Tobacco Industry in Guatemala

The tobacco industry in Guatemala is a complex and dynamic landscape, marked by a mix of traditional practices and emerging trends. From the rise of new products like e-cigarettes and premium cigars to the challenges posed by illegal cigarettes and regulatory battles, the industry is constantly evolving. Despite having some of the weakest tobacco control policies worldwide, Guatemala is a fascinating case study of how market forces, policy changes, and consumer preferences interact to shape the tobacco industry. This article will delve into these aspects, providing a comprehensive overview of the tobacco industry in Guatemala.

Early Beginnings: Tobacco Cultivation and Production

Tobacco cultivation in Guatemala dates back to the 1960s. According to the Food and Agriculture Organization (FAO), raw tobacco production in the country increased from 2,200 tons in 1961 to almost 30,000 tons in recent years.

The Rise of the Cigarette Industry

The cigarette industry in Guatemala began to take shape in the 1930s with the establishment of Tabacalera Centroamericana S.A. (TACASA) in the city of Quetzaltenango. Over the years, TACASA became a significant player in the regional cigarette manufacturing industry.

Major Players: TACASA and Others

TACASA was the only cigarette manufacturer in the country until 2012. Today, it imports and markets its products in Guatemala. Other tobacco companies have also established a presence in the country, contributing to the diversity of the industry.

Tobacco Production and Marketing

Tobacco production in Guatemala is divided into two crops and is conducted during the months of June and May . The increase in tobacco production over the years has been attributed to an increase in demand from foreign manufacturers .

The Impact of Illicit Trade and Smuggling

The tobacco industry in Guatemala has faced challenges due to illicit trade and smuggling. The closure of the only tobacco factory in the country in 2012 was attributed to increased cigarette smuggling.

Smoking Prevalence Trends

The prevalence of smoking in Guatemala has been declining over the years. In 2020, the smoking rate was 10.90%, a 0.1% decline from 2019 .

The Shift Towards Smoke-Free Alternatives

In recent years, there has been a shift towards smoke-free alternatives in Guatemala. TACASA, for instance, began marketing IQOS, a smoke-free product, in 2017 .

The Smoke-Free Law and Its Compliance

Guatemala implemented a smoke-free law in 2009, banning smoking in enclosed public places and workplaces . However, compliance with the law has been decreasing over the years.

Restrictions on Tobacco Advertising and Sales

In Guatemala, the sale of tobacco products is prohibited to persons under the age of 18 . There are also restrictions on tobacco advertising, promotion, and sponsorship.

The Influence of the Tobacco Industry on Policy Development

The tobacco industry in Guatemala has been involved in drafting the law, which has been stalled in Congress since 2019 . This involvement has raised concerns about the industry’s influence on policy development.

Challenges and Opportunities

The tobacco industry in Guatemala faces several challenges, including illicit trade, compliance with tobacco control legislation, and changing consumer preferences. However, there are also opportunities, such as the growing demand for smoke-free alternatives.

The Role of Innovation and Technology

Innovation and technology are playing an increasingly important role in the tobacco industry. The introduction of smoke-free products like IQOS is an example of how technology is shaping the future of the industry in Guatemala.

what is the current state of the tobacco industry in guatemala

The tobacco industry in Guatemala has a complex history and continues to play a significant role in the country’s economy. The only tobacco factory in the country was closed in 2012, with the tobacco industry attributing this closure to increased cigarette smuggling. However, the World Bank reports that the tobacco industry often exaggerates estimates of illicit trade to argue against tobacco tax increases.

Despite the closure of the factory, the tobacco products market in Guatemala is projected to grow by 5.19% from 2024 to 2028, resulting in a market volume of US$274.9m in 2028. This growth is expected despite the fact that smoking prevalence rates among the adult population in Guatemala have not shown any substantial changes in recent years.

The tobacco industry in Guatemala is dominated by a few major players . New tobacco products, such as capsule cigarettes, electronic cigarettes (e-cigarettes), and heated tobacco products (HTPs), are now readily available in the country. These products are often advertised at the point of sale, particularly in high socio-economic status neighborhoods .

In terms of tobacco control, Guatemala became a Party to the WHO Framework Convention on Tobacco Control in 2006. However, the country currently lacks a mechanism to regulate the interaction between the government and the tobacco industry. This lack of regulation has allowed the tobacco industry to introduce new products like IQOS, PMI s heated tobacco product .

what are the main tobacco companies operating in guatemala

The main tobacco companies operating in Guatemala are Tabacalera Centro Americana, S.A. (TACASA) and Tabacalera Nacional, S.A. (TANASA). These companies are subsidiaries of two of the world’s largest tobacco corporations, Philip Morris International and British American Tobacco, respectively. These companies are registered to manufacture, import, and sell cigarettes in the country. Despite the closure of the only tobacco factory in 2012, these companies continue to have a presence in the Guatemalan market.

Conclusion

The tobacco industry in Guatemala has a complex and dynamic history. Despite facing numerous challenges, it continues to adapt and evolve. As the industry navigates the future, it will be interesting to see how it leverages innovation and technology to meet changing consumer preferences and regulatory requirements.

Statistics

Tobacco Consumption and Production

The estimated annual cigarette consumption in Guatemala increased from 1.1 billion cigarettes in 1980 to 2.2 billion cigarettes in 2006-2012.

Tobacco Market Forecast

The Tobacco Products market in Guatemala is projected to grow by 5.19% (2024-2028), resulting in a market volume of US$274.9m in 2028.

FAQs

Questions and Answers

Who are the major players in the tobacco industry in Guatemala?
Only two companies dominate the tobacco industry in Guatemala .
What is the estimated annual cigarette consumption in Guatemala?
The estimated annual cigarette consumption in Guatemala increased from 1.1 billion cigarettes in 1980 to 2.2 billion cigarettes in 2006-2012 .
What is the mean daily cigarette consumption per smoker in Guatemala?
The mean daily cigarette consumption per smoker in Guatemala was about 10.5 cigarettes in 2012 .
How does the government of Guatemala regulate the interaction with the tobacco industry?
Currently, Guatemala does not have any mechanism to regulate the interaction between the government and the tobacco industry.
What is the prevalence of tobacco use among students in Guatemala City?
The prevalence of current tobacco use among students in Guatemala City is 16.5%.

Books

Sources of Information

Key References

World Bank report on Guatemala: Overview of Tobacco Use, Tobacco Control Legislation, and Taxation https://documents1.worldbank.org/curated/pt/966181561061563530/pdf/Guatemala-Overview-of-Tobacco-Use-Tobacco-Control-Legislation-and-Taxation.pdf
Global Tobacco Industry Interference Index 2020 https://globaltobaccoindex.org/country/GT
Global Youth Tobacco Survey 2015 https://extranet.who.int/ncdsmicrodata/index.php/catalog/413
Statista Market Forecast for Tobacco Products in Guatemala https://www.statista.com/outlook/cmo/tobacco-products/guatemala

Citations

Authoritative Citations

World Bank report on Guatemala: Overview of Tobacco Use, Tobacco Control Legislation, and Taxation https://documents1.worldbank.org/curated/pt/966181561061563530/pdf/Guatemala-Overview-of-Tobacco-Use-Tobacco-Control-Legislation-and-Taxation.pdf
Global Tobacco Industry Interference Index 2020 https://globaltobaccoindex.org/country/GT
Global Youth Tobacco Survey 2015 https://extranet.who.int/ncdsmicrodata/index.php/catalog/413
Statista Market Forecast for Tobacco Products in Guatemala https://www.statista.com/outlook/cmo/tobacco-products/guatemala