The notorious industry: comparing foreign vs. local tobacco brands on the Arab street

Published January 20th, 2015 - 12:55 GMT

Local Tobacco: A National Business

One of the most prolific industries currently operating in the Middle East and North Africa is big tobacco. This market seems immune to the roller coaster that is business life in the region, hardly affected by the socio-political risks that tend to keep investors at bay. While major tobacco product importers, such as British American Tobacco, Imperial Tobacco and Philip Morris International, dominate the market, there in fact exist several competing local players vying for their share of the pie. Here is a look at some of the national Middle Eastern manufacturers, their role in the local markets they operate in and their outlook in the near term.

Cedars – Lebanon

Cedars is a locally produced Lebanese brand by the manufacturer Regie Libanaise des Tabacs et Tombacs. It is a national cigarette brand in a country where, according to sources, the annual average consumption rate of cigarettes is 119 packs per person, or about 10 packs per month. As per the UK-based ERC Group, that is almost three times the global average, making Lebanon a highly potent marketplace for tobacco producers. Furthermore, while the global consumption of cigarettes was going down by 11.7% in 2013, Lebanon’s craving for nicotine was on the rise regardless. In fact, between 1990 and 2012, the per capita consumption rate in Lebanon rose by a startling 475%.

All of this sets the stage for a highly lucrative marketplace for local and foreign producers alike, but one factor sets Cedars aside from its international competitors – its price. 

study in 2012 by Chaaban et al. revealed this by using the ratio of consumption from the Household Expenditure Survey from 2004 to estimate the market share composition for the national tobacco industry. A pack of Cedars costs approximately $0.4, specifically $0.5 for a carton packet and $0.3 for a paper packet. To place this in perspective, that is less than half of the average price of imported brands, which on average cost $1.32. This makes Cedars particularly popular among the low-income and budget-conscious Lebanese, thus explaining its estimated 21% market share versus 79% for international producers.

The social effects of having such a locally produced and more affordable brand in Lebanon are significant. According to Chaaban et al., tobacco expenditure accounts for 2-3% of total spending among the poorer segments of the population, where Cedars reigns in the market. Correspondingly, for the poorest of the poor, expenditure on tobacco accounts for just one percentage point less than the share spent on education. 

Cleopatra – Egypt  


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