After robust GDP growth in 2023, for 2024, economic growth decelerated, reaching 2.9%. This was highly influenced by the suspension of activities at the First Quantum copper mining company and recurring droughts that affected transit through the Panama Canal. Activities, such as tourism, transportation, construction, real estate, and financial services performed positively, contributing to the dynamism in internal consumption, including that of tobacco.
During 2024, both volume and value sales of tobacco decreased, largely influenced by the steep decline in sales of cigarettes, that account for the majority of industry sales. The country has tight tobacco regulations and high taxes, which heavily impact prices, making them unaffordable to many Panamanians. These policies have exacerbated the illegal market which comprises 91% of the consumed cigarettes in the country.
Philip Morris remains the largest player in tobacco products, supported by its Marlboro and Chesterfield brands. In 2024, the company gained industry share by focusing on its mid-priced brand and reducing prices, in order to counteract the effects of illicit trade.
During the review period, the distribution channels for tobacco products, including cigarettes, cigars, and e-vapour products, have remained largely unchanged. In 2024, small local grocers and supermarkets remain the largest channels in sales of cigarettes, while retail e-commerce experienced a decline due to legal restrictions on displaying cigarette images and online promotions. Similarly, in Panama, the distribution landscape for cigars, cigarillos, and smoking tobacco remains stable, with food/drink/tobacco specialists serving as the primary channel. E-vapour products are mainly sold through tobacco specialists and retail e-commerce platforms.
Over the forecast period, retail volume sales of tobacco are expected to decline, primarily due to the government’s ongoing anti-smoking initiatives which have significantly reduced smoking prevalence. Additionally, the recent lifting of the ban on e-vapour products is likely to further diminish demand, as many Panamanians are shifting to these reduced-risk alternatives. Furthermore, the high taxes imposed on cigarettes will continue to restrict sales in the legal market, while levels of contraband are anticipated to remain high.
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Understand the latest market trends and future growth opportunities for the Tobacco industry in Panama with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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Data and analysis in this report provides further detailed coverage dedicated to the following key categories, where applicable:
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Tobacco
Passport Tobacco covers the seven major tobacco categories: Cigarettes, Cigars & Cigarillos, Smoking tobacco (made up of Pipe tobacco and RYO tobacco), Smokeless Tobacco (snuff and chewing tobacco), E-Vapour Products (closed and open); Heated Tobacco; and Tobacco Free Oral Nicotine. Smoking paraphernalia such as pipes, rolling papers, lighters or matches, etc., are not included, nor are nicotine replacement therapy (NRT) products, which are part of Euromonitor's Passport Consumer Healthcare database.
See all of our definitionsThis report originates from Passport, our Tobacco research and analysis database.
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