Tobacco in 2024: The big picture
Tobacco volume sales returned to growth in Sri Lanka in 2024 after a significant decline in the previous year. Value sales rose significantly faster than volumes during 2024 as a result of the government's more aggressive tax policies, which have increased costs and decreased demand. Ceylon Tobacco Company (CTC) continues to hold monopoly status in the market, with the John Player Gold Leaf brand dominating. The illegal trade, primarily suitcase cigarettes, and the unregulated beedi sector, which matches cigarette volumes because of its accessibility and inexpensive prices, complicates the whole picture.
2024 key trends
The tobacco sector in Sri Lanka had difficulties in 2024 as a result of stringent laws, significant inflation, and shifting customer preferences. Although CTC remained dominant, rising prices exerted a downward pressure on demand, especially amongst lower-income populations. E-vapour products remained marginal in the market at the end of the review period due to regulatory uncertainty, lack of clear import guidelines, and limited public awareness. While there is growing curiosity in urban areas, legal ambiguity and enforcement gaps have stifled formal market development.
Competitive landscape
The emergence of beedi and suitcase cigarettes challenged CTC's market dominance in 2024 even though it remained the legal monopoly. The John Player Gold Leaf brand continued to dominate, while premium brands like Benson & Hedges showed slower movement. Meanwhile, Capson managed to retain the loyalty of smokers with lower incomes.
Retail developments
Tobacco sales are mostly dependent on well-established networks of shops, primarily small local grocers, with little room for dramatic changes in the retail landscape because of the lack of options for product display and advertising. However, the volume throughput of these outlets has been impacted by customers trading down to less expensive options and economic distress. Some stores reported lower foot traffic as a result of affordability worries towards the end of the review period.
What next for tobacco?
While tobacco volume sales are set to continue to rise slowly over the forecast period, the long-term expectation is that tobacco use will decline as a result of the ongoing tightening of regulatory restrictions, increased anti-smoking programmes, and anticipated restrictions on e-cigarettes and other nicotine products. Inflation-driven price hikes are expected to drive value growth ahead of the rise in volumes. As legal tobacco becomes more expensive, the illicit trade, including smuggled cigarettes, beedis, and unregulated smokeless tobacco, is expected to expand, especially in rural and low-income areas. Baggage imports and cross-border smuggling will continue to undermine legal sales, prompting calls for stronger customs enforcement.
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Overview:
Understand the latest market trends and future growth opportunities for the Tobacco industry in Sri Lanka 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 Sri Lanka, 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 Sri Lanka 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 Sri Lanka?
- Which are the leading brands in Tobacco in Sri Lanka?
- How are products distributed in Tobacco in Sri Lanka?
- Which category is the most heavily taxed in Sri Lanka?
- How is the operating environment for Tobacco changing?
- What are the current legislative restrictions applicable to the sale of Tobacco products in Sri Lanka?
- 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 Sri Lanka
Tobacco in 2024: The big picture
2024 key trends
Competitive landscape
Retail developments
What next for tobacco?
Legislation
Sales of e-vapour products are prohibited in Sri Lanka.
TAXATION AND DUTY LEVIES
DISCLAIMER
Key Data Findings
2024 Developments
Slight volume growth after year of significant decline
Ceylon Tobacco Company retains monopoly status
Informal sector poses growing threat
Prospects and Opportunities
Health initiatives, regulatory issues and affordability to limit growth
Grey market likely to grow
Limited innovation within cigarettes
Category Data
Key Data Findings
Affordability remains a major obstacle to development
Local production of cigars destined for export
Beedi industry remains poorly controlled
Prospects and Opportunities
Little potential for expansion
Beedi smoking expected to increase
Need to respond to both consumer demand and government restrictions
Category Data
2024 Developments
Thriving underground market
Emergence of numerous players
Popularity of betel chewing tobacco means little demand for packaged smokeless tobacco products
Prospects and Opportunities
Challenges surrounding taxation, smuggling and legal issues
Need to navigate regulatory complexities
Falling demand for traditional smokeless tobacco
Category Data
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.
See all of our definitionsWhy buy this report?
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This report originates from Passport, our Tobacco research and analysis database.
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