Tobacco in Taiwan: Cigarette Value Growth Surpasses Volume Growth Due to Price Increases

DUBLIN, Ireland--(Business Wire)--
Research and Markets
(http://www.researchandmarkets.com/reports/c90697) has announced the
addition of Tobacco in Taiwan to their offering.

Euromonitor's Tobacco in Taiwan report offers a comprehensive
guide to the size and shape of the market at a national level. It
provides the latest retail sales data (2001-2006), allowing you to
identify the sectors driving growth. It identifies the leading
companies, the leading brands and offers strategic analysis of key
factors influencing the market - be they new legislative, distribution
or pricing issues. Forecasts to 2011 illustrate how the market is set
to change.

Product coverage includes: cigarettes, cigars and smoking tobacco.

Data coverage: market sizes (historic and forecasts), company
shares and brand shares.

Why buy this report?

- Get a detailed picture of the tobacco industry;

- Pinpoint growth sectors and identify factors driving change;

- Understand the competitive environment, the market's major
players and leading brands;

- Use five-year forecasts to assess how the market is predicted to
develop.

Executive summary

Cigarettes Dominate Tobacco

Taiwan's tobacco market continues to be concentrated almost
exclusively on cigarettes. Despite a more mass-market approach to push
demand for cigars, especially cigarillos, cigars continued to remain
underdeveloped in 2006. In comparison, volume consumption within
cigarettes is very mature.

Cigarette Value Growth Surpasses Volume Growth Due to Price
Increases

In 2005, the Taiwanese government passed a law increasing the
Health and Welfare Tax from NT$5 per pack to NT$10 per pack. The tax
is added directly at the time of purchase, and took effect in February
2006. The implementation had little impact upon overall cigarette
sales, either in terms of volume sales or brand share distribution.

The pressure of increased prices, combined with Taiwan's economic
downturn, forced many multinationals to apply a second round of
cigarette price increases in the second half of 2006. Despite
cigarettes in Taiwan continuing to be relatively cheap when compared
with many other developed countries around the world, regardless of
price band, the price increases led to more demand for economy brands.

Price Increases Fuel Economy Trend

Overall, economy brands were the best performing in 2006. Pall
Mall, West, Winston and Boss all benefited from the trend. The biggest
winner in 2006, however, was Taiwan Tobacco & Liquor Corp. With a
combination of stronger branding for its leading brands and a move by
consumers to switch back to economy brands, the company saw its share
rise. For the first year since Taiwan's WTO entry in 2002, Taiwan
Tobacco & Liquor Corp achieved positive annual growth.

Name Change for Leading Brand

Taiwan Tobacco & Liquor Corp repositioned Long Life Gentle in 2006
to become known simply as Gentle. The change effectively reduced Long
Life's brand share. The change in brand name was smooth, and the
impact positive. By the end of 2006, Gentle had become the third
biggest brand in cigarettes in volume terms.

Demand Expected to Remain Strong

Despite increasing health awareness and anticipated tougher laws
on smoke-free zones, demand for cigarettes is likely to remain steady
to the end of 2011. In the short term, government and
company-initiated price increases will be unlikely. Gentle is expected
to continue to experience strong growth. Brand competition between
immediate rivals, such as Mild Seven and Gentle, and Davidoff and
Dunhill, will become the key focus for most players. The forecast
improvement in the Taiwanese economy will help stimulate demand for
premium brands.

Companies Mentioned:

British American Tobacco Services Ltd Taiwan

Imperial Tobacco Group Plc

JT Tobacco International Taiwan Corp

Taiwan Tobacco & Liquor Corp

For more information visit
here.

Research and Markets
Laura Wood, Senior Manager
Fax: +353 1 4100 980
press@researchandmarkets.com

Copyright Business Wire 2008