Tobacco in 2024: The big picture
In 2024, Portugal’s tobacco market benefited from by a positive economic environment, influenced by legislative reforms, including reductions in personal income tax that positively impacted net salaries. These measures were accompanied by wage increases in the private sector and salary adjustments across various public sector roles. However, rising housing prices and high cost of living made consumers more cautious in their spending habits, with a shift towards lower-priced options.
2024 key trends
Tobacco volume sales in Portugal grew in 2024, thanks to strong demand for non-combustible alternatives, which offset declines in traditional cigarettes. Heated tobacco products maintained stable pricing, making them a cost-effective choice, supported by lower-cost brands like PMI’s Delia for IQOS. At the same time, companies such as PMI and BAT innovated by launching new flavoured, non-tobacco options compatible with heated devices. The evolving e-vapour products market also attracted new entrants, reflecting ongoing diversification away from combustible tobacco. Additionally, a surge in tourism boosted consumption, particularly within newer product categories.
Competitive landscape
Tabaqueira SA Empresa Industrial de Tabacos SA, a subsidiary of Philip Morris International Inc (PMI), remained the leading player in Portugal’s tobacco market in 2024. Its dominance is supported by a strong presence across nearly all industry categories and continuous investment in innovation. Tabaqueira increased its market share during the year, driven by the significant growth of heated tobacco, where it holds a leading position, as well as by its successful entry into flavoured tobacco-free oral nicotine, as well as e-vapour products with Veev One and Veev Now in both disposable and rechargeable closed-system formats.
Retail developments
Grocery retailers - including forecourt retailers, food/drink/tobacco specialists, and small local grocers - emerged as the leading channel for tobacco sales in Portugal. Their broad geographic presence across the country makes them highly accessible, offering consumers convenience along with a wide range of brands. Forecourt retailers benefited from the convenience of allowing consumers to purchase tobacco while refuelling their vehicles, combined with the option to pay by card - an advantage not always available in smaller tobacco specialist shops, particularly for low-value purchases like a single pack of cigarettes. Forecourts also often allow bulk purchases (such as cartons of 10 packs) and are favoured for their extended opening hours, offering additional flexibility to consumers.
What next for tobacco?
Tobacco sales in Portugal are expected to register modest growth in constant value terms (at 2024 prices) over the forecast period. This will be primarily driven by rising average unit prices - largely due to tax increases and higher raw material costs - as well as market diversification into alternative nicotine products. Cigarettes, still the dominant category by volume, will continue to decline due to increasing health concerns and the expanding availability of reduced-risk alternatives. Indeed, the industry is expected to intensify efforts to transition consumers away from combustible tobacco towards novel nicotine delivery systems, with a particular focus on heated tobacco, closed-system e-vapour devices, and nicotine pouches.
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Overview:
Understand the latest market trends and future growth opportunities for the Tobacco industry in Portugal with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
Key trends are clearly and succinctly summarised alongside the most current research data available. Understand and assess competitive threats and plan corporate strategy with our qualitative analysis, insight and confident growth projections.
Data and analysis in this report provides further detailed coverage dedicated to the following key categories, where applicable:
- Cigarettes
- Cigars, Cigarillos and Smoking Tobacco
- Smokeless Tobacco, E-Vapour Products and Heated Tobacco
If you're in the Tobacco industry in Portugal, our research will help you to make informed, intelligent decisions; to recognise and profit from opportunity, or to offer resilience amidst market uncertainty.
The Tobacco in Portugal report includes:
- Analysis of key supply-side and demand trends
- Detailed segmentation of international and local products
- Historic volume and value sizes, company and brand market shares
- Five year forecasts of market trends and market growth
- Robust and transparent research methodology, conducted in-country
This report answers:
- What is the market size of Tobacco in Portugal?
- Which are the leading brands in Tobacco in Portugal?
- How are products distributed in Tobacco in Portugal?
- Which category is the most heavily taxed in Portugal?
- How is the operating environment for Tobacco changing?
- What are the current legislative restrictions applicable to the sale of Tobacco products in Portugal?
- How has COVID-19 impacted demand?
- How have national lockdown and enforced home seclusion following COVID-19 impacted sales?
- Where is future growth expected to be most dynamic?
Tobacco in Portugal
Tobacco in 2024: The big picture
2024 key trends
Competitive landscape
Retail developments
What next for tobacco?
Legislation
Legislative overview
Minimum legal smoking age
Smoking prevalence
Plain packaging
Point-of-sale display bans
Flavoured tobacco product ban
Vapour products
PRODUCTION/IMPORTS/EXPORTS
DISCLAIMER
Cigarettes in Portugal
KEY DATA FINDINGS
Cigarettes continues its declining trend
Tabaqueira remains dominant player
Vending machines lead cigarettes sales
Continued decline in cigarette sales driven by shift to non-combustible alternatives
Expected further limitations over purchase and smoking areas
Innovation in alternatives are set to affect cigarretes sales
Taxation rates
Average cigarette pack price breakdown
Cigars, Cigarillos and Smoking Tobacco in Portugal
KEY DATA FINDINGS
Competitiveness declines, following excise tax revision
Market is increasingly concentrated in hands of top selling brands
Rise of smoking alternatives reduces space in retailers
Ongoing decline, as consumers shift to new tobacco formats
Alternatives to combustible smoking will gain traction
Limited innovation expected, as focus shifts to high-growth alternatives
Smokeless Tobacco, E-Vapour Products and Heated Tobacco in Portugal
KEY DATA FINDINGS
Heated tobacco and e-vapour products see surge in sales amid manufacturer investment and rising cigarette costs
PMI’s Tabaqueira keads market through innovation and strategic expansion
Retail landscape shifts to support growth of next generation tobacco products
Heated tobacco poised for robust growth as e-vapour products navigate regulatory and market pressures
Portuguese government will attempt to balance public health concerns, consumer freedoms, and the fiscal impact of tobacco tax revenues
Nicotine pouches will benefit from increased investment
The following categories and subcategories are included:
Tobacco
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- Fine Cut Cigarettes
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- Cigarettes (Illicit+Legal)
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- Cigars
- Cigarillos
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- Pipe Tobacco
- Fine Cut Tobacco
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- Chewing Tobacco
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- Loose US-Style Moist Snuff
- Portion US-Style Moist Snuff
- Swedish-Style Snus
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- Closed System Single Use
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- Closed System Rechargeable (including starter kits)
- Closed System Cartridges
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- Open Vaping Systems Charging and Vapourising Devices
- E-liquids
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- Tobacco Heating Devices
- Heated Tobacco
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- Nicotine Pouches
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- Closed System Single Use (Illicit+Legal)
- Closed System Cartridges (Illicit+Legal)
- E-Liquids (Illicit+Legal)
Tobacco
Passport Tobacco covers the seven major tobacco categories: Cigarettes, Cigars & Cigarillos, Smoking tobacco (made up of Pipe tobacco and RYO tobacco), Smokeless Tobacco (snuff and chewing tobacco), E-Vapour Products (closed and open); Heated Tobacco; and Tobacco Free Oral Nicotine. Smoking paraphernalia such as pipes, rolling papers, lighters or matches, etc., are not included, nor are nicotine replacement therapy (NRT) products, which are part of Euromonitor's Passport Consumer Healthcare database.
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This report originates from Passport, our Tobacco research and analysis database.
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