Israeli consumers spent NIS 8.262 billion just on cigarettes in 2014, according to StoreNext figures obtained by "Globes."
The entire fast moving consumer goods (FMCG) market in 2014 was only five times that amount. Dairy sales totaled NIS 7.52 billion, 10% less than cigarettes.
The cigarettes market grew 4.9% in monetary terms in 2014, but the entire increase was due to the tax increase on cigarettes, which boosted the price of a pack of cigarettes. In quantitative terms, the market continued to shrink last year, dropping 3.5%, a trend that has continued now for three years. Quantitative cigarette sales have now fallen 11.2% in two years.
Three cigarette companies operate in Israel: global company Philip Morris, which constitutes a monopoly with a 58.9% market share; Globrands, with a 27.9% share; and Israeli company Dubek, with a 13% share.
While Philip Morris and Globrands improved their performance, Dubek continued its negative trend, with monetary sales down 10.2% and quantitative sales down 17.4%.
Philip Morris makes four cigarette brands sold in Israel: Marlboro, Next, L&M, and Parliament. Israeli consumers spent NIS 4.86 billion in 2014 on the company's brands.
The Marlboro brand continues to lead the market, and has become even stronger. In contrast to the overall market trend, Marlboro sales grew 7% in quantitative terms in 2014 and 14% in monetary terms. Israeli consumers spent NIS 2.124 billion in 2014 on just the Marlboro brand, which accounted for 25.7% of all cigarettes sold in Israel.
Marlboro sales were double sales of yellow cheese, and 3.5 times sales of breakfast cereals in Israel.
The brand's strength is also reflected in Philip Morris's decision to raise its price to retailers at the same time that the shekel was falling against the dollar. Even though the shekel-dollar rate was low in the past, this was not reflected in the price of a pack of Marlboro cigarettes.
Dubek brands slide
Sales of the Next brand totaled NIS 969.2 million in 2014, up 7.4% in monetary terms and down 2.8% in quantitative terms. Sales of the L&M brand were NIS 928.7 million, only slightly lower. Sales of the Parliament brand maintained their relatively high market share (10.2%) with consumer sales totaling NIS 845.2 million.
Globrands has three of the top 10 selling brands: Pall Mall, Winston, and Camel. The company's Kent and LD brands are ranked in 11th and 12th place. Israeli consumers spent NIS 2.3 billion last year on the company's brands, constituting a 5.9% rise in monetary sales, but a 2.6% fall in quantitative sales. Israeli consumers spent NIS 780 million on the Pall Mall brand, and the same amount on the Winston brand.
Dubek has three of the 10 top selling brands: Time, Noblesse, and Golf. Sales of all three brands plunged by double-digit percentages in 2014.
The time brand continued its slide with a 9.2% decrease in monetary sales and a 17% drop in quantitative sales. Time cigarettes totaled NIS 489 million last, year, amounting to a 5.9% market share.
The Fishman Group, the controlling shareholder in "Globes," is a shareholder in Globrands.
Published by Globes [online], Israel business news - www.globes-online.com - on January 14, 2015
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