Tobacco Markets in the Netherlands

Report Summary

Discover the latest market trends and uncover sources of future market growth for the Tobacco industry in Netherlands 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.

The Tobacco in Netherlands market research report includes:

• Analysis of key supply-side and demand trends
• Detailed segmentation of international and local products
• Historic volumes and values, company and brand market shares
• Five year forecasts of market trends and market growth
• Production, imports by origin, exports by destination
• Robust and transparent market research methodology, conducted in-country

Our market research reports answer questions such as:

• What is the market size of Tobacco in Netherlands?
• What are the major brands in Netherlands?
• Which sector of the tobacco products market is the largest by value sales in Netherlands?
• Which sector of the tobacco products market has been growing the fastest, by volume and value, in Netherlands?
• Which sector is the most heavily taxed in Netherlands?
• Which companies dominate in the total tobacco market in Netherlands in terms of market share?
• What is the distribution channel split for the tobacco products market in Netherlands?

Why buy this report?

• Gain competitive intelligence about market leaders
• Track key industry trends, opportunities and threats
• Inform your marketing, brand, strategy and market development, sales and supply functions

EXECUTIVE SUMMARY

Continuing fall in volume in 2010

Sales of tobacco again saw declining volumes in 2010. The number of people smoking in the Netherlands continued to fall in 2010 as more people were committed to following healthier lifestyles, while the high prices for tobacco serve as an additional incentive to quit. Higher prices for cigarettes created shifts towards cheaper alternatives, impacting manufacturer activity towards promoting products based on price (economy references) or more attractive value-for-money options as a result of a more frugal approach from consumers.

Pack size used as a tool to counteract higher prices

Tobacco companies needed to pursue more measures to counteract the damaging effects of rising prices, as demand shifted towards cheaper products. Manufacturers reduced the number of cigarettes in packs with the 19-unit type being the most popular in 2010. Large packs were also promoted, including XL or XXL, but, with higher prices, these were less attractive to consumers. The shift towards smoking tobacco, including MYO (make-your-own tobacco) or RYO, occurred as it was seen as a more economical alternative to cigarettes, with manufacturers present in this category also competing on price by promoting higher volume offers.

Top multinationals dominate tobacco in 2010

The market for tobacco remained highly concentrated in 2010 with four multinationals – Philip Morris Holland, British American Tobacco Netherlands, JT International Co Netherlands and Imperial Tobacco Netherlands – concentrating most sales in key categories such as cigarettes and smoking tobacco. Large companies faced increased pressure to maintain share due to falling volumes, pursuing more intensive promotional actions focused on price by introducing smaller packs or reinforcing main brands with extensions such as Kent Surround. Smaller niche domestic companies such as Biggelaar Tabak or Heupink & Bloemen profited by consolidating their own brands such as Elixyr or Look out as economy alternatives.

Supermarkets and discounters gain share in distribution

Distribution of tobacco is witnessing an increase in sales through grocery retailers, driven by supermarkets/hypermarkets and discounters. Intense promotional activity by the main chains and extended shopping hours are benefiting the flow of demand towards these channels, while impacting on traditional ones such as tobacco specialists. Large manufacturers within cigars such as Agio Cigars are placing more emphasis on the supermarkets channel in order to profit from the impulse purchases for products such as cigarillos. Although small, the share held by internet retailing is also rapidly expanding, driven by the increasing numbers of consumers choosing the convenience of shopping online.

The market faces poor growth prospects as taxes increase

Tobacco in the Netherlands faces more restrictions in terms of taxation and also changes in consumers’ lifestyles towards healthy living, which are likely to lead to more people stopping smoking. Cigarettes are forecast to suffer continuing volume decline over the forecast period, as the Dutch government is committed to further implementing measures aimed at increasing barriers for consumers to smoke. Taxes on tobacco will further increase in 2011 as more increments are foreseen to further affect prices of cigarettes and smoking tobacco, which may lead to more pressure among manufacturers. Other categories such as cigars are likely to fare better, despite their higher prices.

Table of Contents

Tobacco in the Netherlands - Industry Overview

EXECUTIVE SUMMARY
Continuing fall in volume in 2010
Pack size used as a tool to counteract higher prices
Top multinationals dominate tobacco in 2010
Supermarkets and discounters gain share in distribution
The market faces poor growth prospects as taxes increase

OPERATING ENVIRONMENT
Legislative overview/ FCTC ratification
Summary 1 Legislation Summary at a Glance
Country-specific legislation:
Minimum legal smoking age
Smoking Prevalence
Table 1 Smoking Prevalence in Adult Population 2005-2010
Table 2 Number of Smokers by Gender 2005-2010
Tar levels
Health warnings
Advertising and Sponsorship
Smoking in public places
Low Ignition Propensity (LIP) regulation
Electronic cigarettes
Litigation
Death by Cause
Table 3 Death by Cause 2005-2010

TAXATION AND PRICING
Duty-paid packet marks
Taxation rates
Table 4 Taxation and Duty Levies 2005-2010
Average cigarette pack price breakdown
Table 5 Average Cigarette Pack Price Breakdown: Brand Examples

PRODUCTION/IMPORTS/EXPORTS
Table 6 Trade Statistics
Table 7 Production/Imports/Exports 2005-2010
Illicit trade in cigarettes

MARKET INDICATORS
Table 8 Illicit Trade Estimate of Cigarettes by Volume 2005-2010

MARKET DATA
Table 9 Sales of Tobacco by Category: Volume 2005-2010
Table 10 Sales of Tobacco by Category: Value 2005-2010
Table 11 Sales of Tobacco by Category: % Volume Growth 2005-2010
Table 12 Sales of Tobacco by Category: % Value Growth 2005-2010
Table 13 Forecast Sales of Tobacco by Category: Volume 2010-2015
Table 14 Forecast Sales of Tobacco by Category: Value 2010-2015
Table 15 Forecast Sales of Tobacco by Category: % Volume Growth 2010-2015
Table 16 Forecast Sales of Tobacco by Category: % Value Growth 2010-2015

DEFINITIONS
Summary 2 Research Sources
Tobacco in the Netherlands - Company Profiles

Agio Cigars in Tobacco (Netherlands)
STRATEGIC DIRECTION
KEY FACTS
COMPANY BACKGROUND
PRODUCTION
Summary 5 Agio Cigars: Production Statistics 2010
COMPETITIVE POSITIONING
Summary 6 Agio Cigars: Competitive Position 2010

Biggelaar Tabak BV in Tobacco (Netherlands)
STRATEGIC DIRECTION
KEY FACTS
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
Summary 8 Biggelaar Tabak BV: Competitive Position 2010

Philip Morris Holland BV in Tobacco (Netherlands)
STRATEGIC DIRECTION
KEY FACTS
COMPANY BACKGROUND
PRODUCTION
Summary 11 Philip Morris Holland BV: Production Statistics 2009
COMPETITIVE POSITIONING
Summary 12 Philip Morris Holland BV: Competitive Position 2009

Cigarettes in the Netherlands - Category Analysis

HEADLINES

TRENDS
Sales of cigarettes experienced further decline in volume terms during 2010, falling by 10% in comparison to the previous year and maintaining the same trend seen over the review period. Demand for cigarettes was impacted by increasing concern among Dutch consumers about health and wellbeing. Sales of cigarettes were further influenced by the introduction of increased excise duties in 2010, resulting in higher cigarette prices, posing additional obstacles for the industry. As a result of higher taxes, offsetting the decline in volume, manufacturers saw value sales growth due to higher unit prices. Cigarette sales faced greater competition from cheaper alternatives such ROY tobacco, with manufacturers present in that category trying to profit from the shift towards cheaper smoking by placing a greater emphasis on quality and price.

COMPETITIVE LANDSCAPE
Cigarettes in the Netherlands remains highly concentrated among four companies. Philip Morris Holland BV and British American Tobacco Netherlands BV ranked first and second with 37% and 34% volume shares, respectively, in 2010.

NEW PRODUCT DEVELOPMENTS
Summary 13 Cigarettes - New Product Launches

DISTRIBUTION

PROSPECTS
Sales of cigarettes are expected to continue suffering over the forecast period from higher taxation, more restrictive legislation, and a general consumer desire to pursue healthier lifestyles. The number of people smoking is estimated to continue decreasing over the next five years, as more consumers stop smoking and campaigns focus on younger people in order to avoid them starting with the habit, factors that are likely to impact on declining volume sales for cigarettes over the forecast period.

SECTOR BACKGROUND
Cigarettes: Price Bands
Summary 14 Cigarette Price Band Definitions
Cigarettes: Menthol/standard
Cigarettes: Filter/non-filter
Cigarettes: Carbon/standard filter
Cigarettes: Filter length
Cigarettes: Slims/superslims vs regular
Cigarettes: Pack size
Cigarettes: Pack type

CATEGORY DATA
Table 17 Sales of Cigarettes by Tar Level: Volume 2005-2010
Table 18 Sales of Cigarettes by Tar Level: Value 2005-2010
Table 19 Sales of Cigarettes by Tar Level: % Volume Growth 2005-2010
Table 20 Sales of Cigarettes by Tar Level: % Value Growth 2005-2010
Table 21 Sales of Cigarettes by Price Band: % Volume Breakdown 2005-2010
Table 22 Sales of Cigarettes by Standard/Menthol: % Volume Breakdown 2005-2010
Table 23 Sales of Cigarettes by Tobacco Type: % Volume Breakdown 2005-2010
Table 24 Sales of Cigarettes by Filter Vs Non-filter: % Volume Breakdown 2005-2010
Table 25 Sales of Filter Cigarettes by Carbon Vs Non-carbon: % Volume Breakdown 2005-2010
Table 26 Sales of Cigarettes by Length: % Volume Breakdown 2005-2010
Table 27 Sales of Cigarettes by Regular/Slim: % Volume Breakdown 2006-2010
Table 28 Sales of Cigarettes by Pack Size: % Volume Breakdown 2005-2010
Table 29 Sales of Cigarettes by Pack Type: % Volume Breakdown 2005-2010
Table 30 Cigarettes Company Shares 2006-2010
Table 31 Cigarettes Brand Shares 2007-2010
Table 32 Sales of Cigarettes by Distribution Format: % Analysis 2005-2010
Table 33 Cigarettes: Production, Imports and Exports: Total Volume 2005-2010
Table 34 Forecast Sales of Cigarettes by Tar Level: Volume 2010-2015
Table 35 Forecast Sales of Cigarettes by Tar Level: Value 2010-2015
Table 36 Forecast Sales of Cigarettes by Tar Level: % Volume Growth 2010-2015
Table 37 Forecast Sales of Cigarettes by Tar Level: % Value Growth 2010-2015
Table 38 Forecast Sales of Cigarettes by Price Band: % Volume Breakdown 2010-2015
Table 39 Forecast Sales of Cigarettes by Standard/Menthol: % Volume Breakdown 2010-2015
Table 40 Forecast Sales of Cigarettes by Tobacco Type: % Volume Breakdown 2010-2015
Table 41 Forecast Sales of Cigarettes by Filter Vs Non-filter: % Volume Breakdown 2010-2015
Table 42 Forecast Sales of Filter Cigarettes by Carbon Vs Non-carbon: % Volume Breakdown 2010-2015
Table 43 Forecast Sales of Cigarettes by Length: % Volume Breakdown 2010-2015
Table 44 Forecast Sales of Cigarettes by Regular/Slim: % Volume Breakdown 2010-2015
Table 45 Forecast Sales of Cigarettes by Pack Size: % Volume Breakdown 2010-2015
Table 46 Forecast Sales of Cigarettes by Pack Type: % Volume Breakdown 2010-2015

Cigars in the Netherlands - Category Analysis

HEADLINES

TRENDS
Sales of cigars are registering healthy growth despite the great restrictions imposed on smoking in the Netherlands. Cigars have a more positive image among consumers, but the consumer base is still considered more restricted to mature males. Even though the Netherlands boasts relatively high cigar consumption, the market continued to grow in volume and value terms during 2010. Manufacturers remain active in promoting more varieties and aiming to create a shift towards more expensive, high-quality formulas and winning new consumers, particularly the younger generations.

HAND-MADE VERSUS MACHINE MANUFACTURED SPLITS
Table 47 Sales of Cigars by Handmade vs Machine-manufactured 2006-2010

COMPETITIVE LANDSCAPE
Cigars in the Netherlands shows a high degree of concentration among long-established companies present with an array of strong and popular brands in the categories where they are present. Agio Cigars was the largest manufacturer with a 44% share in 2010, holding a strong position in both cigars and cigarillos. Balmoral and De Huifkar are top-selling brands in the premium segment, while Mehari’s and Panter are the leaders in cigarillos.

NEW PRODUCT DEVELOPMENTS
Summary 15 Cigars and Cigarillos - New Product Launches

DISTRIBUTION

PROSPECTS
Cigars is mature in the Netherlands, but still shows opportunities for growth. With a better image than cigarettes and more exempted from criticism by consumer groups, cigars will benefit with positive growth prospects during the forecast period.

CATEGORY DATA
Table 48 Sales of Cigars by Category: Volume 2005-2010
Table 49 Sales of Cigars by Category: Value 2005-2010
Table 50 Sales of Cigars by Category: % Volume Growth 2005-2010
Table 51 Sales of Cigars by Category: % Value Growth 2005-2010
Table 52 Sales of Cigars by Handmade vs Machine Manufactured: % Volume Breakdown 2005-2010
Table 53 Company Shares of Cigars Excluding Cigarillos 2006-2010
Table 54 Brand Shares of Cigars Excluding Cigarillos 2007-2010
Table 55 Company Shares of Cigarillos 2006-2010
Table 56 Brand Shares of Cigarillos 2007-2010
Table 57 Sales of Cigars by Distribution Format: % Analysis 2005-2010
Table 58 Forecast Sales of Cigars by Category: Volume 2010-2015
Table 59 Forecast Sales of Cigars by Category: Value 2010-2015
Table 60 Forecast Sales of Cigars by Category: % Volume Growth 2010-2015
Table 61 Forecast Sales of Cigars by Category: % Value Growth 2010-2015

Smokeless Tobacco in the Netherlands - Category Analysis

TRENDS
At the end of 2010 there was still no smokeless tobacco sold in the Netherlands. These products are not yet approved by the local authorities, although the industry believes this may happen in the short to medium term. Dutch consumers are mainly able to purchase “snus” online and delivered from other countries.

Smoking Tobacco in the Netherlands - Category Analysis

HEADLINES

TRENDS
In spite of the great popularity of RYO tobacco in general in the Netherlands, volume sales declined significantly in RYO tobacco in 2010 due to the increase in unit prices stemming from high tax rises, which affected consumer demand and consumption levels. The unit price of RYO tobacco has been increasing steadily for some time, due to high and increasing taxes.

THE ROLE AND EFFECT OF CANNABIS/MARIJUANA

DISTRIBUTION

COMPETITIVE LANDSCAPE
Smoking tobacco is highly concentrated in the Netherlands, with Imperial Tobacco Netherlands being the largest manufacturer with a 53% share in 2010. Imperial Tobacco markets leading domestic brands with a long-established presence and popularity among Dutch consumers such as Drum and Van Nelle.

NEW PRODUCT DEVELOPMENTS
Summary 16 Smoking Tobacco - New Product Launches

PROSPECTS
Sales of smoking tobacco will follow the general trend for the tobacco market in the Netherlands with volumes expected to continue falling over the forecast period. Intensified campaigns to lure consumers to stop or avoid smoking coupled with fiscal measures aimed at creating further barriers for consumers to buy tobacco through higher prices are seen as threatening issues.

CATEGORY DATA
Table 62 Sales of Smoking Tobacco by Category: Volume 2005-2010
Table 63 Sales of Smoking Tobacco by Category: Value 2005-2010
Table 64 Sales of Smoking Tobacco by Category: % Volume Growth 2005-2010
Table 65 Sales of Smoking Tobacco by Category: % Value Growth 2005-2010
Table 66 Company Shares of RYO Tobacco 2006-2010
Table 67 Brand Shares of RYO Tobacco 2007-2010
Table 68 Company Shares of Pipe Tobacco 2006-2010
Table 69 Brand Shares of Pipe Tobacco 2007-2010
Table 70 Sales of Smoking Tobacco by Distribution Format: % Analysis 2005-2010
Table 71 Forecast Sales of Smoking Tobacco by Category: Volume 2010-2015
Table 72 Forecast Sales of Smoking Tobacco by Category: Value 2010-2015
Table 73 Forecast Sales of Smoking Tobacco by Category: % Volume Growth 2010-2015
Table 74 Forecast Sales of Smoking Tobacco by Category: % Value Growth 2010-2015