World Tobacco Development Report 2023 (Part I)

2023, the world economy is growing slowly, tobacco regulation is facing many challenges, and the tobacco industry is developing in a complex and changeable environment. Sales of combustible tobacco products such as cigarettes, cigars, pipe cigarettes and hand cigarettes declined across the board, with 54.679 million cartons of legal cigarettes sold in the world except mainland China, down 2.1 percent year-on-year; sales of heated cigarettes and e-cigarettes remained at a growth rate of more than 10 percent, while nicotine bags continued to grow at a high rate.

2023

2019-2023

development environment

(I) world economic recovery

2023, the World Health Organization announced that the new crown epidemic no longer constitutes a "public health emergency of international concern", the world finally out of the haze of the new crown epidemic, the economy into the recovery process, artificial intelligence and other technological innovation and application by leaps and bounds. However, the international situation continues to be volatile, trade protectionism prevails, the inflation situation remains severe, the epidemic on the supply chain of the persistent negative impact of the serious drag on the pace of economic recovery, world economic growth remains slow and uneven.

World Health Organization's report on global tobacco use trends from 2000 to 2030, about 1/5 million adults in the world use tobacco in 2022, a significant decrease from the 1/3 in 2000. There are 1.25 billion tobacco users worldwide, with more than 1 billion men and more than 0.2 billion women. The global tobacco use rate is 20.9 per cent, with 34.4 per cent among men and 7.4 per cent among women. Tobacco use was highest in Southeast Asia, at 26.5 percent. Europe is a close second, with 25.3 per cent, and female tobacco use in Europe is more than twice the global average. 150 countries have successfully reduced tobacco use, some have seen little change in tobacco use since 2010, and six countries-Congo, Egypt, Indonesia, Jordan, Oman and Moldova-have seen an increase in tobacco use.

(III) electronic cigarette regulatory imbalance

With the continuous innovation and rapid popularity of new tobacco products such as e-cigarettes, its social impact and controversy are also increasing, and the call for supervision is getting higher and higher. The seventh session of the Conference of the Parties to the Framework Convention on Tobacco Control in 2016 urged Parties to consider the application of regulatory measures to prohibit or restrict the manufacture, import, distribution, display, sale and use of e-cigarettes in accordance with the national laws of the Parties and public health objectives. According to the World Health Organization's Global Tobacco Epidemic 2023 Report: Protecting People from Tobacco Smoke, sponsored by the Bloomberg Philanthropies, a total of 121 countries regulate e-cigarettes in some way, of which 34 countries ban the sale of e-cigarettes, covering 2.5 billion of the population; 87 countries have adopted one or more legislative measures to regulate e-cigarettes, covering 3.3 billion of the population, these 87 countries currently have different regulatory schemes, and there is no global method to regulate e-cigarettes. There are still 74 countries (7 fewer than in 2020) that do not have bans or regulations on e-cigarettes covering more than 2 billion of the population.

(IV) FDA Regulation Frequently Challenged

In 2009, the United States passed the Family Smoking Prevention and Tobacco Control Act, which granted the U.S. Food and Drug Administration (FDA) extensive tobacco regulatory powers, but more than ten years have passed, and the operation of this regulatory mechanism has been continuously exposed and regulatory authority Constantly encountering challenges, the effect of supervision is constantly being questioned, and the gap between ideals and reality has led to dissatisfaction from many parties. Recently, the FDA has struggled to advance four regulatory measures:

prohibition of menthol is difficult to implement. As early as 2013, the FDA received a petition to ban menthol cigarettes. The petitioner filed a lawsuit in 2020 for failing to take action. The FDA had to announce new product standards in 2021 on the grounds of public health issues and planned to ban menthol cigarettes and flavored cigars in 2022. However, because menthol cigarettes account for 1/3 of cigarette consumption in the United States, tobacco companies have stated that they will fight to the end in law, and the proportion of people of color such as African Americans who smoke menthol cigarettes is relatively high, the ban plan has to be delayed again and again. It is expected that the presidential election It is difficult to come to a conclusion before.

e-cigarette market chaos is difficult to ban. On the one hand, FDA stipulates that the pre-marketing application (PMTA) for tobacco products and the marketing authorization order (MGO) must be submitted before the marketing of electronic cigarettes. However, the number of PMTA submitted is large, and FDA has repeatedly delayed due to the inability to complete the review on time. At present, only 23 tobacco-flavored electronic cigarettes have been approved for marketing. The approved products are not popular with mainstream users, and products that have not been authorized have not been removed from the shelves. On the other hand, illegal disposable flavored e-cigarettes are rapidly proliferating in the United States, especially loved by American teenagers. For this reason, FDA has repeatedly issued warnings and fines to manufacturers, importers, retailers, etc., and carried out joint law enforcement actions with customs, but it is still difficult to prevent the trend of disposable e-cigarettes from starting a prairie fire.

cigarette packaging graphic warning lawsuits continue. In 2011, FDA issued the "Regulations on Cigarette Packaging and Advertising Warning Requirements". Five tobacco companies subsequently took FDA to court for violating the right of freedom of speech in the first amendment of the US Constitution and violating the federal administrative procedure law. After appeal, FDA lost the lawsuit in 2012. In 2019, the FDA proposed the use of graphic warnings on cigarette packaging and tobacco advertisements. This time, the FDA was sued by tobacco companies. The first instance was still found to violate the First Amendment of the Constitution and was sentenced to revoke the regulations. However, the FDA won the case in stages in the subsequent appeal. The judicial controversy surrounding the graphic warning is expected to continue.

handmade quality cigars regulatory controversy. In 2016, the FDA issued new regulations to bring cigars, e-cigarettes and other non-cigarette tobacco products under supervision, and cigars need to submit PMTA before they go on the market, which triggered strong opposition from manufacturers of handmade high-quality cigars. Handmade high-quality cigars account for less than 3% of all cigar sales in the United States. The entire industry consists of dozens of small family manufacturers and thousands of small independent stores across the country. It is difficult to bear the heavy regulatory costs and burdens. As a result, three cigar associations took the FDA to court, asking for an exemption from regulation. In 2023, handmade premium cigar manufacturers won, but the FDA subsequently appealed. At present, a number of members of Congress have written to the FDA, proposing a bill to request the FDA to exempt hand-made high-quality cigars, which cites the 2022 FDA and the National Institutes of Health commissioned by the National Academies of Science, Engineering and Medicine (NASEM) research report "Quality Cigars: Usage Patterns, Marketing and Health Impact." The report points out that most consumers of handmade premium cigars are occasional rather than daily smokers, and that only 1% of adults smoke handmade premium cigars and very few young people, so handmade premium cigars should be considered as a separate category.

all types of tobacco products

2023, the world sales of various types of tobacco products will reach US $645.65 billion billion, of which cigarettes account for 78.5 per cent, cigars and other combustible tobacco products account for 9.6 per cent, and smokeless tobacco products such as heated cigarettes and electronic cigarettes account for 11.9 per cent. (All kinds of tobacco products data from Euromonitor international database, excluding mainland China data)

(I) cigarette

2023, the world legal cigarette sales 54.679 million cartons, down 2.1 percent year-on-year. There are 15 countries with annual sales of more than one million cases, accounting for 59.7 per cent of the world total, with Indonesia (5.652 million cases), Russia (3.644 million cases) and the United States (3.557 million cases) in the top three in the world; Turkey's sales growth rate is the highest, up 17.7 per cent year-on-year; and the United States has the largest decline, down 8.7 per cent year-on-year. World legal cigarette sales of $506.97 billion billion, up 1.5 percent year-on-year. There are 14 countries with annual sales of more than US $10 billion, accounting for 62.4 per cent of the world, of which the United States (US $93.99 billion) is the absolute leader in the world, followed by Indonesia (US $35.77 billion) and Germany (US $25 billion); Turkey has the highest sales growth rate, up 25.1 per cent year-on-year; Russia has the largest decline, down 11.2 per cent year-on-year. Poland withdrew from selling millions of cartons and billions of dollars of cigarettes in 2023.

2023, the world's illegal cigarette trading volume will be 9.336 million cartons, up 7.8 percent year-on-year. Countries with more than 500000 cartons are Brazil (988000 cartons), Pakistan (828000 cartons), India (664000 cartons), Indonesia (586000 cartons) and Russia (531000 cartons). The world's illicit cigarette penetration rate (illicit cigarette trade as a percentage of total cigarette consumption) is 14.6 per cent, with countries with a penetration rate of more than 50 per cent in Panama (84.5 per cent), Ecuador (76.7 per cent), Peru (58.5 per cent), Uganda (57.9 per cent) and Malaysia (55.6 per cent).

market with cigarette sales exceeding one million cases and sales exceeding 10 billion US dollars in 2023

(II) cigars and other combustible tobacco products

traditional cigars. In 2023, traditional cigar sales fell 9.1 percent year-on-year to 6.95 billion. The countries with sales of more than 0.1 billion were the United States (5.27 billion), Cuba (0.31 billion), Spain (0.28 billion), Italy (0.18 billion), Germany (0.15 billion), France (0.14 billion) and the Netherlands (0.11 billion). S., which accounts for about 75.8 percent of the world's sales, is down 11.4 percent year-on-year. Sales of traditional cigars were $17.92 billion, down 1.8 percent year-over-year. The only countries with sales exceeding $1 billion are the United States ($11.02 billion) and Cuba ($1.27 billion). U.S. sales, which account for 61.5 percent of the world's, were down 7.7 percent year-on-year.

miniature cigars. In 2023, sales of miniature cigars fell 13.6 per cent year-on-year to 19.34 billion. The countries with sales of more than 1 billion are the United States (6.06 billion), Japan (3.2 billion), Germany (2.51 billion) and Spain (1.58 billion). Sales of micro cigars were $7.23 billion billion, down 5.9 percent year-over-year. The only country with sales above $1 billion is the United States ($2.71 billion).

hand-rolled cigarettes. In 2023, the sales volume of hand-rolled cigarettes was 99000 tons (about 2.827 million cartons of cigarettes), down 3.8 percent from the same period last year. Sales of US $29.8 billion, up 3.7 percent year on year; Countries with sales exceeding US $1 billion are Britain (US $6.41 billion), Germany (US $4.55 billion), Australia (US $3.46 billion), France (US $3.26 billion), Italy (US $1.82 billion) and Spain (US $1.37 billion).

pipe smoke. In 2023, pipe tobacco sales were 129000 tons (about 668000 cartons of cigarettes), down 1.1 percent from a year earlier; sales were $7.08 billion, up 1.1 percent from a year earlier; and countries with sales of more than $1 billion were Saudi Arabia ($1.8 billion) and the United States ($1.52 billion).

(III) Smokeless Tobacco Products

heating cigarettes. In 2023, heated smoking sets sold 40.4 million units, up 18.2 percent year-over-year; sales of $2.12 billion billion, up 13.3 percent year-over-year. The sales volume of heated cigarettes was 3.196 million cases, up 12.4 year on year. Japan (1.132 million cases), Russia (473000 cases), Italy (291000 cases), South Korea (244000 cases), Poland (142000 cases) and Ukraine (114000 cases) sold more than 100000 cases. Among them, Japan accounted for 35.4 percent of the world's sales, with sales up 12.3 percent year-on-year. Sales of heated cigarettes reached US $34.44 billion, up 11.6% year on year. Countries with sales exceeding US $1 billion are Japan (US $11.49 billion), Italy (US $4.55 billion), Russia (US $2.58 billion), South Korea (US $2.48 billion), Germany (US $1.47 billion), Poland (US $1.27 billion) and Czech Republic (US $1.1 billion). Among them, Japan accounted for 33.7 percent of the world's sales, with sales up 11.6 percent year-on-year.

electronic cigarettes. In 2023, sales of e-cigarettes in liquid terms rose to 16.119 million, up 6.9 per cent year-on-year; total sales of liquid cigarettes and smoking sets totaled $20.88 billion, up 15.6 per cent year-on-year; and countries with sales exceeding $1 billion were the United States ($5.96 billion), the United Kingdom ($3.3 billion), Canada ($2.14 billion) and France ($1.26 billion). From the perspective of e-cigarette categories, sales of open e-cigarettes that need to be filled with liquid were US $7.66 billion, an increase of 7.5 percent year-on-year, accounting for 36.7 percent of e-cigarette sales; sales of closed e-cigarettes were US $13.22 billion, an increase of 20.8 percent year-on-year, accounting for 63.3 percent of e-cigarette sales. Among them, disposable e-cigarettes continued to grow at a high rate, increasing by 54.9 percent to $5.37 billion.

traditional mouth contains smoke. In 2023, sales of traditional mouthed cigarettes, including chewing tobacco, American snus, and Swedish snus, continued to decline, down 1.8 percent year-on-year to 116000 tons; sales continued to grow, up 2.2 percent year-on-year to $13.83 billion, with U.S. sales accounting for 75.3 percent of the world's total.

nicotine pouch. In 2023, as the rapid rise of tobacco products in recent years, nicotine bags continue to maintain rapid growth, sales increased by 43.5 to 15.51 billion bags, sales increased by 61.1 to $7.86 billion, the United States nicotine bag sales accounted for 75.8 of the world.