ASH NEW ZEALAND Tobacco Returns Analysis 2013 1 TOBACCO
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ASH NEW ZEALAND Tobacco Returns Analysis 2013 TOBACCO RETURNS ANALYSIS 2013 Tobacco manufacturers and importers in New Zealand are required to file their annual tobacco returns pursuant to section 35 of the Smokefree Environments Act 1990. The tobacco returns consist of two components – Schedule A and Schedule B. Schedule A is the information about ingredients and amounts used in their tobacco products. Schedule B is the company list of all their products, retail price and sale quantity We analysed data from Schedule B in order to understand the brand positioning of the major tobacco companies. This includes analysis of retail price, sale volume and estimated sales returned of all tobacco brands. Market share also is estimated based on this data. This analysis accounted for cigarette and loose leaf tobacco products sold within New Zealand (or domestic market). Information provided by tobacco companies may vary and hence the results of the analysis. British American Tobacco New Zealand (BATNZ) provided recommended retail prices as at January 2013 while Imperial Tobacco New Zealand and Philip Morris provided theirs as at December 2013. This had resulted in artificially higher estimates of average retail price and sale return for BATNZ products due to the January 2014 tax increase. Having considered this, most of the results on overall tobacco market in this analysis were presented according to the sale quantity and hence better accuracy. Fourteen companies filed their tobacco returns in 2013. As this analysis only included cigarette and loose leaf tobacco products, three companies were excluded as they sold cigar or other tobacco products. Tobacco Returns 2012 can be accessed through the National Drug Policy New Zealand website (http://www.ndp.govt.nz/moh.nsf/indexcm/ndp-tobacco-returns-2012 ). Abbreviations: BATNZ – British American Tobacco New Zealand; ITNZ – Imperial Tobacco New Zealand; PMNZ – Philip Morris New Zealand 1 ASH NEW ZEALAND Tobacco Returns Analysis 2013 BRITISH AMERICAN TOBACCO NEW ZEALAND (BATNZ) BRAND POSITIONING (CIGARETTE) BRITISH AMERICAN TOBACCO NZ TOBACCO RETURN (CIGARETTE) 2013 50% $1.40 45% $1.16 40% $1.20 $0.97 $1.00 $0.99 $0.99 $1.00 35% $0.94 $0.92 $0.87 $1.00 $0.82 30% $0.77 $0.80 (%) 25% NZD ($) 20% 31.1% 26.4% $0.60 15% 32.5% 26.0% $0.40 10% 11.4% 11.1% 9.0% 12.5% 6.5% 4.3% $0.20 5% 10.1% 8.3% 6.6% 3.6% 0% $0.00 Brand PERCENTAGE OF COMPANY SALE QUANTITY BY BRAND (%) PERCENTAGE OF COMPANY SALE RETURN BY BRAND (NZD$) AVERAGE RETAIL PRICE (NZD$) PER STICK Figure 1 Average retail price per stick and estimation of company cigarette sale return were based on the value of recommended retail price provided by the tobacco companies. Date of recommended retail price for BAT products was January 2014 (after tobacco tax increase in January 2014) 2 ASH NEW ZEALAND Tobacco Returns Analysis 2013 BRITISH AMERICAN TOBACCO NEW ZEALAND (BATNZ) BRAND POSITIONING (CIGARETTE) In 2013, BATNZ released 14 different brands for sale in NZ cigarette market. The average price per stick for the company products ranged from $0.77 to $1.16. The median price per stick of BATNZ cigarette brand was $0.97. The average price per stick for Pall Mall and Holiday and Benson & Hedges were $0.82, $0.87 and $0.77 respectively in 2013. Freedom was the cheapest BATNZ brand ($0.77 per stick) while Vogue was the most expensive BATNZ brand ($1.16 per stick). Pall Mall (31.07% of company sale quantity) remained the most popular cigarette brands sold in NZ in 2013. This is followed by Holiday (26.36% of company sale quantity) and Benson & Hedges (11.38% of company sale quantity). Around two-third per cent of sale quantity of the Pall Mall brand came from the variants Baseline. The average retail price per stick of Baseline was $0.78 in 2013. Table 2 gives a breakdown of the Pall Mall brand by its major variants. AVERAGE PERCENTAGE OF PERCENTAGE OF ESTIMATED SALES RETAIL PRICE SALE QUANTITY BY COMPANY SALE COMPANY SALE BRAND RETURN BY BRAND (NZD$) PER BRAND (STICKS) QUANTITY BY BRAND RETURN BY BRAND (NZD$) STICK (%) (NZD$) PALL MALL $0.82 440,523,000 32.52% $355,988,070 31.07% HOLIDAY $0.87 352,589,000 26.03% $302,071,953 26.36% FREEDOM $0.77 168,747,000 12.46% $130,430,966 11.38% BENSON & HEDGES $0.94 137,338,700 10.14% $126,641,491 11.05% WINFIELD $0.92 112,334,000 8.29% $103,011,836 8.99% DUNHILL $0.97 88,940,000 6.57% $74,233,510 6.48% ROTHMANS $1.00 49,281,000 3.64% $49,059,319 4.28% LUCKY STRIKE $0.99 2,181,000 0.16% $2,148,285 0.19% VOGUE $1.16 1,196,000 0.088% $1,387,360 0.121% KENT $0.99 561,000 0.041% $552,585 0.048% SPORTSMAN n/a 300,600 0.022% n/a n/a STATEEXPRESS 555 $1.00 222,000 0.016% $220,890 0.019% TOPAZ n/a 132,800 0.010% n/a n/a CAMEO n/a 120,400 0.009% n/a n/a BATNZ TOTAL 1,354,466,500 100% $1,145,746,265 100% Table 1 Average retail price per stick and estimation of company cigarette sale return were based on the value of recommended retail price provided by the tobacco companies. Date of recommended retail price for BAT products was January 2014 (after tobacco tax increase in January 2014) 3 ASH NEW ZEALAND Tobacco Returns Analysis 2013 BRITISH AMERICAN TOBACCO NEW ZEALAND (BATNZ) BRAND POSITIONING OF PALL MALL (CIGARETTE) AVERAGE SALE QUANTITY BY PERCENTAGE OF ESTIMATED SALES PERCENTAGE OF RETAIL PRICE BRAND VARIANT BRAND VARIANT COMPANY SALE RETURN BY BRAND COMPANY SALE (NZD$) PER (STICKS) QUANTITY (%) (NZD$) RETURN (NZD$) STICK PALL MALL $0.88 145,980,000 10.78% $124,287,170 10.85% PALL MALL BASELINE $0.78 294,543,000 21.75% $231,700,900 20.22% PALL MALL TOTAL $0.82 440,523,000 32.52% $355,988,070 31.07% Table 2 Average retail price per stick and estimation of company cigarette sale return were based on the value of recommended retail price provided by the tobacco companies. Date of recommended retail price for BAT products was January 2014 (after tobacco tax increase in January 2014) 4 ASH NEW ZEALAND Tobacco Returns Analysis 2013 IMPERIALTOBACCO NEW ZEALAND (ITNZ) BRAND POSITIONING (CIGARETTE) IMPERIAL TOBACCO NEW ZEALAND TOBACCO RETRUN (CIGARETTE) 2013 50% $0.93 $1.00 $0.89 $0.85 45% $0.90 $0.79 $0.76 $0.76 $0.78 40% $0.73 $0.80 35% $0.70 30% $0.60 (%) 48.5% NZD($) 25% 49.5% $0.50 20% $0.40 29.3% 15% 28.7% $0.30 10% 13.8% $0.20 14.0% 5% $0.10 4.6%5.3% 2.5% 0.5% 0.3% 0.3% 0% 2.3% 0.6% $0.00 BRAND JPS HORIZON JOHN PETER WEST CAMEL DAVIDOFF BRANDON JACKSON Brand PERCENTAGE OF COMPANY SALE QUANTITY BY BRAND (%) PERCENTAGE OF COMPANY SALE RETURN BY BRAND (NZD$) AVERAGE RETAIL PRICE (NZD$) PER STICK Figure 2 Average retail price per stick and estimation of company cigarette sale return were based on the value of recommended retail price provided by the tobacco companies. Date of recommended retail price for ITNZ products was 31 December 2013 (before tobacco tax increase in 2014) 5 ASH NEW ZEALAND Tobacco Returns Analysis 2013 IMPERIALTOBACCO NEW ZEALAND (ITNZ) BRAND POSITIONING (CIGARETTE) ITNZ released 8 different cigarette brands for sale in NZ cigarette market in 2013. The average retail price per stick for ITNZ products ranged from $0.73 to $0.93. The median average price per stick was $0.78. The new brand, WEST, was the cheapest brand that cost $0.73 per stick on average. Davidoff remained the most expensive brands ($0.93 per stick on average). In 2013, JPS remained the most popular brand of ITNZ (49.47% of company sale quantity) followed by Horizon (28.65% of company sale quantity) and John Brandon (14.01% of company sale quantity). The average retail price per stick for JPS, Horizon and John Brandon were $0.76, $0.79 and $0.76 respectively. AVERAGE PERCENTAGE OF PERCENTAGE OF ESTIMATED SALES RETAIL PRICE SALE QUANTITY BY COMPANY SALE COMPANY SALE BRAND RETURN BY BRAND (NZD$) PER BRAND (STICKS) QUANTITY BY RETURN BY BRAND (NZD$) STICK BRAND (%) (NZD$) JPS $0.76 186,099,503 49.47% $140,472,107 48.48% HORIZON $0.79 107,783,355 28.65% $84,770,106 29.26% JOHN BRANDON $0.76 52,688,290 14.01% $39,871,548 13.76% PETER JACKSON $0.85 17,354,715 4.61% $15,223,721 5.25% WEST $0.73 9,348,560 2.49% $6,777,706 2.34% CAMEL $0.89 1,977,400 0.53% $1,759,886 0.61% DAVIDOFF $0.93 942,760 0.25% $872,053 0.30% SUPERKINGS $0.78 560 0.00015% $436.80 0.00015% ITNZ TOTAL 376,195,143 100% $289,747,564 100% Table 3 Average retail price per stick and estimation of company cigarette sale return were based on the value of recommended retail price provided by the tobacco companies. Date of recommended retail price for ITNZ products was 31 December 2013 (before tobacco tax increase in 2014) 6 ASH NEW ZEALAND Tobacco Returns Analysis 2013 PHILIP MORRIS NEW ZEALAND (PMNZ) BRAND POSITIONING (CIGARETTE) PHILIP MORRIS TOBACCO NZ TOBACCO RETURN (CIGARETTE) 2013 100% $1.00 $0.90 90% $0.90 80% $0.71 $0.70 $0.80 70% $0.70 60% $0.60 (%) NZD($) 50% $0.50 40% $0.40 30% 57.2% $0.30 62.2% 20% 36.5% 32.2% $0.20 10% $0.10 6.4% 5.5% 0% $0.00 BRAND MARLBORO LONGBEACH Brand PERCENTAGE OF COMPANY SALE QUANTITY BY BRAND (%) PERCENTAGE OF COMPANY SALE RETURN BY BRAND (NZD$) AVERAGE RETAIL PRICE (NZD$) PER STICK Figure 3 Average retail price per stick and estimation of company cigarette sale return were based on the value of recommended retail price provided by the tobacco companies.