Tobacco Product Manufacturing in Germany - Market Research Report (2014-2029)
Frankfurt, Germany
Last Updated: May 2024
WZ C12.00DERevenue
€18.2bn
Past 5-Year Growth
Profit
€XXX.Xm
Employees
6,494
Businesses
16
Wages
€X.Xbn
Tobacco Product Manufacturing in Germany industry analysis
Since 2019, industry sales have fallen by an average of 3.5% per year. The steady decline in tobacco consumption has led to a reduction in the overall market for years, which is primarily driven by price increases as a result of tobacco tax hikes. For example, sales of cigarettes fell sharply in 2022 and 2023 due to further tobacco tax increases. However, a decline in demand was also observed for fine-cut tobacco, cigars and cigarillos in 2023. Inflation led to additional price increases for tobacco products and curbed tobacco consumption. Tobacco consumers turned to cheaper bulk packs, cheaper brands or tried to reduce their consumption. Industry companies also felt an increased cost burden as a result of higher energy prices. In addition, high investments were required to implement the mandatory track-and-trace system. The additional costs had a negative impact on the earnings situation of industry players.A decline in sales of 3% is expected for 2024, which means that industry sales are likely to total 18.2 billion euros. No tax increases are planned for tobacco products in 2024. However, the tax on liquids in e-cigarettes will continue to increase from 2024. As these are a competitive product in the industry, this development is likely to have a positive impact on the industry. Against the backdrop of far-reaching advertising bans, tax increases and bans on flavourings, tobacco product manufacturers are constantly faced with a large number of new regulations and restrictions. Politicians from the traffic light coalition are calling for additional advertising bans and an end to flavours in e-cigarettes. Those in favour of new tobacco advertising bans point to a supposed increase in the number of smokers, particularly among minors, as a result of the coronavirus crisis. However, these study results contrast with the significant decline in cigarette sales in recent years.For the period from 2024 to 2029, IBISWorld expects an average annual decline in turnover of 0.1% and industry turnover of 18.1 billion euros in 2029. The number of industry players is likely to fall slightly, as is the number of employees. The latter is due to technical progress and lower production volumes, which will reduce the need for production workers. Some smokers will be forced to give up smoking due to rising cigarette prices or switch to alternatives such as e-cigarettes. These are cheaper and supposedly less harmful to health, but will be taxed more heavily by 2026, just like smoking tobacco products.
Trends and Insights
- The additional tax on water pipe tobacco that has been in force since January 2022 is making business more difficult. In addition, since July 2022, water pipe tobacco may only be traded in packs of a maximum of 25 grams.
- Tobacco sales in supermarkets and discount stores generate the largest share of industry sales. Tobacco products can be found in the entrance area of most supermarkets and discount stores.
- Despite the many local companies and suppliers in eastern Germany, there is a major problem there with cigarettes imported illegally from eastern Europe. This competition harms domestic producers.
- The number of smokers in Germany is trending downwards. As a result, tobacco processors are competing more and more fiercely for the remaining smokers and therefore potential industry customers.
Industry Overview
Market size and recent performance (2014-2029)
Industry revenue has declined at a CAGR of 3.5 % over the past five years, to reach an estimated €18.2bn in 2024.
Trends and Insights
The tobacco tax on cigarettes has been adjusted again in recent years
- The Federal Government is pushing ahead with measures to further reduce the smoking rate. This includes, in particular, the constant increase in tobacco tax rates, which are set individually for each tobacco product.
- Additional trends and insights available with purchase
Source: IBISWorld
Industry outlook (2024-2029)
Market size is projected to decline over the next five years.
Trends and Insights
Niche products are a major trend in the German tobacco market
- Only those niche products that do not run the risk of being taxed and priced higher are predicted to have growth opportunities.
Biggest companies in the Tobacco Product Manufacturing in Germany
| Company | Market Share (%)
2024 | Revenue (€m)
2024 |
|---|---|---|
Philip Morris GmbH | 7,278.0 | |
Reemtsma Cigarettenfabriken GmbH | 4,544.2 | |
British American Tobacco (Germany) GmbH | 4,228.0 |
To view the market share and analysis for all 5 top companies in this industry, view purchase options.
Products & Services Segmentation
Source: IBISWorld
Industry revenue is measured across several distinct product and services lines, including Cigarettes, Water pipe tobacco, smoking tobacco and smoking tobacco made from tobacco substitutes and Cigars and cigarillos. Cigarettes is the largest segment of the Tobacco Product Manufacturing in Germany.
Trends and Insights
The cigarette segment is the largest product category despite the high regulatory burden
- Cigarettes are a dry product of the tobacco plant rolled, stuffed or folded in paper. Due to the high demand, cigarette sales are subject to many political measures to restrict tobacco consumption.
- More insights available in the full report
Widen you competitive advantage with related industries
Competitors
- Tobacconists in Germany
- E-cigarette Retailing in Germany
Complementors
- Spirit Production in Germany
- Beer Production in Germany
International industries
- Global Cigarette & Tobacco Manufacturing
- Cigarette & Tobacco Manufacturing in the US
- Cigarette & Tobacco Manufacturing in Canada
- Cigarette Manufacturing in China
- Tobacco Product Manufacturing in the EU
Table of Contents
About this industry
Industry definition
The industry includes the processing of tobacco leaves into various tobacco products such as cigarettes or cigars. The manufacture of products from tobacco substitutes and homogenised or reconstituted tobacco also falls under the industry definition. The cultivation of tobacco and the drying of tobacco leaves, on the other hand, are not part of the industry's activities.
What's included in this industry?
CigarettesWater pipe tobacco, smoking tobacco and smoking tobacco made from tobacco substitutesCigars and cigarillosCompanies
Philip Morris GmbHReemtsma Cigarettenfabriken GmbHBritish American Tobacco (Germany) GmbHPurchase this report to view all 5 major companies in this industry.
Related Terms
ELECTRIC CIGARETTE (E-CIGARETTE)FINE-CUT TOBACCO, TWIST TOBACCOSHISHAAEROSOLVAPORISERZIGARILLOIndustry Code
WZ 12.00 - Tobacco Product Manufacturing in Germany
Performance
Get an indication of the industry's health through historical, current and forward-looking trends in the performance indicators that make or break businesses.
Analyst insights
The additional tax on water pipe tobacco that has been in force since January 2022 is making business more difficult. In addition, since July 2022, water pipe tobacco may onl...
In this chapter (4)
- Current Performance
- Outlook
- Volatility
- Life Cycle
Key metrics
- Annual Revenue, Recent Growth, Forecast, Revenue Volatility
- Number of Employees, Recent Growth, Forecast, Employees per Business, Revenue per Employee
- Number of Businesses, Recent Growth, Forecast, Employees per Business, Revenue per Business
- Total Profit, Profit Margin, Profit per Business
Charts
- Revenue, including historical (2014-2023) and forecast (2024-2029)
- Employees, including historical (2014-2023) and forecast (2024-2029)
- Businesses, including historical (2014-2023) and forecast (2024-2029)
- Profit, including historical (2014-2024)
- Industry Volatility vs. Revenue Growth
- Industry Life Cycle
Detailed analysis
- Trends in supply, demand and current events that are driving current industry performance
- Expected trends, economic factors and ongoing events that drive the industry's outlook
- Key success factors for businesses to overcome volatility
- How contribution to GDP, industry saturation, innovation, consolidation, and technology and systems influence the industry's life cycle phase.
Products and Markets
Learn about an industry's products and services, markets and trends in international trade.
Analyst insight
Tobacco sales in supermarkets and discount stores generate the largest share of industry sales. Tobacco products can be found in the entrance area of most supermarkets and di...
In this chapter
- Products & Services
- Major Markets
- International Trade
Key metrics
- Largest market segment and value in 2024
- Product innovation level
- Total imports, level and trend
- Total exports, level and trend
- Trade Balance
Charts
- Products & services segmentation in 2024
- Major market segmentation in 2024
- International trade, including imports by country and exports by country
Detailed analysis
- Trends impacting the recent performance of the industry's various segments
- Innovations in the industry's product or service offering, specialization or delivery method
- Key factors that successful businesses consider in their offerings
- Buying segments and key trends influencing demand for industry products and services
- Recent trends in import and export volumes, country of origin or destination, and expected future trends
Geographic Breakdown
Discover where business activity is most concentrated in an industry and the factors driving these trends to find opportunities and conduct regional benchmarking.
Analyst insights
Despite the many local companies and suppliers in eastern Germany, there is a major problem there with cigarettes imported illegally from eastern Europe. This competition har...
In this chapter (1)
- Business Locations
Charts
- Share of revenue, establishment, wages and employment in each region
- Share of population compared to establishments in each region in 2024
Tables
- Number and share of establishments in each region in 2024
- Number and share of revenue each region accounts for in 2024
- Number and share of wages each region accounts for in 2024
- Number and share of employees in each region in 2024
Detailed analysis
- Geographic spread of the industry across Europe, and trends associated with changes in the business landscape
- Key success factors for businesses to use location to their advantage
Competitive Forces
Get data and insights on what's driving competition in an industry and the challenges industry operators and new entrants may face, with analysis built around Porter's Five Forces framework.
Analyst insights
The number of smokers in Germany is trending downwards. As a result, tobacco processors are competing more and more fiercely for the remaining smokers and therefore potential...
In this chapter (4)
- Concentration
- Barriers to Entry
- Substitutes
- Buyer & Supplier Analysis
Key metrics
- Industry concentration level
- Industry competition level and trend
- Barriers to entry level and trend
- Substitutes level and trend
- Buyer power level and trend
- Supplier power level and trend
Charts
- Market share concentration among the top 4 suppliers from 2019-2024
- Supply chain including upstream supplying industries and downstream buying industries, flow chart
Detailed analysis
- Factors impacting the industry’s level of concentration, such as business distribution, new entrants, or merger and acquisition activity.
- Key success factors for businesses to manage the competitive environment of the industry.
- Challenges that potential industry entrants face such as legal, start-up costs, differentiation, labor/capital intensity and capital expenses.
- Key success factors for potential entrants to overcome barriers to entry.
- Competitive threats from potential substitutes for the industry’s own products and services.
- Key success factors for how successful businesses can compete with substitutes.
- Advantages that buyers have to keep favorable purchasing conditions.
- Advantages that suppliers have to maintain favorable selling conditions.
- Key success factors for how businesses can navigate buyer and supplier power.
Companies
Learn about the performance of the top companies in the industry.
Analyst insights
Philipp Morris is planning to phase out its cigarette production and switch to tobacco heaters and electronic cigarettes. By focussing on risk-reduced products, the company w...
In this chapter
- Market Share Concentration
- Companies
- Company Spotlights
Charts
- Industry market share by company in 2020 through 2024
- Major companies in the industry, including market share, revenue, profit and profit margin in 2024
- Overview of Philip Morris GmbH's performance by revenue, market share and profit margin from 2018 through 2024
- Overview of Reemtsma Cigarettenfabriken GmbH's performance by revenue, market share and profit margin from 2018 through 2024
- Overview of British American Tobacco (Germany) GmbH's performance by revenue, market share and profit margin from 2018 through 2024
- Overview of revenue, market share and profit margin trend for 2 additional companies
Detailed analysis
- Description and key data for Philip Morris GmbH, and factors influencing its performance in the industry
- Description and key data for Reemtsma Cigarettenfabriken GmbH, and factors influencing its performance in the industry
- Description and key data for British American Tobacco (Germany) GmbH, and factors influencing its performance in the industry
- Description, key data and performance trends for 2 additional companies
External Environment
Understand the demographic, economic and regulatory factors that shape how businesses in an industry perform.
Analyst insights
The tobacco tax is based on the Tobacco Tax Act. The tobacco processing companies must purchase so-called tax stamps for their products from the federal government before sel...
In this chapter
- External Drivers
- Regulation & Policy
- Assistance
Key metrics
- Regulation & policy level and trend
- Assistance level and trend
Charts
- Regulation & Policy historical data and forecast (2014-2029)
- Assistance historical data and forecast (2014-2029)
Detailed analysis
- Demographic and macroeconomic factors influencing the industry, including Regulation & Policy and Assistance
- Major types of regulations, regulatory bodies, industry standards or specific regulations impacting requirements for industry operators
- Key governmental and non-governmental groups or policies that may provide some relief for industry operators.
Financial Benchmarks
View average costs for industry operators and compare financial data against an industry's financial benchmarks over time.
Analyst insights
The Tobacco Tax Modernisation Act will have a negative impact on earnings in the future. The development of profits will depend on the extent to which price increases can be ...
In this chapter
- Cost Structure
- Financial Ratios
- Key Ratios
Key metrics
- Profit margin, and how it compares to the sector-wide margin
- Average wages, and how it compares to the sector-wide average wage
- Largest cost component as a percentage of revenue
- Industry average ratios for days' receivables, industry coverage and debt-to-net-worth ratio
Charts
- Average industry operating costs as a share of revenue, including purchases, wages, depreciation, utilities, rent, other costs and profit in 2024
- Average sector operating costs as a share of revenue, including purchases, wages, depreciation, utilities, rent, other costs and profit in 2024
- Investment vs. share of economy
Data tables
- Cash Flow & Debt Service Ratios (2014-2029)
- Revenue per Employee (2014-2029)
- Revenue per Enterprise (2014-2029)
- Employees per Establishment (2014-2029)
- Employees per Enterprise (2014-2029)
- Average Wage (2014-2029)
- Wages/Revenue (2014-2029)
- Establishments per Enterprise (2014-2029)
- IVA/Revenue (2014-2029)
- Imports/Demand (2014-2029)
- Exports/Revenue (2014-2029)
Detailed analysis
- Trends in the cost component for industry operators and their impact on industry costs and profitability
Key Statistics
Industry Data
Data Tables
Including values and annual change:
- Revenue (2014-2029)
- IVA (2014-2029)
- Establishments (2014-2029)
- Enterprises (2014-2029)
- Employment (2014-2029)
- Exports (2014-2029)
- Imports (2014-2029)
- Wages (2014-2029)
Methodology
How are IBISWorld reports created?
IBISWorld has been a leading provider of trusted industry research for over 50 years to the most successful companies worldwide. With offices in Australia, the United States, the United Kingdom, Germany and China, we are proud to have local teams of analysts that conduct research, data analysis and forecasting to produce data-driven industry reports.
Our analysts start with official, verified and publicly available sources of data to build the most accurate picture of each industry. Analysts then leverage their expertise and knowledge of the local markets to synthesize trends into digestible content for IBISWorld readers. Finally, each report is reviewed by one of IBISWorld’s editors, who provide quality assurance to ensure accuracy and readability.
IBISWorld relies on human-verified data and human-written analysis to compile each standard industry report. We do not use generative AI tools to write insights, although members can choose to leverage AI-based tools within the platform to generate additional analysis formats.
What data sources do IBISWorld analysts use?
Each industry report incorporates data and research from government databases, industry-specific sources, industry contacts, and our own proprietary database of statistics and analysis to provide balanced, independent and accurate insights.
Key data sources in Germany include:
- German Federal Statistics Office (Destatis)
- European Statistics Office (Eurostat)
- United Nations Comtrade
Analysts also use industry specific sources to complement catch-all sources, although their perspective may focus on a particular organization or representative body, rather than a clear overview of all industry operations. However, when balanced against other perspectives, industry-specific sources provide insights into industry trends.
These sources include:
- Industry and trade associations
- Industry federations or regulators
- Major industry players annual or quarterly filings
Finally, IBISWorld’s global data scientists maintain a proprietary database of macroeconomic and demand drivers, which our analysts use to help inform industry data and trends. They also maintain a database of statistics and analysis on thousands of industries, which has been built over our more than 50-year history and offers comprehensive insights into long-term trends.
How does IBISWorld forecast its data?
IBISWorld’s analysts and data scientists use the sources above to create forecasts for our proprietary datasets and industry statistics. Depending on the dataset, they may use regression analysis, multivariate analysis, time-series analysis or exponential smoothing techniques to project future data for the industry or driver. Additionally, analysts will leverage their local knowledge of industry operating and regulatory conditions to impart their best judgment on the forecast model.
IBISWorld prides itself on being a trusted, independent source of data, with over 50 years of experience building and maintaining rich datasets and forecasting tools. We are proud to be the keystone source of industry information for thousands of companies across the world.
Learn more about our methodology and data sourcing on the Help Center.
Frequently Asked Questions
Unlock comprehensive answers and precise data upon purchase. View purchase options.
What is the market size of the Tobacco Product Manufacturing industry in Germany in 2024?
The market size of the Tobacco Product Manufacturing industry in Germany is €18.2bn in 2024.
How many businesses are there in the Tobacco Product Manufacturing in Germany industry in 2024?
There are 16 businesses in the Tobacco Product Manufacturing industry in Germany, which has declined at a CAGR of 2.3 % between 2019 and 2024.
Has the Tobacco Product Manufacturing industry in Germany grown or declined over the past 5 years?
The market size of the Tobacco Product Manufacturing industry in Germany has been declining at a CAGR of 3.5 % between 2019 and 2024.
What is the forecast growth of the Tobacco Product Manufacturing industry in Germany over the next 5 years?
Over the next five years, the Tobacco Product Manufacturing industry in Germany is expected to decline.
What are the biggest companies in the Tobacco Product Manufacturing market in Germany?
The biggest companies operating in the Tobacco Product Manufacturing market in Germany are Philip Morris GmbH, Reemtsma Cigarettenfabriken GmbH and British American Tobacco (Germany) GmbH
What does the Tobacco Product Manufacturing in Germany include?
Cigarettes and Water pipe tobacco, smoking tobacco and smoking tobacco made from tobacco substitutes are part of the Tobacco Product Manufacturing industry.
Which companies have the highest market share in the Tobacco Product Manufacturing in Germany?
The company holding the most market share in Germany is Philip Morris GmbH.
How competitive is the Tobacco Product Manufacturing industry in Germany?
The level of competition is high and increasing in the Tobacco Product Manufacturing industry in Germany.
