

Indiana laws that go into affect this month

Germany's Strict Regulations on E-cigarettes: Multiple Shops Investigated

 

India Duty-Free Nicotine Pouch Sales Face Regulatory Test as ZYN, FOX Classification Remains Open
India Duty-Free Nicotine Pouch Sales Face Regulatory Test as ZYN, FOX Classification Remains Open
The Bombay High Court has ruled that airport duty-free shops are not exempt from India's domestic regulatory laws merely because they operate beyond the customs barrier, leaving in place a sales halt covering ZYN and FOX nicotine pouches at Mumbai's international airport. The court, however, did not determine that the products necessarily qualify as "drugs" under India's Drugs and Cosmetics Act. The retailers have four weeks to submit product information to the appropriate authorities, including CDSCO, which must complete its review within 30 days of receiving the submissions.
Sep.24
IVG Parent Secures HMRC Excise Warehouse and Duty Stamp Approvals Ahead of UK Vape Tax
IVG Parent Secures HMRC Excise Warehouse and Duty Stamp Approvals Ahead of UK Vape Tax
Acme Vape Ltd, the company behind UK vaping brand IVG, has received HM Revenue & Customs approval to operate an excise warehouse for vaping products and participate in the Vaping Duty Stamps Scheme. The UK's Vaping Products Duty will take effect on October 1, 2026, at a flat rate of £2.20 per 10ml of vaping liquid. Acme Vape Ltd says its approved warehouse in Preston will become operational under the new regime on the same date.
Regulations
Sep.18 by 2Firsts Perspectives
UK Reform Party Proposes Cap of 1,000 Vape Shops Under Plan to Tighten Retail Controls
UK Reform Party Proposes Cap of 1,000 Vape Shops Under Plan to Tighten Retail Controls
The UK Reform Party has proposed limiting the number of dedicated vape shops in the country to around 1,000 as part of a plan to tighten oversight of vape retail channels. The proposal was put forward by Reform UK deputy leader and MP Lee Anderson. The plan remains a political proposal and has not become UK government policy, with no detailed legislation, implementation timeline or allocation rules announced.
Aug.10
BREAKING | China’s Tobacco Regulator Summons iMiracle Over Suspected Compliance Breaches
BREAKING | China’s Tobacco Regulator Summons iMiracle Over Suspected Compliance Breaches
Based on public records reviewed by 2Firsts, this is the first time China’s State Tobacco Monopoly Administration has publicly announced regulatory talks with an e-cigarette company.
Jul.29
Germany's Four-Year Tobacco Tax Plan Heads to Parliament as BAT, JTI and PMI Push for Changes
Germany's Four-Year Tobacco Tax Plan Heads to Parliament as BAT, JTI and PMI Push for Changes
Germany's parliament is scheduled to hold a first reading of amendments to the Tobacco Tax Act on September 24. The government plans annual tax increases from 2027 through 2030 covering cigarettes, heated tobacco, vaping liquids and other categories. It expects the reform to generate €756 million in additional revenue in 2027, rising to €3.589 billion in additional annual revenue by 2030. Ahead of the parliamentary debate, the German Association of the Tobacco Industry and Novel Products, or BVTE, launched the "Tabaksteuer mit Augenmaß" campaign backed by BAT, JTI, Philip Morris, Reemtsma and wholesale and retail groups.
Sep.23
PMI's IQOS Extends ZAMNA Electronic-Music Partnership to Spain as Vogue España Publishes Branded Content
PMI's IQOS Extends ZAMNA Electronic-Music Partnership to Spain as Vogue España Publishes Branded Content
Philip Morris International's IQOS has extended its partnership with electronic-music event brand ZAMNA to Spain, setting up a House of IQOS at ZAMNA Madrid. Vogue España and Time Out Madrid subsequently published branded content clearly labeled as collaborations with IQOS. PMI has also expanded its company-owned IQOS boutique network in Spain to seven cities this year. The company says IQOS's adjusted heated-tobacco market share in Europe reached 12.6% in the first quarter of 2026, with Spain among its stronger-performing European markets.
Sep.20