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Tabacos de la Cordillera SA in Tobacco (Costa Rica)

New C&M analysis: Tobacco (Costa Rica) Tabacos de la Cordillera SA Company Profile

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2014-03-18 22:31:02 - Tabacos de la Cordillera SA in Tobacco (Costa Rica) - a new company profile report on

Tabacos de la Cordillera is ranked second in Costa Rica´s cigar market in terms of volume sales. The broad availability combined with good quality of the cigars and relatively accessible prices of the products has resulted in the company becoming one the major players in the cigar industry. The volume share of cigar sales in Costa Rica has steadily increased over recent years as a direct result of the high quality of the company´s products combined by the extensive distribution network in the market place. The company is positioning itself as an alternative to the local and region brands on offer. The approval of tobacco control legislation during the second half of 2012 made cigarette consumption less convenient and significantly



more expensive for local smokers, negatively impacting the retail volume sales of these products throughout the country. In addition to the sudden increase in the unit price of tobacco due to the enforcement of a new excise tax, the bans for smoking in public locations (including bars and restaurants) and the additional advertising and distribution restrictions shall continue to affect sales potential of cigarettes in the short-term.

The use of further levels of segmentation and the offer of more innovative features (especially in the case of menthol capsule filters) continued to encourage younger smokers to become interested in specific products. As smokers now tend to be less loyal to specific brands, they are becoming more attracted to cigarettes that are capable of adapting to different consumption occasions, offering them a more indulgent and differentiated smoking experience.

While cigarette sales in Costa Rica continued to be dominated by two of the world´s major tobacco manufacturers, British American Tobacco Caribbean & Central America was better able to capitalise on the ongoing changes in the operative environment, using innovation, global flagship brands and specific proposals to attract younger and higher-end smokers. Even though Tabacalera Costarricense SA (a subsidiary of Philip Morris International Inc) continues to be the overall leader, the popularity of its traditional local brand Derby continues to be threatened by the increasing offer of British American Tobacco Caribbean & Central America´s global flagship brands, which are capable of offering further levels of segmentation and have successfully captured the attention of younger smokers.

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Mike King
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