In 2024, Portugal’s tobacco market benefited from by a positive economic environment, influenced by legislative reforms, including reductions in personal income tax that positively impacted net salaries. These measures were accompanied by wage increases in the private sector and salary adjustments across various public sector roles. However, rising housing prices and high cost of living made consumers more cautious in their spending habits, with a shift towards lower-priced options.
Tobacco volume sales in Portugal grew in 2024, thanks to strong demand for non-combustible alternatives, which offset declines in traditional cigarettes. Heated tobacco products maintained stable pricing, making them a cost-effective choice, supported by lower-cost brands like PMI’s Delia for IQOS. At the same time, companies such as PMI and BAT innovated by launching new flavoured, non-tobacco options compatible with heated devices. The evolving e-vapour products market also attracted new entrants, reflecting ongoing diversification away from combustible tobacco. Additionally, a surge in tourism boosted consumption, particularly within newer product categories.
Tabaqueira SA Empresa Industrial de Tabacos SA, a subsidiary of Philip Morris International Inc (PMI), remained the leading player in Portugal’s tobacco market in 2024. Its dominance is supported by a strong presence across nearly all industry categories and continuous investment in innovation. Tabaqueira increased its market share during the year, driven by the significant growth of heated tobacco, where it holds a leading position, as well as by its successful entry into flavoured tobacco-free oral nicotine, as well as e-vapour products with Veev One and Veev Now in both disposable and rechargeable closed-system formats.
Grocery retailers - including forecourt retailers, food/drink/tobacco specialists, and small local grocers - emerged as the leading channel for tobacco sales in Portugal. Their broad geographic presence across the country makes them highly accessible, offering consumers convenience along with a wide range of brands. Forecourt retailers benefited from the convenience of allowing consumers to purchase tobacco while refuelling their vehicles, combined with the option to pay by card - an advantage not always available in smaller tobacco specialist shops, particularly for low-value purchases like a single pack of cigarettes. Forecourts also often allow bulk purchases (such as cartons of 10 packs) and are favoured for their extended opening hours, offering additional flexibility to consumers.
Tobacco sales in Portugal are expected to register modest growth in constant value terms (at 2024 prices) over the forecast period. This will be primarily driven by rising average unit prices - largely due to tax increases and higher raw material costs - as well as market diversification into alternative nicotine products. Cigarettes, still the dominant category by volume, will continue to decline due to increasing health concerns and the expanding availability of reduced-risk alternatives. Indeed, the industry is expected to intensify efforts to transition consumers away from combustible tobacco towards novel nicotine delivery systems, with a particular focus on heated tobacco, closed-system e-vapour devices, and nicotine pouches.
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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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