Cigarettes recorded modest volume growth in Latin America in 2023, although value growth was higher, driven by rising prices. E-vapour and heated tobacco products continued to record strong growth, although the development of these categories is still being held back by the ban on legal sales in Brazil and Argentina. However, in the latter country, there are signs that the Milei government is looking to legalise sales of next-generation tobacco products.
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The difficult economic climate, with the pandemic having impacted some consumers’ disposable incomes as well as the recent high inflation rates, has seen smokers increasingly turning to illicit trade for their cigarettes, with a resultant negative impact on legal sales. The share of illicit products in cigarette sales was increasing in most countries in the region in 2023.
Earlier in the review period, e-vapour and heated tobacco products were banned in all of the big three markets in Latin America: Argentina, Brazil and Mexico. However, legal sales of heated tobacco products have been seen in Mexico since 2021, while there is an increasing belief that Argentina could allow legal sales of e-vapour and heated tobacco products over 2023-2028.
Economy cigarettes continued gaining share from the mid-priced segment in Brazil in 2023. This can be attributed to increasing price sensitivity among some consumers in the difficult economic scenario, but also decreasing brand loyalty. This trend has also been driven by players expanding the availability of economy cigarette brands like Camel.
From January 2023, new legislation came into effect in Mexico, expanding areas where smoking is prohibited to any workplace, spaces of collective gatherings, all public transportation and all educational establishments. It also prohibited all forms of tobacco advertising, promotion and sponsorship through any means of communication and dissemination, including the direct and indirect display of tobacco products at points of sale.
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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