Tobacco in Italy

Tobacco in 2024: The big picture

Sales of tobacco in Italy increased in current value terms in 2024 although more moderately compared to previous year. Consumers suffered a decline in disposable income due to high inflation and geopolitical uncertainty triggered by the ongoing impact of Russia’s invasion of Ukraine, which led to rising electricity and heating costs. Nevertheless, smoking prevalence remained relatively high, especially among men. Italy’s ageing and declining population did, however, lead to a reduction in the number of smokers. Furthermore, younger consumers showed more interest in e-vapour products than traditional tobacco products such as cigarettes. As a result, cigarettes are increasingly relying on older smokers to sustain sales. This pattern is having a negative impact on tobacco specialists and authorised retailers for traditional tobacco products. These retailers are becoming less relevant for consumers in Italy and have seen a decline in the volume of in-store traffic which has impacted sales of their other products too, besides tobacco.

2024 key trends

Sales of traditional tobacco products such as cigarettes continued to be negatively impacted by next generation products in 2024, especially e-vapour products, which are highly favoured by younger consumers. Sales of new generation tobacco products were being fuelled by social media and the influence of friends during 2024. However, confusion around regulations on e-vapour products has led to trade associations within the traditional tobacco space calling for tougher regulations such as the ban on online sales for e-vapour products that was enacted in 2025.

Competitive landscape

Philip Morris holds a strong lead in cigarettes in Italy, with Marlboro being number one brand in volume terms, with it also being the most counterfeited brand in terms of illicit cigarettes. The company also continued to dominate sales of heated tobacco products in 2024 with its HEETS Iqos brand. Furthermore, in 2024 Philip Morris also launched its Iqos Iluma line of tobacco heating devices in March, followed by Iqos Iluma I Prime in October. This new product line is equipped with advanced functionalities such as a new touch screen allowing for access to information on the smoking experience, a pause mode to stop and restart smoking later, as well as the brand’s trademarked heating technology called Smartcore Induction System. Philip Morris also launched new heated tobacco sticks under its Delia Classic Red and Classic Gold brands, these new lines of heated tobacco were sold for under the EUR5, which is the figure that is seen as the threshold at which many consumers are willing to pay for heated tobacco.

Retail developments

The sale of traditional tobacco products in Italy is limited to physical stores owning a license that is issued by the Customs and Monopolies Agency (ADM), with the decision to issue a license based on the number of inhabitants of a specific area and the distance from already existing competitors. Qualifying channels include both tobacco specialists and small local grocers as well as vending in bars and cafés. Sales of e-vapour products do not fall under the same regulations and there are fewer controls on their distribution. Tobacco specialists are seeing their business revenues from core tobacco products declining and this is why they are battling through their trade organisations to ensure that e-vapour products face the same restrictions on their distribution as traditional tobacco products. For the same reason, the government faced pressure to ban online sales of e-vapour products, with this ban coming into force on 1 January 2025 for all products containing nicotine. However, online sales of nicotine-free e-vapour products are still allowed. Considering that the majority of e-liquids available in the market include nicotine, many brands within the e-liquids space are launching nicotine-free alternatives of their best-selling flavours in order to sustain their online sales.

What next for tobacco?

Overall sales of tobacco are projected to decline in value (at constant 2024 prices) and volume terms over the forecast period. Nonetheless, e-vapour products and heated tobacco products are expected to see steady growth to the detriment of traditional combustible tobacco products such as cigarettes, cigars, and cigarillos. Interest towards rechargeable products will likely continue to thrive, driven by younger demographics, and by the fact that they cost less in comparison to disposable alternatives. Disposable alternatives are also increasingly being scrutinised for their impact on the environment and the quantity of waste they are responsible for.