Australia Cigarette Market

Australia Cigarette Market Overview:

The Australia cigarette market size reached USD 22.87 Billion in 2024. Looking forward, IMARC Group expects the market to reach USD 27.14 Billion by 2033, exhibiting a growth rate (CAGR) of 1.92% during 2025-2033. The evolving consumer preferences, rising demand for premium product variants, an increase in disposable incomes, the influence of tobacco harm reduction trends, and regulatory adjustments are some of the main factors strengthening the market growth.

Australia Cigarette Market Trends:

Shift to Roll-Your-Own (RYO) Tobacco as a Cheaper Alternative

Australian households spent an average of AUD 982 annually in 2022, or approximately AUD 18.8 per week, on tobacco products. Following the Australian Government’s 2016 decision to implement annual tobacco excise hikes of 12.5% through to 2020, the cost of a standard cigarette pack soared to AUD 40, placing Australia among the countries with the highest cigarette prices globally. This sharp increase has prompted a notable consumer shift toward RYO tobacco, which is seen as a more cost-effective and customizable alternative. The RYO market is experiencing strong growth, driven by budget-conscious smokers seeking better value. In response, manufacturers have diversified their offerings, introducing pouches in various sizes and flavors, along with slim rolling papers and filter tips to maintain premium price points. This shift not only mitigates the impact of declining factory-made cigarette sales but also helps preserve total tobacco consumption by redirecting demand rather than losing it entirely to cessation.

Premiumization and Flavor Innovation in the Combustible Segment

A rising segment of affluent, experience-driven Australian smokers is increasingly opting for premium and super-premium cigarette brands that feature unique flavor capsules, bespoke tobacco blends, and high-end branding. This trend reflects a growing consumer appetite for quality, sensory variety, and exclusivity, with limited-edition flavors and dual-flavor capsule technologies offering enhanced, mid-smoke experiences. As mainstream tobacco sales decline, manufacturers are leveraging this premiumization shift to sustain revenue by investing heavily in high-end R&D and targeted marketing. These upscale products often come in designer packaging with collectible artwork, appealing to lifestyle-focused consumers and aligning with social-media-driven ‘smoke fashion.’ The strategy has proven effective, allowing tobacco companies to maintain profitability and brand prestige despite a drop in average per-capita consumption. This shift underscores the industry's pivot toward value over volume, capturing higher margins from a discerning consumer base willing to pay more for distinctiveness and perceived sophistication.

Australia Cigarette Market Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the market, along with forecasts at the region/country level for 2025-2033. Our report has categorized the market based on type and distribution channel.

Type Insights:

• Light
• Medium
• Others

The report has provided a detailed breakup and analysis of the market based on the type. This includes light, medium, and others.

Distribution Channel Insights:

• Tobacco Shops
• Supermarkets and Hypermarkets
• Convenience Stores
• Online Stores
• Others

A detailed breakup and analysis of the market based on the distribution channel have also been provided in the report. This includes tobacco shops, supermarkets and hypermarkets, convenience stores, online stores, and others.

Regional Insights:

• Australia Capital Territory & New South Wales
• Victoria & Tasmania
• Queensland
• Northern Territory & Southern Australia
• Western Australia

The report has also provided a comprehensive analysis of all the major regional markets, which include Australia Capital Territory & New South Wales, Victoria & Tasmania, Queensland, Northern Territory & Southern Australia, and Western Australia.

Competitive Landscape:

The market research report has also provided a comprehensive analysis of the competitive landscape. Competitive analysis such as market structure, key player positioning, top winning strategies, competitive dashboard, and company evaluation quadrant has been covered in the report. Also, detailed profiles of all major companies have been provided.

Australia Cigarette Market News:

• June 2024: Dr. Reddy’s Laboratories announced that it would acquire Haleon’s non-U.S. nicotine replacement therapy (NRT) portfolio for GBP 500 million. This includes brands like Nicotinell, Nicabate, Habitrol and Thrive, which are available in gum, lozenge and patch forms across countries, including in Australia.
• April 2023: Viva Energy announced its acquisition of OTR Group, aiming to bolster its convenience and mobility retail business in Australia. The deal includes OTR’s Smokemart & GiftBox (SMGB) vertical, which provides tobacco and cigarette wholesale arrangements to OTR and other retail third-party networks.

Australia Cigarette Market Report Coverage:

Key Questions Answered in This Report:

• How has the Australia cigarette market performed so far and how will it perform in the coming years?
• What is the breakup of the Australia cigarette market on the basis of type?
• What is the breakup of the Australia cigarette market on the basis of distribution channel?
• What is the breakup of the Australia cigarette market on the basis of region?
• What are the various stages in the value chain of the Australia cigarette market? 
• What are the key driving factors and challenges in the Australia cigarette market?
• What is the structure of the Australia cigarette market and who are the key players?
• What is the degree of competition in the Australia cigarette market? 

Key Benefits for Stakeholders:

• IMARC’s industry report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the Australia cigarette market from 2019-2033.
• The research report provides the latest information on the market drivers, challenges, and opportunities in the Australia cigarette market.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the Australia cigarette industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.