Tobacco in Thailand

Tobacco in 2024: The big picture

The overall tobacco market continued its downward trend in Thailand in 2024, marking several consecutive years of decline following the introduction of the new excise tax. The significant price increases resulting from the tax appear to have reduced consumer demand, particularly amongst lower-income groups. This shift has also contributed to the rapid expansion of the illicit tobacco market, as consumers have sought less expensive alternatives. Moreover, the growing popularity of e-cigarettes has further taken away demand from traditional tobacco products. Although e-cigarettes remain illegal in Thailand, these products seem to be widely available through informal channels. Quik 6000 Puffs, for example, are sold both in physical stores and online at only THB240, which makes enforcement of regulations difficult. Public health campaigns, increased awareness of smoking-related risks, and shifting consumer preferences, especially amongst younger demographics, have also played a role in speeding up the decline in legal tobacco sales.

2024 key trends

Volume sales of tobacco fell in Thailand in 2024. During the year, Thailand increased tobacco taxes and implemented stricter regulations on cigarette imports to reduce smoking. The rise in excise taxes caused retail prices to go up by 10-15%, which led to a decrease in cigarette consumption, particularly amongst low-income individuals and young people. Although some smokers shifted to alternatives such as roll-your-own tobacco, stronger enforcement helped to limit the growth of the illicit trade. At the same time, tighter import controls such as more restrictive licensing and plain packaging laws resulted in a significant drop in legal cigarette imports. Domestic brands saw an increase in market share, but overall smoking rates continued to decline. While tax revenue per pack increased, the total revenue from tobacco taxes grew only slightly due to lower overall sales, suggesting that the government is emphasising public health over revenue from tobacco.

Competitive landscape

The Tobacco Authority of Thailand was the leading company within tobacco overall in 2024. The company, which produces the SMS, Krongthip and Wonder S brands, saw an increase in volume share during the year. This growth was largely driven by a significant price gap between imported and local cigarette brands. As imported cigarettes became more expensive due to higher taxes and stricter regulations, many consumers shifted towards more affordable local options. The Tobacco Authority of Thailand responded by increasing its focus on economy brands such as SMS, Krongthip, and Wonder S, which appealed to price-sensitive smokers. The company's strategic emphasis on low-cost products, combined with the sharp decline in imported brand availability, enabled it to capture a larger share of the market and strengthen its position in Thailand's tobacco industry in the final year of the review period. Given that the majority of leading players in cigarettes are global companies like Philip Morris, the rising tax (and therefore unit price) and the price sensitivity of consumers that led to a shift to cheaper products benefited the Tobacco Authority of Thailand as a local producer with a strong economy offer.

Retail developments

Small local grocers remains the leading distribution channel for tobacco products in Thailand in 2024. These traditional outlets have built a strong community presence, particularly in rural areas, providing personalised service and flexible purchasing options such as selling single sticks, which appeal to price-sensitive smokers. In regions where modern retail formats are less accessible, small local grocers serve as a vital access point for tobacco products, especially economy brands and fine cut tobacco. The capacity of these retailers to adapt to particular local consumer habits and their lower operating costs have enabled them to respond quickly to changing market conditions, helping to ensure their role as a key player in Thailand’s evolving retail landscape in tobacco.

What next for tobacco?

The tobacco market in Thailand is undergoing a significant shift driven by rising excise taxes, changing consumer preferences, and stricter regulations. As cigarette prices climb, many smokers are turning to more affordable alternatives such as roll-your-own tobacco, though this trend could reverse if low-priced legal cigarettes from the Tobacco Authority of Thailand succeed. Despite a ban on online tobacco sales and e-cigarettes, demand persists through informal channels, especially amongst younger and price-sensitive consumers. Flavoured and capsule cigarettes are gaining in popularity as substitutes for vaping. While premium segments such as cigars and cigarillos have struggled due to reduced tourism, a rebound in international travel may support recovery. Moving forward, the market will be shaped by price competitiveness, regulatory enforcement, and the ability of companies to adapt to evolving consumer behaviour.