China drags down global market

| June 20, 2016
Shane MacGuill

Shane MacGuill

Cigarette volumes in China declined in 2015 for the first time in more than two decades, according to new data published by Euromonitor International. Driven by a wholesale excise rise, increased government control on production and greater health awareness in some regions, the cigarette market in China fell by 2.4 percent since 2014.

“Like the ebbing of a fading tradition, 2015 cigarette volumes decline in China—the world’s largest and heretofore one of the last remaining growth markets—delivered the defining narrative of the year in global tobacco,” said Shane MacGuill, Euromonitor’s head of tobacco research.

“We do not see 2015 as a one-off with the Chinese market projected to lose 5 percent of its volumes by 2020.”

Despite its shrinking size, the Chinese market accounted for 45 percent of global cigarette volumes in 2015. Given its size, the country’s negative performance exerted a huge impact on the world cigarettes market, which worsened by more than 2 percent since 2014 and 2015—the biggest global year-on-year decline in over two decades.

“2015 was largely a tale of regions switching established roles,” said MacGuill concluded. “Asia Pacific, dragged down by China, recorded a decline of 2.5 percent while Western Europe–for the first time in several years—saw positive volume growth as economies there recovered and outswitching to illicit, OTP and vapor products lessened.”

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