CRISIL says more workplace occupations can boost cigarette sales.

Anand Kulkarni, director, CRISIL Ratings, emphasized the role of physical workplace occupation in driving cigarette sales when he said, “The recovery of employees returning to the office continues to pick up pace, with expected average work The occupancy rate is expected to reach 65.70 percent this fiscal, compared to around 40 percent last fiscal. Additionally, stability in government taxes, which significantly affects demand, will ready to support growth. years.”

In the current fiscal, the organized segment of the cigarette industry is expected to achieve sales volumes not seen in a decade, helped by tax stabilization. Between FY 2013 and 2018, substantial increases in levies, including excise duty and GST, led to a decline in the share of organized cigarette sales.

Although the Union Budget 2023-24 has increased the national calamity emergency duty on cigarettes by 16 per cent, the actual impact on the industry is minimal, estimated at 1-2 per cent. Market players have absorbed the impact through a modest price hike of 3-5 percent for the mid-premium and premium categories.

Organized players within the industry are diversifying their product portfolios by introducing variants of existing brands and introducing entirely new brands aimed at the mid-premium and premium segments. They are also promoting innovation by introducing new flavors, smaller packaging options, and additives designed to reduce the harshness and odor associated with cigarette smoke.

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