New market study, "Cigarettes in Venezuela", has been published

From: Fast Market Research, Inc.
Published: Wed Jul 30 2014

Over the review period, cigarettes experienced a drop in volume sales at the same time illicit trade continued to grow. The price difference existing between economy brands of cigarettes and illicit products was so significant that there was a huge incentive to the purchase of illicit cigarettes, and even more when taking into account the limited and deteriorating purchasing power of Venezuelans. Fortunately for tobacco companies, this trend began to reverse in 2013 with the devaluation of the local currency by 46.5%, which negatively affected the dynamics of cigarettes overall. Given the fact that demand for foreign currency was far in excess of supply, the devaluation of the bolivar in the black market was even more pronounced. In this regard, the demand for illicit cigarettes suffered from shortages with illegal importers being unable to maintain competitive prices for smuggled cigarettes.

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Competitive Landscape

The cigarettes industry in Venezuela is purely dominated by private companies CA Cigarrera Bigott Sucs and CA Tabacalera Nacional, which are subsidiaries of British American Tobacco Plc and Philip Morris International Inc, respectively. Domestic companies have no presence in cigarettes, presumably because of the strong presence of multinationals, which represents a major entry barrier. CA Cigarrera Bigott Sucs, which accounted for 89% volume share of cigarettes in 2013, counts on AgroBigott financing the production of raw tobacco and providing technical support and assistance to farmers during the harvest.

Industry Prospects

Contrary to what had been estimated in previous editions, legally sold cigarettes are expected to continue gaining ground at the expense of the illicit trade volume. As the main source of financing for illicit trade is the black market, and given the exacerbated increase of the exchange rate in the black market, it is expected that illicit trade will continue to lose ground due to lack of competitiveness in terms of price. In addition, as the government fails to receive a substantial sum of money in taxation from the sale of smuggled cigarettes, it will be likely to implement more stringent policies to avoid smuggling along the border of the country

Report Overview

Discover the latest market trends and uncover sources of future market growth for the Cigarettes industry in Venezuela with research from Euromonitor's team of in-country analysts.

Find hidden opportunities in the most current research data available, understand competitive threats with our detailed market analysis, and plan your corporate strategy with our expert qualitative analysis and growth projections.

If you're in the Cigarettes industry in Venezuela, our research will save you time and money while empowering you to make informed, profitable decisions.

The Cigarettes in Venezuela market research report includes:

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You may also be interested in these related reports:

- Cigarettes in Colombia
- Cigarettes in Chile
- Cigarettes in Belgium
- Cigarettes in Switzerland
- Cigarettes in the United Kingdom
Company: Fast Market Research, Inc.
Contact Name: Bill Thompson
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