10.6 Retail value and volume of the Australian tobacco market

Last updated: May 2019         

Suggested citation: Scollo, M, Bayly, M. 10.6 Retail value and volume of the Australian tobacco market. In Scollo, MM and Winstanley, MH [editors]. Tobacco in Australia: Facts and issues. Melbourne: Cancer Council Victoria; 2019. Available from http://www.tobaccoinaustralia.org.au/chapter-10-tobacco-industry/10-6-retail-value-and-volume-of-the-australian-tobacco-market

The three major tobacco companies operating in Australia are not required to report retail sales data to government. Tobacco sales data would be extremely valuable in monitoring trends in tobacco use and in evaluating the effectiveness of tobacco control interventions. Because of the low level of illicit trade in Australia, retail data are likely to provide a reasonably accurate estimate of total tobacco consumption in Australia and would provide an unbiased benchmark against which self-reported tobacco consumption survey data could be evaluated.1 Some sales data are collected by market research companies and are available for purchase at a high cost, although some researchers have been denied access to this data despite being willing to purchase it. Accordingly, much of the information reported in this and the following sections is drawn from market research reports that cannot be independently verified. 

10.6.1 Value and volume of the Australian tobacco market

Despite falling tobacco consumption and lower sales volumes of cigarettes in recent years, the value of tobacco sales has increased, due to price increases caused in part by taxation increases—see Chapter 13, Table 13.3.2. In early 2019—following six annual 12.5% increases in customs and excise duty—the taxation component ranged from about 56% of the recommended retail price2 of a premium brand of cigarettes to up to 62% of the recommended retail price of the leading (super-value) brand of cigarettes. Table 10.6.1 shows the value of the Australian tobacco market in 2016 and 2017, and the volume of cigarette sales. In 2017, 14 billion sticks were sold in Australia at a value of $14.5 billion, equating to an average of $1.24 per cigarette. This represented an increase in value but decrease in volume from 2016, when the average cigarette value was $1.08.3 Other smoked tobacco products saw a substantial increase in sales value from 2016 to 2017. In Australia, cigars, cigarillos and pipe tobacco make up a very small and declining component of the total tobacco market—around 1.3% of wholesale market value at 20184—meaning roll-your-own tobacco would account for a large majority of this 15.1% jump in sales revenue. Cigars are typically expensive in Australia, due to low supply, high labour costs, and ‘prestige’.4

Table 10.6.1
Value and volume of retail sales of tobacco products in Australia, 2016 and 2017

Source: Euromonitor International. Tobacco in Australia. London: Euromonitor International, 2019.3  Data up to 2017 available for purchase or on subscription: http://www.euromonitor.com/tobacco 

Table 10.6.2 shows the volume of cigarette saless sold in 2016 and 2017 in Australia by retail channel. In 2017, 7.7 billion cigarette sticks were sold in supermarkets, or 309 million packs of 25 cigarettes. The volume of cigarette sales declined from 2016 to 2017 in all retail channels other than internet retailing. The small proportion of cigarette sales in vending machines declined substantially from 0.1% to 0%. Note, however, that cigarette sales in vending machines did not cease in 2017, but the volume of sales was apparently negligible. 

Table 10.6.2
Volume of the Australia cigarette market, by retail channel, millions of sticks

Source: Euromonitor International. Tobacco in Australia. London: Euromonitor International, 2019.3 Data up to 2017 available for purchase or on subscription: http://www.euromonitor.com/tobacco

^ Categories not otherwise defined by Euromonitor. 

Additional Australian retail industry data on retail sales just in for the grocery market shows similar patterns of tobacco marketproduct value and volumes. In 2016, tobacco sales (including smoking accessories) were valued at $9.43 billion, or 15.8% of all grocery sales revenue.5 Cigarettes comprised the majority of tobacco sales (85.9%), valued at $8.10 billion. Roll-your-own tobacco made up 13.0% at $1.23 billion, followed by cigarette papers (0.4%, $41.6 million), cigars (0.3%, $31.1 million), and cigarette accessories (0.3%, $25.1 million). British American Tobacco had the largest share of the 2016 total grocery tobacco market value at $3.42 billion (36.2%), followed by Philip Morris ($2.96 billion, 31.4%) and Imperial Tobacco ($2.91 billion, 30.9%). All other tobacco importers and wholesalers made up the remaining $138.6 million (1.5%).5

10.6.2 Sales value of cigarette and tobacco compared to other product categories from Australian supermarkets and grocers 

In 2015, consumers spent $7.81 billion on cigarettes in grocery retailers—a reported increase of 6.5% on the previous year.6 In previous years, cigarettes ranked second only to dairy produce in sales value, but in 2015 overtook dairy produce to be the highest-revenue grocery product category (Table 10.6.3).

Table 10.6.3
Ranking by sales value of leading product categories in Australian groceries and supermarkets, 2015 

Source: Retail World6

Relevant news and research

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1. Gartner CE, Chapman SF, Hall WD, and Wakefield MA. Why we need tobacco sales data for good tobacco control. Medical Journal of Australia, 2010; 192(1):3−4. Available from: http://www.mja.com.au/public/issues/192_01_040110/gar11174_fm.html

2. NSW Retail Tobacco Traders' Association. Price lists. The Australian Retail Tobacconist, 2018; 108(Oct-Dec). 

3. Euromonitor International. Tobacco in Australia—2016 and 2017. London: Euromonitor International, 2019. Available from: http://www.euromonitor.com/tobacco.

4. Thomson J. IBISWorld Industry Report F3606b: Tobacco Product Wholesaling in Australia. Melbourne, Australia: IBISWorld, 2018.

5. Retail World. Annual Report 2016. Retail World, 2017.

6. Retail World. Annual Report 2015. Retail World, 2016.