Uruguay’s economy remained relatively stable in 2024, in contrast to ongoing economic turmoil in neighbouring Argentina. Despite this, the country’s tobacco industry continued to face considerable challenges, including stringent tobacco control legislation and a high tax burden. These factors drove a notable rise in illicit cigarette consumption, with illegal products accounting for over one third of total cigarette volume sales in 2024 - a marked increase compared to previous years. However, the limited availability of alternative nicotine products – with heated tobacco and e-vapour products remaining either unavailable or illegal in Uruguay - reinforced dependence on traditional cigarettes despite their rising costs. At the same time, smoking prevalence remained largely static, despite ongoing public health campaigns.
The tobacco industry in Uruguay experienced to decline in volume terms in 2024. One major factor behind this trend was the growing health and wellness movement, which encouraged many consumers to reduce their cigarette consumption. The market is also subject to strict regulatory constraints: tobacco products cannot be displayed publicly, cigarettes much be sold in plain packaging, and only one variant per brand is permitted in each tobacco category.
Cía Industrial de Tabacos Monte Paz SA, Uruguay’s only domestic tobacco producer, maintained its industry dominance in 2024, driven by its flagship brands Nevada and Coronado, and supported by other key labels such as California, Madison, and Ocean. The player increased its market share in 2024, capitalising on the weakened performance of Abal Hnos, the local distributor for Philip Morris International, and the exit of British American Tobacco (BAT) in August 2024. During the review period, BAT’s presence was limited to Lucky Strike but it reportedly parted ways with the brand, due to dissatisfaction with its local distributor. Attempts to transfer distribution rights to another local company ultimately failed to come to fruition.
Small local grocers represented the most significant distribution channel for cigarettes across Uruguay in 2024. These stores, present in cities, towns, and rural villages, benefit from a high level of accessibility and the ability to sell a variety of grocery items, alongside tobacco. Forecourt retailers, supermarkets, and hypermarkets also play important roles in cigarette sales. Despite Uruguay’s strong anti-tobacco policies, hypermarkets are permitted to sell cigarettes - unlike in some neighbouring countries such as Argentina. Indeed, the channel experienced the most dynamic growth in cigarette sales in 2024, albeit from a relatively low base.
The tobacco market in Uruguay is expected to continue its decline in volume terms over the forecast period. The growing adoption of healthier lifestyles, especially among younger generations, will drive a slow, yet steady reduction in smoking prevalence. Consequently, cigarette sales volumes are forecast to keep falling, following a decade-long downward trend. Growth of the illicit trade will likely also continue to undermine legal sales, as the price gap between legal and smuggled cigarettes remains substantial.
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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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