This report assesses the business environment in Uruguay, focusing on the regulatory environment, stability of the financial system, FDI intake, labour market flexibility and skillset, trade openness, mobility infrastructure, ICT adoption and innovative capabilities. Companies can evaluate these factors to understand the strengths and weaknesses of a country’s business environment for better strategic investment decisions.

The report examines the economic landscape of Uruguay and provides information on major monetary indicators, foreign trade and government finance. The economy expanded in real terms in 2024, driven by exports, private consumption and government spending. However, a global economic slowdown, increasing geopolitical tensions and economic fragmentation as well as tight financial conditions pose risks to the country’s economic outlook.

Sugar confectionery is expected to register healthy current value and volume growth in Uruguay in 2025, largely supported by the popularity of gummies and jellies. There is significant innovation in gummies and jellies and they are particularly popular with children and players use bright, colourful, eye-catching packaging designs to engage consumers. The playful shapes, such as gummy bears or jelly babies, also add a sense of fun. In particular, more sour flavours are increasingly popular, and

While gum is expected to register healthy current value growth in in Uruguay in 2025, volume growth is expected to be minimal. There are several reasons for the muted volume sales. One being that with more people working from home post pandemic, there is not the same demand, as consumers often consume gum in the office as a breath freshener. However, gum also increasingly has a bad reputation, and is seen as bad for dental health, especially those that are high in sugar. Its non-biodegradable pr

In spite of significant price hikes, driven by poor harvests of cocoa beans globally and limited supply, chocolate confectionery is expected to register both healthy current value and volume growth in Uruguay in 2025. Part of the positive performance was due to promotions, as supermarket retailers had high levels of stock and offered generous promotions to push sales. However, once stocks reach normal level, players may need to adopt other strategies to support sales, including offering smaller

Savoury snacks is expected to register positive current value and moderate volume growth in 2025 in Uruguay. Several factors contribute to growth, including reduced cross-border shopping in Argentina, following the appreciation of the Argentine peso, which has reduced the price differential in a positive direction. While savoury biscuits, followed by potato chips, account for most value sales, nuts, seeds and trail mixes are expected to register the highest value growth. This is due to their hea

Sweet biscuits, fruit snacks and snacks bars is expected to register healthy current value and more modest volume growth in 2025 in Uruguay. Sweet biscuits, and in particular alfajores (filled biscuits), account for the main proportion of sales and it is a mature product area and this dampens volume growth to an extent. Generous promotions, such as from brand leader Portezuelo, support volume sales. There also continues to be regular new product launches, such as the recently launched gluten-fr

It is expected to be a positive year for snacks in Uruguay in 2025, with healthy current value growth, supported by an improving economy and the continuing easing of inflation. In addition, there has been a significant fall off in cross-border shopping in Argentina, and this is expected to boost overall volume sales. This was due to a steep currency appreciation of the peso in Argentina after the election of president Javier Milei. The newly appreciated currency made products in Argentine peso m

Ice cream in Uruguay is expected to register both healthy current value and volume growth in 2025. Increasing tourist numbers, including from Argentina, supports value sales. With the appreciation of the Argentine peso, Uruguay is seen as less expensive, and this leads to increasing visitor numbers. Take-home ice cream accounts for more values sales than impulse ice cream and is also expected to register higher volume growth in 2025. Impulse ice cream is mainly sold through the summer months, wh

Insight into income, wealth and expenditure of consumers and households is vital in helping businesses make strategic decisions with regards to which country (or even which region within a country) to enter, which consumer segment to target, which products or services to market, and at which price point. Other factors such as the size and expansion of the middle class and income inequality are also important in helping companies gauge the potential of a country market.

Wine in Uruguay faced multiple headwinds in 2024, including a poor harvest driven by an exceptionally dry climate and the drought of 2023. Volume sales fell significantly both off-trade and on. Local producers, whose output comprised over two thirds of low-quality table wine in total volume sales, saw their competitiveness erode as prices remained too high to match the value proposition of imports. Consequently, many consumers shifted to higher-quality offerings from Argentina and Chile. Post-pa

Though overall spirits recorded rises in both volume and value terms in Uruguay in 2024, different members faced different fortunes, with some subcategories struggling. Whiskies was a notable example. Bourbon/other US whiskey, Irish whiskey, blended malt Scotch whisky and other whiskies suffered deep falls in the off-trade and on-trade sectors. Whiskies is the largest spirits subcategory in Uruguay with one of the world’s highest litres-per-capita consumption rates. Mature in profile and declini

Alcoholic drinks in Uruguay was heavily impacted by the country’s economic context in 2024. The economy showed greater dynamism and gross domestic production grew. Boosting local industry is the favourable exchange rate with Argentina. Small-scale contraband decreased notably during 2024, and so the attractiveness of buying products in Argentina also diminished (though this neighbouring country will continue to be cheaper than Uruguay). As a result, a substantial proportion of alcoholic drinks s

2024 saw cider/perry fall further in terms of volume sales in Uruguay. Over the past 15 years cider has steadily lost share among local alcoholic drink options as consumers increasingly seek more sophisticated beverages. Producers have relied on pricing to compete, establishing cider as an economical drink available in large accessible formats but lacking refinement. In a market where the quality and diversity of alcoholic beverages have risen, cider/perry’s appeal has diminished: its volume has

Total volume sales for beer in Uruguay fell for the third consecutive year in 2024 as consumers moderated their alcohol intake for health reasons, cutting spending by drinking less and favouring premium options. Uruguayan consumers have established a more moderate relationship with alcohol, shifting towards healthier alternatives such as bottled water and lower-alcohol beverages. High living costs - among the highest in the region - have further reinforced this trend, prompting consumers to reas

RTDs was one of the biggest winners in the Uruguayan alcoholic drinks industry in 2024. Although it remains the smallest of the five main alcoholic drinks categories by volume, its appeal among young adults at social gatherings, bars, pubs and nightclubs drove robust demand throughout the year. High unit prices compared with mixing spirits and soft drinks have confined consumption to more affluent urban consumers willing to pay a premium for convenience and innovation.

Uruguay’s economy remained relatively stable in 2024, in contrast to ongoing economic turmoil in neighbouring Argentina. Despite this, the country’s tobacco industry continued to face considerable challenges, including stringent tobacco control legislation and a high tax burden. These factors drove a notable rise in illicit cigarette consumption, with illegal products accounting for over one third of total cigarette volume sales in 2024 - a marked increase compared to previous years. However, th

Uruguay’s economy remained relatively stable in 2024, in contrast to ongoing economic turmoil in neighbouring Argentina. Despite this, the country’s tobacco industry continued to face considerable challenges, including stringent tobacco control legislation and a high tax burden. These factors drove a notable rise in illicit cigarette consumption, with illegal products accounting for over one third of total cigarette volume sales in 2024 - a marked increase compared to previous years. However, th

Sales of cigars, cigarillos, and smoking tobacco experienced positive volume growth in Uruguay in 2024. Cigarillos benefitted from the appreciation of the Argentine peso, which led to a decline in small-scale contraband from Argentina. Additionally, the increasingly negative social perception of cigarette smokers contributed to some consumers shifting towards cigarillos, which are often viewed as more socially acceptable or sophisticated.

The market for smokeless tobacco, e-vapour products and heated tobacco failed to record any measurable sales in Uruguay in 2024. Heated tobacco products were still unavailable in the country, despite receiving a regulatory green light in March 2021. Uruguay's strict anti-tobacco legislation, small market size, and low regional demand have made the country a less attractive destination for major multinational companies such as Philip Morris International and British American Tobacco. Moreover, al

The number of households is set to increase slightly, while the average household size will remain unchanged in Uruguay over 2024-2029. Single person households will remain the dominant household type but the fastest household expenditure growth is forecast to be recorded by couples without children. In addition, the share of households living in urban areas is projected to expand to 96.3% by 2029.

Having declined in 2023, retail current value sales of hair care rebounded sharply in 2024, with shampoos remaining both the largest and most dynamic category, with demand for standard shampoos particularly strong. Demand was boosted by an increase in disposable income and easing inflationary pressure, as well as a decrease in cross-border shopping and smuggling from neighbouring Argentina after the government of the latter country initiated a reform of its exchange-rate regime. There was a noti

Retail current value sales of colour cosmetics continued to surge in Uruguay during 2024. A key factor behind this was a decrease in purchases by Uruguayan consumers in neighbouring Argentina, along with a reduction in smuggling from Argentina to Uruguay. This decline in contraband purchases can be attributed to an exchange rate adjustment made by the Argentine government, which significantly reduced the incentive for Uruguayan consumers to buy products from abroad or those illegally imported fr

Retail current value sales of fragrances accelerated sharply in 2024, making the category the top performer across beauty and personal care in Uruguay. Thanks to the country's economic stability, real household incomes expanded during the year. This has had a particularly beneficial impact on premium fragrances. There is also a trend towards more personalised products, with a growing number of local consumers seeking customisable fragrance options that allow them to create scents tailored to ind