Turkish Cigarettes: A market dying of its own poison? Rising taxes and falling exports: Ken Research
Posted on 11 October 2017 by KenResearch Food and Beverage,
The Turkish Cigarette market was growing rapidly until past few years. The growth, which started in 1990, started to slow down in 2004. Until then, the market grew about 48%. Recently, this segment has seen some significant slow down in terms of sales.
Every year, thousands of people die in Turkey because of tobacco consumption. In addition, million more use tobacco on daily basis, affecting their and their families lives. As education and knowledge is spreading, more and more people are becoming aware about the harmful effects of smoking a cigarette and moving away from it. Rising cigarette prices, increased taxes and stringent regulations are aggravating the situation and hampering the sales of cigarettes further. In 2014, the per capita consumption was 1208 cigarettes. Although the growth has slowed down, but it has not stopped. Because of increase in adult smoking population and increase in unit price of cigarette, the market is expanding in terms of both volume and value. In past few years, Turkey saw a rise in illicit trade and smuggling of cigarettes. But the government has cracked down most of these smugglers and have taken strict actions against them. Before this crackdown, illegal trade of cigarettes from Iran to Turkey was hampering the legal sale of cigarettes.
According to the market research report "Cigarettes in Turkey, 2016", Turkey is not just a big consumer of cigarettes but also an exporter of cigarettes. Countries like Bahrain, Iran and Iraq are major importers of Turkish cigarettes. There are five major market leaders in Turkish Cigarette Market. Philip Morris, European Tobacco AS, British American Tobacco (British American Tobacco Turkey), JTI Tutun Urunleri San (JTI) and Imperial Tobacco. At present, British American Tobacco is the market leader while JTI is at second position. The main distribution channel is of small grocers. These independent small grocers are very convenient for consumers to by cigarettes from. Tobacco specialists and shopping malls and a major part of distribution channel.
The sales of cigarettes are expected to fall further in next few years due to increasing prices, increasing tax rates and increasing awareness about health and fitness. However, the sale of cigars is expected to rise because of improvement in taste and lifestyle of Turkish people. Hence, rise in the imports of cigars and branded cigarettes can be seen in near future.
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