UK: Tobacco Category Report 2016

Source from:  The Grocer 02/19/2016

The fat lady is singing for tobacco. Cig sales are down 2.5% on volumes down 6.5% [Nielsen 52 w/e 31 December 2015]; even rolling tobacco, the sector's only bright spot in recent years, has slipped into volume decline of 1.7% in the past year, although value is up 3.1%.

According to Action on Smoking & Health, 18% of Brits still enjoy a puff, down from 25% in 2007. If fags are unfashionable now, they'll become more so this year when plain packaging rules and other regulations are enforced

From May, all packs will have to be the same sludge brown colour, brand names will be in a standardised font and 65% of the front of packs will be given over to health warnings (half of other sides). New EU rules will also impose minimum pack sizes of 20 cigs, or 30g of tobacco, and ban flavour variants. 

Under the EU Tobacco Products Directive II (TPD2) and plain pack rules, manufacturers will have until May 2017 to sell off existing stock. After that, to all intents and purposes, tobacco brands will cease to exist; tricks for differentiating themselves from rivals and offsetting relentless tax hikes will be outlawed. 

So coming months will see tobacco brands' last gasp attempts to drum home a point of difference and foster brand loyalty. What do they have planned? And just how big an impact will the new rules have on the market. Enditem