Sample Report Tobacco

8/12/2019 Sample Report Tobacco

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W W W . E U R O M O N I T O R . C O M SAMPLE REPORT FOR ILLUSTRATION ONLY

E u r o m o n i t o r I n t e r n a t i o n a l

LIST OF CONTENTS AND TABLES

Tobacco in Israel - Industry Overview ............................................................................................ 1Executive Summary ........................................................................................................................ 1

Tobacco Witnesses Strong Retail Value Sales Growth in 2010 ................................................ 1New Legislation Increases Cigarette Taxation in 2010 .............................................................. 1Local Manufacturer Dubek Witnesses the Largest Decline in Retail Volume Sales Share in

2010 ............................................................................. ................................................................ 1Vending Machines Are Expected To Slowly Disappear From Tobacco in Israeli ...................... 1Retail Value Sales Are Expected To See Positive Growth Over the Forecast Period ............... 1

Operating Environment ............................................................................. ...................................... 2

Legislative Overview/ Fctc Ratification ....................................................................................... 2

Summary 1 Legislation Summary at a Glance .................................................................. 4

Minimum Legal Smoking Age ..................................................................................................... 5Smoking Prevalence ................................................................................................................... 5

Table 1 Smoking Prevalence in Adult Population 2005-2010 .................................... 6

Table 2 Number of Smokers by Gender 2005-2010 ................................................... 6Tar Levels ......................................................................................... ........................................... 7Health Warnings ............................................................................. ............................................. 7Advertising & Sponsorship .......................................................................................................... 7Point-of-sale Display Bans .......................................................................................................... 8Smoking in Public Places .......................................................................................... .................. 8Electronic Cigarettes ................................................................................................................... 9Litigation ...................................................................................................................................... 9Death by Cause .............................................................................. ........................................... 10

Table 3 Death by Cause 2005-2010 ......................................................................... 10

Taxation and Pricing ..................................................................................................................... 11

Duty Paid Packet Marks ................................................................................... ......................... 11

Taxation Rates .......................................................................................................................... 11Table 4 Taxation and Duty Levies 2005-2010 .......................................................... 11

Average Cigarette Pack Price Breakdown ............................................................................... 12

Table 5 Average Cigarette Pack Price Breakdown: Brand Examples 2010 ............ 12

Production/imports/exports ........................................................................................... ................ 12

Table 6 Production/Imports/Exports 2005-2010 ....................................................... 13

Illicit Trade in Cigarettes ................................................................................... ......................... 13Market Indicators........................................................................................................................... 13

Table 7 Illicit Trade Estimate of Cigarettes by Volume 2005-2010 .......................... 13

Market Data ....................................................................................... ............................................ 14

Table 8 Sales of Tobacco by Category: Volume 2005-2010 .................................... 14

Table 9 Sales of Tobacco by Category: Value 2005-2010 ....................................... 14Table 10 Sales of Tobacco by Category: % Volume Growth 2005-2010 ................... 14Table 11 Sales of Tobacco by Category: % Value Growth 2005-2010 ...................... 15Table 12 Forecast Sales of Tobacco by Category: Volume 2010-2015 .................... 15Table 13 Forecast Sales of Tobacco by Category: Value 2010-2015........................ 15


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Table 14 Forecast Sales of Tobacco by Category: % Volume Growth 2010-2015 ............................................................................................................. 15

Table 15 Forecast Sales of Tobacco by Category: % Value Growth 2010-2015 ...... 16

Definitions...................................................................................................................................... 16

Summary 2 Research Sources ................................................................................ ........ 16

Tobacco in Israel - Company Profiles ........................................................................... ................ 18Devidas Group Ltd in Tobacco (israel) ......................................................................................... 18

Strategic Direction .......................................................................... ........................................... 18Key Facts................................................................................................................................... 18

Summary 3 Devidas Group Ltd: Key Facts ..................................................................... 18

Company Background ...................................................................................... ......................... 18Production ................................................................................................................................. 18Competitive Positioning .................................................................................... ......................... 19

Summary 4 Devidas Group Ltd: Competitive Position 2010 ........................................... 19

Dubek Ltd in Tobacco (israel) ..................................................................................... .................. 19

Strategic Direction .......................................................................... ........................................... 19

Key Facts................................................................................................................................... 19Summary 5 Dubek Ltd: Key Facts ................................................................................... 19

Company Background ...................................................................................... ......................... 20Production ................................................................................................................................. 20

Summary 6 Dubek Ltd: Production Statistics 2010 ......................................................... 20

Competitive Positioning .................................................................................... ......................... 20

Summary 7 Dubek Ltd: Competitive Position 2010 ........................................................ 21

Globrands Ltd in Tobacco (israel)................................................................................................. 21

Strategic Direction .......................................................................... ........................................... 21Key Facts................................................................................................................................... 21

Summary 8 Globrands Ltd: Key Facts ............................................................................ 21

Company Background ...................................................................................... ......................... 22Production ................................................................................................................................. 22Competitive Positioning .................................................................................... ......................... 22

Summary 9 Globrands Ltd: Competitive Position 2010 .................................................. 22

Cigarettes in Israel - Category analysis ........................................................................................ 24Headlines ...................................................................................................................................... 24Trends ........................................................................................................................................... 24Competitive Landscape ................................................................................................................ 26New Product Developments ......................................................................................................... 27

Summary 10 Cigarettes - New Product Launches ............................................................ 27

Distribution .................................................................................................................................... 27Prospects ...................................................................................................................................... 28

Sector Background ....................................................................................................................... 29Cigarettes: Price Bands ............................................................................................................ 29

Summary 11 Cigarette Price Band Definitions .................................................................. 29

Cigarettes: Menthol/standard .................................................................................................... 30Cigarettes: Filter/non-filter ................................................................................... ...................... 30


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Cigarettes: Carbon/standard Filter ......................................................................................... ... 30Cigarettes: Filter Length ................................................................................... ......................... 30Cigarettes: Slims/superslims Vs Regular.................................................................................. 31Cigarettes: Pack Size ..................................................................... ........................................... 31Cigarettes: Pack Type ......................................................................................... ...................... 31

Category Data ............................................................................................................................... 31Table 16 Sales of Cigarettes by Tar Level: Volume 2005-2010 ................................. 31Table 17 Sales of Cigarettes by Tar Level: Value 2005-2010 .................................... 32Table 18 Sales of Cigarettes by Tar Level: % Volume Growth 2005-2010 ................ 32Table 19 Sales of Cigarettes by Tar Level: % Value Growth 2005-2010 ................... 32Table 20 Sales of Cigarettes by Price Band: % Volume Breakdown 2005-2010 ...... 32Table 21 Sales of Cigarettes by Standard/Menthol: % Volume Breakdown

2005-2010 .............................................................................. ...................... 33Table 22 Sales of Cigarettes by Tobacco Type: % Volume Breakdown 2005-

2010 ............................................................................................................. 33Table 23 Sales of Cigarettes by Filter Vs Non-filter: % Volume Breakdown

2005-2010 .............................................................................. ...................... 33Table 24 Sales of Filter Cigarettes by Carbon Vs Non-carbon: % Volume

Breakdown 2005-2010 ................................................................................. 33Table 25 Sales of Cigarettes by Length: % Volume Breakdown 2005-2010 ............. 34Table 26 Sales of Cigarettes by Regular/Slim: % Volume Breakdown 2006-

2010 ............................................................................................................. 34Table 27 Sales of Cigarettes by Pack Size: % Volume Breakdown 2005-2010 ........ 34Table 28 Sales of Cigarettes by Pack Type: % Volume Breakdown 2005-2010 ....... 34Table 29 Cigarettes Company Shares 2006-2010 ..................................................... 34Table 30 Cigarettes Brand Shares 2007-2010 ........................................................... 35Table 31 Sales of Cigarettes by Distribution Format: % Analysis 2005-2010 ............ 36Table 32 Cigarettes: Production, Imports and Exports: Total Volume 2005-2010 ..... 36Table 33 Forecast Sales of Cigarettes by Tar Level: Volume 2010-2015 ................. 37Table 34 Forecast Sales of Cigarettes by Tar Level: Value 2010-2015 .................... 37Table 35 Forecast Sales of Cigarettes by Tar Level: % Volume Growth 2010-

2015 ............................................................................................................. 37Table 36 Forecast Sales of Cigarettes by Tar Level: % Value Growth 2010-

2015 ............................................................................................................. 37Table 37 Forecast Sales of Cigarettes by Price Band: % Volume Breakdown

2010-2015 .............................................................................. ...................... 38Table 38 Forecast Sales of Cigarettes by Standard/Menthol: % Volume

Breakdown 2010-2015 ................................................................................. 38Table 39 Forecast Sales of Cigarettes by Tobacco Type: % Volume Breakdown

2010-2015 .............................................................................. ...................... 38Table 40 Forecast Sales of Cigarettes by Filter Vs Non-filter: % Volume

Breakdown 2010-2015 ................................................................................. 38Table 41 Forecast Sales of Filter Cigarettes by Carbon Vs Non-carbon: %

Volume Breakdown 2010-2015 ................................................................... 38

Table 42 Forecast Sales of Cigarettes by Length: % Volume Breakdown 2010-2015 ............................................................................................................. 39

Table 43 Forecast Sales of Cigarettes by Regular/Slim: % Volume Breakdown2010-2015 .............................................................................. ...................... 39

Table 44 Forecast Sales of Cigarettes by Pack Size: % Volume Breakdown2010-2015 .............................................................................. ...................... 39


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Table 45 Forecast Sales of Cigarettes by Pack Type: % Volume Breakdown2010-2015 .............................................................................. ...................... 39

Cigars in Israel - Category analysis .............................................................................................. 41Headlines ...................................................................................................................................... 41Trends ........................................................................................................................................... 41

Hand-made Versus Machine-manufactured Splits ....................................................................... 42Table 46 Sales of Cigars by Handmade vs Machine-manufactured 2006-2010 ....... 43

Competitive Landscape ................................................................................................................ 43New Product Developments ......................................................................................................... 44Distribution .................................................................................................................................... 44Prospects ...................................................................................................................................... 45Category Data ............................................................................................................................... 45

Table 47 Sales of Cigars by Category: Volume 2005-2010 ....................................... 45Table 48 Sales of Cigars by Category: Value 2005-2010 .......................................... 46Table 49 Sales of Cigars by Category: % Volume Growth 2005-2010 ...................... 46Table 50 Sales of Cigars by Category: % Value Growth 2005-2010 ......................... 46Table 51 Sales of Cigars by Handmade vs Machine Manufactured: % Volume

Breakdown 2005-2010 ................................................................................. 46Table 52 Company Shares of Cigars Excluding Cigarillos 2006-2010 ...................... 47Table 53 Brand Shares of Cigars Excluding Cigarillos 2007-2010 ............................ 47Table 54 Company Shares of Cigarillos 2006-2010 ................................................... 47Table 55 Brand Shares of Cigarillos 2007-2010 ......................................................... 48Table 56 Sales of Cigars by Distribution Format: % Analysis 2005-2010 .................. 48Table 57 Forecast Sales of Cigars by Category: Volume 2010-2015 ........................ 49Table 58 Forecast Sales of Cigars by Category: Value 2010-2015 ........................... 49Table 59 Forecast Sales of Cigars by Category: % Volume Growth 2010-2015 ....... 49Table 60 Forecast Sales of Cigars by Category: % Value Growth 2010-2015 .......... 50

Smoking Tobacco in Israel - Category analysis ........................................................................... 51Headlines ...................................................................................................................................... 51Trends ........................................................................................................................................... 51

the Role and Effect of Cannabis/mar juana .............................................................................. 52Distribution .................................................................................................................................... 53Competitive Landscape ................................................................................................................ 53New Product Developments ......................................................................................................... 54Prospects ...................................................................................................................................... 54Category Data ............................................................................................................................... 54

Table 61 Sales of Smoking Tobacco by Category: Volume 2005-2010 .................... 54Table 62 Sales of Smoking Tobacco by Category: Value 2005-2010........................ 54Table 63 Sales of Smoking Tobacco by Category: % Volume Growth 2005-

2010 ............................................................................................................. 55Table 64 Sales of Smoking Tobacco by Category: % Value Growth 2005-2010 ...... 55Table 65 Company Shares of RYO Tobacco 2006-2010 ........................................... 55Table 66 Brand Shares of RYO Tobacco 2007-2010 ................................................. 55Table 67 Company Shares of Pipe Tobacco 2006-2010 ........................................... 56Table 68 Brand Shares of Pipe Tobacco 2007-2010 ................................................. 56Table 69 Sales of Smoking Tobacco by Distribution Format: % Analysis 2005-

2010 ............................................................................................................. 56Table 70 Forecast Sales of Smoking Tobacco by Category: Volume 2010-2015 ..... 57Table 71 Forecast Sales of Smoking Tobacco by Category: Value 2010-2015 ........ 57


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Table 72 Forecast Sales of Smoking Tobacco by Category: % Volume Growth2010-2015 .............................................................................. ...................... 57

Table 73 Forecast Sales of Smoking Tobacco by Category: % Value Growth2010-2015 .............................................................................. ...................... 58

Smokeless Tobacco in Israel - Category analysis ......... .............................................................. 59

Trends ........................................................................................................................................... 59


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TOBACCO IN ISRAEL - INDUSTRYOVERVIEW

EXECUTIVE SUMMARY

Tobacco Witnesses Strong Retail Value Sales Growth in 2010

Tobacco in Israel witnessed healthy retail value sales growth in 2010. This was largely due to

two main reasons, namely the stable growth of smokers in 2010 with insignificant decreases in

the number of existing smokers, alongside a significant increase in the tax on cigarettes, which

served to increase unit prices dramatically. As cigarettes remained the largest tobacco category,

significant unit price increases, coupled with stagnant retail volume sales growth, helped drive

the development of tobacco as a whole in 2010.

New Legislation Increases Cigarette Taxation in 2010

Tobacco products remained subject to high taxation rates in Israel in 2010. In July 2010, the

tax on cigarettes was raised once again, following the previous tax hike in April 2009. In July

2010, the tax on cigarettes included an ad valorem excise duty of 260.6% on the price to retail,

which means that for every NIS1for the importer out of the price to retail, an excise tax of

NIS2.606 is charged. This ad valorem tax is in addition to the fixed tax of NIS214.5 per 1,000

sticks (NIS4.29 a pack). This new law affects all parties: importers and distributors,

manufacturers and retailers, as well as the consumer. It is important to mention that there is a

minimum tax of NIS475 per 1,000 sticks or NIS9.50 per pack.

Local Manufacturer Dubek Witnesses the Largest Decline in RetailVolume Sales Share in 2010

Dubek, the only local tobacco manufacturer in Israel, tends to carry a wide variety of local and

imported economy brands. In 2010, economy cigarettes suffered a drastic decrease in retail

volume sales, as consumers who previously smoked lower-end economy brands traded up tohigher quality, upper-economy and mid-priced brands, mainly Next, Pall Mall and Winston. This

had a significant negative impact on Dubeks performance.

Vending Machines Are Expected To Slowly Disappear From Tobacco inIsraeli

In late 2010, the Economic Affairs Committee of the Israeli Knesset approved the first reading

of the proposed law to restrict the sale of cigarettes through vending machines in Israel. This

new law is meant to further protect underage teens from smoking. The new law is set to come

into force in 2013. This in turn is expected to have an impact on the distribution of cigarettes in

Israel in the years following its introduction.

Retail Value Sales Are Expected To See Positive Growth Over theForecast Period

Tobacco in Israel is projected to see an ongoing decline in retail volume sales over the

forecast period, driven by further declines in the countrys smoking population. In addition, tough

anti-tobacco legislation, such as the new ban on vending, coupled with further tax increases to

discourage the purchasing of tobacco products, is also expected to weaken demand. However,


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retail value sales are expected to continue to see positive growth over the forecast period,

driven by price increases.

OPERATING ENVIRONMENT

Legislative Overview/ Fctc Ratification

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Source: Euromonitor International

Minimum Legal Smoking Age

Smoking Prevalence




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Male No of SmokersFemale No of SmokersTotal No of Smokers

Source: Calculated using above % prevalence and Euromonitor International Country Population Data

Tar Levels

Health Warnings

Advertising & Sponsorship

Advertising through media




Data removed from sample


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i f i t f 18 S ti i i l i it i t

Advertising through retail point-of-sale

Sponsorship of sporting/music events

y p

Distribution of tobacco branded gifts

Point-of-sale Display Bans

There is currently no point-of-sale (POS) ban in Israel regarding tobacco products.

Smoking in Public Places







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Electronic Cigarettes

Litigation




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Death by Cause

Table 3 Death by Cause 2005-2010

Deaths per 100,000 inhabitants2005 2006 2007 2008 2009 2010

Diseases of therespiratory system

Ischaemic heart diseaseTrachea bronchus and lungDeath from smoking

related diseases

Source: Official statistics





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Average Cigarette Pack Price Breakdown

Table 5 Average Cigarette Pack Price Breakdown: Brand Examples 2010

Price in NISNIS Premium NIS Mid- NIS Economy

Mar boro Priced LD %% L&M %

ManufacturerRetailerSpecific taxAD VVATTotal taxEnd Price

Source: Trade Interviews

PRODUCTION/IMPORTS/EXPORTS





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Table 6 Production/Imports/Exports 2005-2010

Million sticks 2005 2006 2007 2008 2009 2010

Cigarettes - ProductionCigarettes - ImportCigarettes - Export

Source: Euromonitor International from national sta istics

Illicit Trade in Cigarettes

MARKET INDICATORS

Table 7 Illicit Trade Estimate of Cigarettes by Volume 2005-2010

million sticks2005 2006 2007 2008 2009 2010





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Table 11 Sales of Tobacco by Category: % Value Growth 2005-2010

% current value growth2009/10 2005-10 CAGR 2005/10 Total

Cigarettes

CigarsSmoking TobaccoSmokeless TobaccoCigarettes Including RYO Stick

EquivalentTobacco 7.3 3.5 18.9

Source: Euromonitor International from official statistics, trade associations, trade press, company research,store checks, trade interviews, trade sources

Table 12 Forecast Sales of Tobacco by Category: Volume 2010-2015

2010 2011 2012 2013 2014 2015

Cigarettes (million

sticks)Cigars (million units)Smoking Tobacco (Tonnes)Smokeless Tobacco

(Tonnes)Tobacco (Not calculable)

Source: Euromonitor International from trade associations, trade press, company research, trade interviews,trade sources

Table 13 Forecast Sales of Tobacco by Category: Value 2010-2015

NIS million2010 2011 2012 2013 2014 2015

CigarettesCigarsSmoking TobaccoSmokeless TobaccoCigarettes Including

RYO Stick EquivalentTobacco


Table 14 Forecast Sales of Tobacco by Category: % Volume Growth 2010-2015

% volume growth2014/15 2010-15 CAGR 2010/15 Total

CigarettesCigarsSmoking TobaccoSmokeless TobaccoTobacco






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CIGARETTES IN ISRAEL - CATEGORYANALYSIS

HEADLINES

Cigarettes sees a marginal decline in retail volume sales to 7.8 billion sticks in 2010

In July 2010, new taxation raises the unit price of cigarettes by NIS2 per 20 pack, which

results in increased demand for mid-priced cigarettes

High tar cigarettes sees a retail volume sales decline of 6% in 2010

Philip Morris remains the leading player in 2010, in accounting for a retail volume sales share

of 54%

Retail volume sales are expected to see a negative CAGR of 1% over the forecast period to

7.5 billion sticks in 2015

TRENDS

In July 2010, the Israeli government introduced another drastic change to taxation law, which

increased the average unit price of cigarettes in Israel by NIS2 per pack of 20. This had a

strong impact on the dynamics of cigarettes in Israel. The tax increase served to raise the

price of all cigarettes in Israel by around NIS2 per 20-pack, which made cheaper economy

brands less attractive, as they became more expensive in percentage terms. On the other

hand, premium and super premium brands also witnessed negative impacts, as their unit

price became extremely high and unattractive, which resulted in some consumers trading

down to cheaper alternatives. This created an opportunity for standard mid-priced brands to

attract consumers from economy, premium and super premium brands. Players realised this

potential and the unit price of leading mid-priced brands was lowered slightly. This made

already popular, imported mid-priced cigarettes more appealing to consumers and intensifiedcompetition for both economy and premium brands. For example, Pall Mall witnessed strong

growth of 90% from July 2010, due to the brand only increasing from NIS15 to NIS16, rather

than NIS17, per 20-pack following the introduction of the tax changes. Philip Morris

implemented a similar strategy for its Next brand and likewise saw a strong increase in

demand.

Mid-priced brands were the main beneficiaries of the tax changes introduced in 2010, as

leading imported mid-priced brands, such as Pall Mall, Next and Winston, represented a good

quality and less expensive alternative to more expensive premium cigarettes. As a result, mid-

priced cigarettes saw a three percentage point gain in retail volume sales share to 33% in

2010.

Price continued to play an important role in the consumer purchasing decision as regards

cigarettes in 2010. NIS20 is seen by many consumers as the upper limit that they will pay for

a pack of 20 cigarettes, with brands priced above that level tending to lose appeal. Forexample, a 20-pack of Camel cost NIS20 before the tax reforms introduced in July 2010 and

saw strong performance. However, after July 2010, the brand increased in price to NIS22,

which resulted in consumers migrating to other brands.

Slims saw a further marginal gain in retail volume sales share to 3% in 2010. Up until 2010,

slims were priced higher than regular cigarettes, however, as a result of the tax reform the


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price of slims was reduced to the general price of the mother brand. The vast majority of the

slim cigarettes available in Israel in 2010 were superslims.

In addition, the growing popularity of superslim cigarettes contributed to the migration towards

lower tar cigarettes. Within Israel the vast majority of popular imported brands are light,

excluding Winston and Marlboro, both of which are strong high tar cigarettes. In general, over

the review period, a consumer migration away from high tar cigarettes towards mid and lowtar cigarettes was seen.

Ci tt l ti l t l t il l l f i 2010 it li f l



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COMPETITIVE LANDSCAPE

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Cigarettes: Menthol/standard

Cigarettes: Filter/non-filter

Cigarettes: Carbon/standard Filter

Cigarettes: Filter Length






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Cigarettes: Slims/superslims Vs Regular

Cigarettes: Pack Size

Cigarettes: Pack Type

CATEGORY DATA

Table 1 Sales of Cigarettes by Tar Level: Volume 2005-2010

million sticks2005 2006 2007 2008 2009 2010

High Tar CigarettesMid Tar Cigarettes






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Low Tar CigarettesUltra Low Tar CigarettesCigarettes


Table 2 Sales of Cigarettes by Tar Level: Value 2005-2010

NIS million2005 2006 2007 2008 2009 2010

High Tar CigarettesMid Tar CigarettesLow Tar CigarettesUltra Low Tar CigarettesCigarettes


Table 3 Sales of Cigarettes by Tar Level: % Volume Growth 2005-2010




Table 4 Sales of Cigarettes by Tar Level: % Value Growth 2005-2010




Table 5 Sales of Cigarettes by Price Band: % Volume Breakdown 2005-2010

% retail volume2005 2006 2007 2008 2009 2010

Mid-PricedPremiumEconomy

Data removed from sam le






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Total 100.0 100.0 100.0 100.0 100.0 100.0


Table 6 Sales of Cigarettes by Standard/Menthol: % Volume Breakdown 2005-2010

% retail volume2005 2006 2007 2008 2009 2010

MentholStandardTotal 100.0 100.0 100.0 100.0 100.0 100.0


Table 7 Sales of Cigarettes by Tobacco Type: % Volume Breakdown 2005-2010

% retail volume2005 2006 2007 2008 2009 2010

American BlendVirginiaOther BlendTotal 100.0 100.0 100.0 100.0 100.0 100.0


Table 8 Sales of Cigarettes by Filter Vs Non-filter: % Volume Breakdown 2005-2010

% retail volume2005 2006 2007 2008 2009 2010

FilteredUnfilteredTotal 100.0 100.0 100.0 100.0 100.0 100.0


Table 9 Sales of Filter Cigarettes by Carbon Vs Non-carbon: % Volume Breakdown2005-2010

% retail volume2005 2006 2007 2008 2009 2010

Carbon FilterNon-Carbon Filter 89.8 87.8 87.5 87.4 87.3 89.5

Total 100.0 100.0 100.0 100.0 100.0 100.0Source: Euromonitor International from official statistics, trade associations, trade press, company research,

store checks, trade interviews, trade sources

Table 10 Sales of Cigarettes by Length: % Volume Breakdown 2005-2010





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% retail volume2005 2006 2007 2008 2009 2010

King Size/RegularSuperking/Long

ShortTotal 100.0 100.0 100.0 100.0 100.0 100.0


Table 11 Sales of Cigarettes by Regular/Slim: % Volume Breakdown 2006-2010

% retail volume2006 2007 2008 2009 2010

Slim/SuperslimRegularTotal 100.0 100.0 100.0 100.0 100.0

Source: Euromonitor International from official statistics, trade associations, trade press, company research,


Table 12 Sales of Cigarettes by Pack Size: % Volume Breakdown 2005-2010

% retail volume2005 2006 2007 2008 2009 2010

20s25s30s40sOther PacksizesTotal 100.0 100.0 100.0 100.0 100.0 100.0


Table 13 Sales of Cigarettes by Pack Type: % Volume Breakdown 2005-2010

% retail volume2005 2006 2007 2008 2009 2010

Flip-Top (FoldingCartons)

Soft Pack (Paper-based)Other Pack TypesTotal 100.0 100.0 100.0 100.0 100.0 100.0


Table 14 Cigarettes Company Shares 2006-2010

% retail volumeCompany 2006 2007 2008 2009 2010






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Total 100.0 100.0 100.0 100.0 100.0


Table 15 Cigarettes Brand Shares 2007-2010

% retail volumeBrand Company 2007 2008 2009 2010

Total 100.0 100.0 100.0 100.0




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Table 16 Sales of Cigarettes by Distr bution Format: % Analysis 2005-2010

% retail volume2005 2006 2007 2008 2009 2010

Store-Based Retailing- Grocery Retailers- - Supermarkets/

Hypermarkets- - Discounters- - Small Grocery

Retailers- - - Convenience Stores- - - Independent Small

Grocers- - - Forecourt Retailers- - Food/drink/tobacco

specialists

- - - Food/drinkspecialists

- - - Tobacco specialists- - Other Grocery

Retailers- - - Newsagent-

tobacconists/kiosks- - - Street vendors- Non-Grocery Retailers- - Department Stores- - Parapharmacies/

Drugstores- - Other Non-Grocery

RetailersNon-Store Retailing- Vending- Internet RetailingNon-retail channels- Bar-tobacconists- Hotels/restaurants/barsTotal 100.0 100.0 100.0 100.0 100.0 100.0


Table 17 Cigarettes: Production, Imports and Exports: Total Volume 2005-2010

Million sticks2005 2006 2007 2008 2009 2010

Cigarettes ImportsCigarettes ProductionCigarettes Exports

Source: GTIS, Official statistics, trade associations, trade press, trade interviewsNote: - indicates data not available




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Table 18 Forecast Sales of Cigarettes by Tar Level: Volume 2010-2015

million sticks2010 2011 2012 2013 2014 2015

High Tar Cigarettes

Mid Tar CigarettesLow Tar CigarettesUltra Low Tar CigarettesCigarettes


Table 19 Forecast Sales of Cigarettes by Tar Level: Value 2010-2015

NIS million2010 2011 2012 2013 2014 2015

High Tar CigarettesMid Tar Cigarettes

Low Tar CigarettesUltra Low Tar CigarettesCigarettes


Table 20 Forecast Sales of Cigarettes by Tar Level: % Volume Growth 2010-2015


High Tar CigarettesMid Tar CigarettesLow Tar Cigarettes

Ultra Low Tar CigarettesCigarettes


Table 21 Forecast Sales of Cigarettes by Tar Level: % Value Growth 2010-2015

% constant value growth2010-15 CAGR 2010/15 TOTAL

High Tar CigarettesMid Tar CigarettesLow Tar CigarettesUltra Low Tar Cigarettes

Cigarettes


Table 22 Forecast Sales of Cigarettes by Price Band: % Volume Breakdown 2010-2015






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% retail volume2010 2011 2012 2013 2014 2015

Mid-PricedPremium

EconomyTotal 100.0 100.0 100.0 100.0 100.0 100.0


Table 23 Forecast Sales of Cigarettes by Standard/Menthol: % Volume Breakdown2010-2015

% retail volume2010 2011 2012 2013 2014 2015

MentholStandardTotal 100.0 100.0 100.0 100.0 100.0 100.0


Table 24 Forecast Sales of Cigarettes by Tobacco Type: % Volume Breakdown 2010-2015

% retail volume2010 2011 2012 2013 2014 2015

American BlendVirginiaOther BlendTotal 100.0 100.0 100.0 100.0 100.0 100.0


Table 25 Forecast Sales of Cigarettes by Filter Vs Non-filter: % Volume Breakdown2010-2015

% retail volume2010 2011 2012 2013 2014 2015

FilteredUnfilteredTotal 100.0 100.0 100.0 100.0 100.0 100.0


Table 26 Forecast Sales of Filter Cigarettes by Carbon Vs Non-carbon: % VolumeBreakdown 2010-2015

% retail volume2010 2011 2012 2013 2014 2015






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Carbon FilterNon-Carbon Filter 89.5 89.5 89.6 89.6 89.7 89.7Total 100.0 100.0 100.0 100.0 100.0 100.0


Table 27 Forecast Sales of Cigarettes by Length: % Volume Breakdown 2010-2015

% retail volume2010 2011 2012 2013 2014 2015

King Size/RegularSuperking/LongShortTotal 100.0 100.0 100.0 100.0 100.0 100.0


Table 28 Forecast Sales of Cigarettes by Regular/Slim: % Volume Breakdown 2010-2015

% retail volume2010 2011 2012 2013 2014 2015

Slim/SuperslimRegularTotal 100.0 100.0 100.0 100.0 100.0 100.0


Table 29 Forecast Sales of Cigarettes by Pack Size: % Volume Breakdown 2010-2015

% retail volume2010 2011 2012 2013 2014 2015

20s25s30s40sOther PacksizesTotal 100.0 100.0 100.0 100.0 100.0 100.0


Table 30 Forecast Sales of Cigarettes by Pack Type: % Volume Breakdown 2010-2015

% retail volume2010 2011 2012 2013 2014 2015

Flip-Top (FoldingCartons)

Soft Pack (Paper-based)







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Other Pack TypesTotal 100.0 100.0 100.0 100.0 100.0 100.0




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CIGARS IN ISRAEL - CATEGORYANALYSIS

HEADLINES

Retail volume sales of cigars and cigarillos increase by 5% in 2010 to reach 2 million units

Increasing demand is seen for non-Cuban cigars in 2010

Cigarillos sees the most dynamic retail volume and value sales growth of 7% each in 2010

Dubek remains the leading player in 2010, in accounting for a retail volume sales share of

33%

Retail volume sales are expected to see a CAGR of 5% over the forecast period to reach 3

million units in 2015

TRENDS

In 2010, the vast majority of cigar smokers in Israel continued to view cigars as a status

symbol, associated with a sophisticated, higher-income audience. Cigars in Israel developed

over recent years, as the variety of products available widened to meet the standards of other

more developed markets with larger cigar smoking populations. In addition, an increase was

seen in the range of distribution channels where both premium and mass cigars can be

purchased, while the number of cigar lounges and clubs in the country also increased. The

most evident evolution in terms of a cigar smoking tradition within Israel is the manner in

which smokers refer to the activity as a lifestyle experience. Israeli cigar smokers tend to refer

to cigar smoking as a ritual and use terms such as aroma, flavour and origin, amongst others.

Cigar smoking is very common among celebrities, businessmen and politicians. This draws

even more attention to cigar smoking as a status symbol and lifestyle choice, as more high

and upper-middle income consumers want to join this exclusive group. Not much change was seen in 2010 in terms of new trends, as cigars witnessed positive retail

volume and value sales growth of 5% and 3%, respectively. Premium cigars continued to

target lifestyle trends, as high and upper-middle income consumers continued to seek more

expensive and high quality cigars with new brand launches, such as Alec Bradley and La Flor

Dominicana, meeting this demand. On the other hand, economy brands also witnessed

positive development in 2010, as both younger Israeli consumers and those wanting to join

the lifestyle trend sought out cheaper products. For example, the private label Sabor by Zfania

Brazily witnessed impressive retail volume sales growth in 2010.

Cigarillos witnessed the most dynamic retail volume and current value sales growth of 7% for

each in 2010. In 2010, there were two growing niches within cigarillos. On the one hand,

mass flavoured brands saw increased demand, while, on the other, more premium brands

were seen within cigarillos. Cigarillos continued to gain popularity in 2010, due to targeting

more fun-seeking consumers who are not heavy smokers, but who do enjoy the experience ofthe cigar and cigarillo world. Such consumers do not seek premium and heavy cigars, but

rather lighter and less expensive products. In 2010, premium brands, such as Romeo y

Julieta, Montecristo, Cohiba and Davidoff, could be found alongside cheaper mass brands,

such as Caf Crme.


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Thanks to the growing popularity of cigarillos over the review period, a new small niche of

machine-manufactured, flavoured, small cigars began to develop in 2010. Mass market

brands, such as Backwoods, witnessed positive retail volume sales growth in 2010, as less

experienced consumers do not always know the difference between the two, as they tend to

look al ke and offer a similar smoking experience. Thanks to this small growing niche, new

products were launched in 2010, including Good Time Stonewood by Zfania Brazily. Suchproducts witnessed strong growth in demand both within kiosks and forecourt retailers in

2010.

Another minor trend that saw development within premium cigars in 2010 was the introduction

of cigars with thicker ring gauge. In 2010, a new edition of Romeo y Julieta cigars was

launched with a ring gauge of 55.

Cigars and cigarillos saw retail volume sales growth of 5% in 2010, largely similar to that seen

in 2009. Both cigars and cigarillos witnessed positive growth in 2010, as more Israelis

embraced this burgeoning culture. In 2010, more mass consumers began to smoke both

cigars and cigarillos, as the range of mass brands available increased. In addition to the

growing cigar and cigarillo smoking trend, which is still developing in Israel, the higher unit

price of cigarettes also had a positive impact on demand.

HAND-MADE VERSUS MACHINE-MANUFACTURED SPLITS

In 2010, there was a trend towards machine-manufactured cigars and cigarillos. The

handmade versus machine-manufactured split in Israel is very different in terms of retail

volume and value sales. In terms of retail volume sales, cigars and cigarillos remained

dominated by machine-manufactured products, which accounted for an 86% share in 2010

compared to the 14% share accounted for by handmade products. The domination of

machine-manufactured products was mainly due to the strong demand for quality but

affordable cigars. In terms of retail value sales, handmade products tend to account for adominant share, with higher unit prices having a significant impact in favour of handmade

cigars.




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Table 1 Sales of Cigars by Handmade vs Machine-manufactured 2006-2010

% retail volume2006 2007 2008 2009 2010

Handmade CigarsMachine-manufactured

Cigars

Total 100.0 100.0 100.0 100.0 100.0Source: Euromonitor International


The main distributors in cigars excluding cigarillos in 2010 were Esh-Li Cigars and Tobacco,

with a 31% share of retail volume sales, and Devidas Group Ltd with a 23% share. Esh-Li

Cigars and Tobacco is the exclusive distributor of many cigar and cigarillo brands in Israel,

including King Edward, Phillies and Swisher Sweet, which accounted for respective retail

volume sales shares of 16%, 9% and 6%. Devidas was the second leading player in cigars

excluding cigarillos in 2010, importing brands such as Backwoods, Romeo y Julieta and

Montecristo, which accounted for respective retail volume sales shares of 13%, 4% and 3%.There were no manufacturers of cigars or cigarillos in Israel in 2010, and, as such, all

products were imported.





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PROSPECTS

Small cigars and cigarillos are expected to continue to witness healthy retail volume sales

growth over the forecast period, with respective CAGRs of 4% and 6% predicted. The growing

consumer base for these products is expected to continue to demand new products and more

exciting flavours, which in turn will drive sales. Kiosks and convenience stores are expected to

offer a wider range of these products, while importers are likely to increase their focus on

these areas.

CATEGORY DATA

Table 2 Sales of Cigars by Category: Volume 2005-2010

'000 units2005 2006 2007 2008 2009 2010

Cigars ExcludingCigarillos





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- Large Cigars- Standard Cigars- Small CigarsCigarillosCigars



Table 3 Sales of Cigars by Category: Value 2005-2010

NIS '0002005 2006 2007 2008 2009 2010

Cigars ExcludingCigarillos

- Large Cigars- Standard Cigars- Small CigarsCigarillosCigars


Table 4 Sales of Cigars by Category: % Volume Growth 2005-2010


Cigars Excluding Cigarillos- Large Cigars- Standard Cigars- Small CigarsCigarillosCigars


Table 5 Sales of Cigars by Category: % Value Growth 2005-2010




Table 6 Sales of Cigars by Handmade vs Machine Manufactured: % VolumeBreakdown 2005-2010






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% retail volume2005 2006 2007 2008 2009 2010

Handmade CigarsMachine-manufactured

CigarsTotal 100.0 100.0 100.0 100.0 100.0 100.0


Table 7 Company Shares of Cigars Excluding Cigarillos 2006-2010


Total 100.0 100.0 100.0 100.0 100.0Source: Euromonitor International from official statistics, trade associations, trade press, company research,


Table 8 Brand Shares of Cigars Excluding Cigarillos 2007-2010


Total 100.0 100.0 100.0 100.0


Table 9 Company Shares of Cigarillos 2006-2010







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Total 100.0 100.0 100.0 100.0 100.0


Table 10 Brand Shares of Cigarillos 2007-2010


Total 100.0 100.0 100.0 100.0


Table 11 Sales of Cigars by Distribution Format: % Analysis 2005-2010

% retail volume2005 2006 2007 2008 2009 2010


Hypermarkets

- - Discounters- - Small Grocery

Retailers- - - Convenience Stores- - - Independent Small

Grocers- - - Forecourt Retailers- - Food/drink/tobacco

specialists- - - Food/drink

specialists- - - Tobacco specialists- - Other Grocery


tobacconists/kiosks

- - - Street vendors- Non-Grocery Retailers- - Department Stores- - Parapharmacies/


Retailers





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Table 15 Forecast Sales of Cigars by Category: % Value Growth 2010-2015






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Smoking tobacco saw retail value sales growth of 8% in 2010, compared to the CAGR of 7%

seen over the review period. Despite the significant decline seen in the average unit price of

RYO tobacco in 2010, much stronger retail volume sales growth than in previous review

period years boosted retail value sales performance.

The average unit price of RYO tobacco decreased by 6% in current value terms to NIS1,044

per kg in 2010. This resulted from intensifying competition, as more brands were madeavailable and retailers lowered their prices in order to attract consumers.

Water pipe tobacco remained significantly cheaper than RYO tobacco and pipe tobacco.

According to a survey conducted by the Israel Anti-Drug Authority in 2008, 27% of students

aged between 12 and 18 had smoked a water pipe in the month prior to the survey.

Meanwhile, some 57% of those aged between 12 and 18 not studying in a formal structure

had smoked water pipes in the previous month. According to a survey conducted by the

Israeli parliament, 30-40% of all students smoke water pipes. As water pipe smoking is very

popular in Israel, the range of different product types available is very wide in terms of water

pipe sizes, as well as tobacco and coals for use with water pipes. In addition, accessories,

such as special pipes and water pipe heads of different shapes and sizes, are available.

the Role and Effect of Cannabis/marijuana

While cannabis/marijuana is illegal in Israel, it is widely available and becoming increasingly

popular. However, in 2009, the Israeli parliament authorised the use of cannabis/marijuana for

medical purposes. This was the first time in Israel that cannabis/mar juana smoking had been

legally permitted within Israeli hospitals and at home for specific medical purposes. In 2010,some 4,500 Israelis were permitted to use cannabis for medical purposes, 22 of whom were

children or teens. These people were permitted to either grow cannabis/marijuana themselves

or purchase it from a certified grower. The Ministry of Health has issued f ive

cannabis/marijuana growing licenses to local growers. The Israeli parliament is discussing

methods to regulate this new law.




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DISTRIBUTION

Newsagent-tobacconists/kiosks remained the leading channel for smoking tobacco in Israel in

2010, in accounting for a retail volume sales share of 42%. Newsagent-tobacconists/kiosks

remained a highly favoured distr bution channel amongst younger Israeli consumers, with an

estimated 2,500 kiosks in Israel in 2010. While this channel targets all audiences, a special

emphasis is placed on smokers, as such outlets stock a wide range of tobacco products and

also sell single cigarettes to meet the demands of those trying to quit or those who do not

wish to purchase a pack. Independent small grocers was the second ranked distribution

channel, with a 24% share of retail volume sales in 2010. Independent small grocers

witnessed a slight decline in retail volume sales share in 2010, mainly as a result of the

improved performance seen by forecourt retailers. In 2010, forecourt retailers continued to

witness impressive outlet expansion, with an estimated 75 new outlets opened.


Nakhla Tobacco remained the leading distributor of smoking tobacco in Israel in 2010, in

accounting for a retail volume sales share of 47%. Following was Devidas Group on a retail

volume sales share of 40%. Nakhla Tobacco remained the leading player in pipe tobacco in

2010, in accounting for a retail volume sales share of 67%.

Content removed from sam le




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NIS million2005 2006 2007 2008 2009 2010

RYO TobaccoPipe Tobacco

Smoking TobaccoSource: Euromonitor International from official statistics, trade associations, trade press, company research,


Table 3 Sales of Smoking Tobacco by Category: % Volume Growth 2005-2010


RYO TobaccoPipe TobaccoSmoking Tobacco


Table 4 Sales of Smoking Tobacco by Category: % Value Growth 2005-2010




Table 5 Company Shares of RYO Tobacco 2006-2010


Total 100.0 100.0 100.0 100.0 100.0


Table 6 Brand Shares of RYO Tobacco 2007-2010








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Total 100.0 100.0 100.0 100.0


Table 7 Company Shares of Pipe Tobacco 2006-2010


Total 100.0 100.0 100.0 100.0 100.0



Table 8 Brand Shares of Pipe Tobacco 2007-2010


Total 100.0 100.0 100.0 100.0


Table 9 Sales of Smoking Tobacco by Distribution Format: % Analysis 2005-2010

% retail volume2005 2006 2007 2008 2009 2010


Hypermarkets- - Discounters- - Small Grocery

Retailers- - - Convenience Stores

- - - Independent SmallGrocers

- - - Forecourt Retailers- - Food/drink/tobacco

specialists- - - Food/drink

specialists






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- - - Tobacco specialists- - Other Grocery


tobacconists/kiosks- - - Street vendors- Non-Grocery Retailers- - Department Stores- - Parapharmacies/


RetailersNon-Store Retailing- Vending- Internet RetailingNon-retail channels- Bar-tobacconists- Hotels/restaurants/barsTotal 100.0 100.0 100.0 100.0 100.0 100.0


Table 10 Forecast Sales of Smoking Tobacco by Category: Volume 2010-2015

Tonnes2010 2011 2012 2013 2014 2015



Table 11 Forecast Sales of Smoking Tobacco by Category: Value 2010-2015

NIS million2010 2011 2012 2013 2014 2015



Table 12 Forecast Sales of Smoking Tobacco by Category: % Volume Growth 2010-2015

% volume growth

2014/15 2010-15 CAGR 2010/15 Total








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Table 13 Forecast Sales of Smoking Tobacco by Category: % Value Growth 2010-2015






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SMOKELESS TOBACCO IN ISRAEL -CATEGORY ANALYSIS

TRENDS

Retail volume and value sales of smokeless tobacco remain negligible in Israel in 2010

The lack of demand is due to the absence of a smokeless tobacco culture in Israel

Documents

Sample Report Tobacco