Decline of Global Cigarette Market and Growth of RRP
According to a recent report by The London Times, the global cigarette market is projected to decrease by one-third before 2027. This phenomenon can be attributed to the increasingly stringent tobacco control policies implemented worldwide, as well as the significant growth of reduced-risk products (RRPs). However, the markets in the Asia-Pacific and Latin American regions are expected to continue expanding.
According to Shane MacGuill from market research company Euromonitor International, this year's tobacco market has witnessed a phenomenon of "dual markets". Overall, the global cigarette market has shown weak growth, but in the Asia-Pacific and Latin American regions, the market performance is clearly bullish.
The developed markets have experienced a significant decline in cigarette sales. Cigarette sales in Western Europe have decreased by 4.4%, marking the largest drop in a decade. In North America, the decline reached 8.5%, the biggest decrease ever recorded. One key factor contributing to the decrease in cigarette sales, amidst various regulatory measures, is the emergence of various new low-risk products such as e-cigarettes, heated tobacco, and nicotine pouches.
In 2022, the value of heated tobacco products reached $32 billion, making it the largest category in risk reduction, almost double the $19 billion of e-cigarettes. This year also saw continuous double-digit growth of heated tobacco in regions outside of Western Europe, the Middle East, and Africa, which have traditionally been strongholds for such products in Asia-Pacific and Eastern Europe.
In 2022, the usage of disposable e-cigarettes has increased by 91%, with a growth rate of nearly 1000% in its key region, Western Europe. However, concerns arise due to the attractiveness of disposable e-cigarettes to young consumers and the environmental impact of having to discard lithium batteries, electronic components, and plastic casings after each use. Compared to existing e-cigarette devices, disposable products are highly sensitive in terms of specified risks.
New Zealand has now banned the use of disposable e-cigarettes (according to the law, e-cigarettes must have replaceable batteries), and similar restrictions are likely to be encountered in other markets, including Germany, France, and the United Kingdom. The forthcoming battery legislation being introduced by the European Union may effectively bring about a ban on disposable e-cigarettes.
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