Market

The largest single segment of the global tobacco market is cigarettes, a category in which Swedish Match does not compete. Instead, the Company actively develops and sells smokeless tobacco products such as snus, a growing category, with the aim to reduce global cigarette consumption and replace the use of cigarettes with smokeless products.

Cigarettes account for roughly 90 percent of all tobacco consumed globally.1) Large global tobacco companies rely on cigarettes for the bulk of their revenues and profits. Generally, cigarette consumption has been declining over the past decade in most developed ­countries, while in many emerging markets, cigarette consumption has continued to increase.1) Other smoking products sold globally include fine-cut and roll-your-own tobaccos, cigars, and pipe tobacco. Recently, there has been an emergence of the e-cigarette category in certain markets which generally contain nicotine but no tobacco. There is also a small but emerging category of “heat-not-burn” tobacco products.

Smokeless tobacco products primarily include snus, moist snuff, various forms of chewing tobacco, as well as niche products, such as dissolvables and nasal tobacco. Smokeless tobacco is a small but growing tobacco category compared to cigarettes, and is consumed in many parts of the world in different types and formats. In Scandinavia, the dominant form of smokeless tobacco is snus. In Sweden, for example, the number of snus users has been growing and has ­surpassed the number of cigarette users.2)
In the US, snus is a small but growing segment, while the dominant forms of smokeless tobacco are moist snuff and chewing tobacco. In other parts of the world, such as India and certain countries in Africa and Asia, local variants of oral and nasal smokeless tobacco products are consumed in relatively large volume. In the European Union and certain other countries, snus and other oral tobacco products not intended to be chewed or smoked are prohibited, while chewing tobacco products are allowed to be sold.

The global tobacco market is exposed to ever-increasing levels of restrictions and ­regulations, as governments and other regulatory and non-governmental organizations seek to reduce tobacco consumption, and, most notably, cigarette consumption. These regulations, along with taxation measures, have had impacts on tobacco growing, tobacco production, product availability, packaging and labeling, consumer pricing, and location of use.

1) Source: Euromonitor.
2) Source: Ipsos Sweden, Market Report, 2014.

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