Tobacco in Azerbaijan
Euromonitor International's Tobacco in Azerbaijan market report offers a comprehensive guide to the size and shape of the market at a national level. It provides the latest retail sales data, allowing you to identify the sectors driving growth. It identifies the leading companies, the leading brands and offers strategic analysis of key factors influencing the market - be they new product developments, packaging innovations, economic/lifestyle influences, distribution or pricing issues. Forecasts illustrate how the market is set to change.
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Tables: 83 | Publication date: Nov 2009
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Executive summary
Healthy growth stimulated by still-high smoking rate
All categories of tobacco showed healthy growth in volume and current value terms in 2008. Market development of tobacco was underpinned by still-high smoking rates, despite the presence of anti-tobacco legislation. The cigarettes category, as the largest sector, continued its strong performance in terms of consumption despite reaching saturation level. Smoking tobacco and cigars benefited from new product launches due to the rising interest in these products among consumers from higher-income groups. Relatively new tobacco products, such as chewing tobacco and dry snuff, appeared in Azerbaijan in 2008, however with still negligible impact. Cigarette prices did not change dynamically, since cigarettes are represented largely by domestic brands and thus manufacturers were inclined to keep prices low in order to sustain a high level of demand. Cigars and smoking tobacco did, however, experience a significant price increase, associated with the fact that these products are imported and available mainly through tobacco specialist stores, which are subject to increased rent payments.
Slim, lower tar and flavoured cigarettes grow
Towards the end of 2008, the cigarette category saw a shift towards lower tar, flavoured and slim cigarettes. This reflected a desire amongst consumers to use cigarettes with supposedly fewer negative effects as they became increasingly conscious of the health issues related to smoking, following increased levels of education and easier access to informative sources. Simultaneously, the development of slim/superslim, glossy filter and flavoured cigarettes appealed to female smokers, since women feel more comfortable smoking these products. From the end of 2007 onwards, mid, low and ultra low tar cigarettes witnessed an influx of new brands. A switch from high tar to mid and low tar cigarettes resulted in the highest volume growth for low tar cigarettes in 2008.
Domestic cigarettes prevail, imports strive further
Although the cigarettes category is led by giant domestic enterprise European-Tobacco Baku JSC, those companies operating imported brands are striving further to increase their share. Manufacturers have capitalised upon the recent trends of increased awareness of the importance of a healthy lifestyle, launching lower tar, flavoured and slim cigarettes. At the end of the review period, European-Tobacco Baku JSC introduced its new Caprice brand, incorporating all these properties. Overall the tobacco market witnessed a flow of imported brands. New imported cigarette brands actively followed the emerging desire for lower tar, flavoured and slim formats. Cigars and smoking tobacco sales remain entirely in the hands of international operators.
Stable distribution pattern of tobacco products
Towards the end of 2008, the main distribution channels for cigarettes are discounters, supermarkets/hypermarkets, newsagent-tobacconists/kiosks, tobacco specialists and independent small grocers. Street vendors and kiosks benefit from selling cigarettes and small cigars, such as Captain Black (British American Tobacco Plc) and King Edward (Swisher International Group Inc), by the stick, alongside whole packs. Such sales created a favourable environment for those curious smokers who wished to try cigars, offering an affordable option. Large and standard cigars and smoking tobacco, alongside smoking tools such as pipes, are only sold through tobacco specialists.
Tougher anti-tobacco policies will slow market performance
The Azerbaijan tobacco market is expected to be negatively impacted by the enforcement of stricter anti-tobacco measures. In the early part of the forecast period the National Parliament is expected to adopt a new anti-tobacco law which bans smoking in places of entertainment, cafés, restaurants, parks, public transport, in corridors and any other enclosed public spaces where more than four people gather. Experts from domestic cigarette-producing companies assume that this will lead to a decrease in the consumption of cigarettes. As a result, volume growth rates in tobacco sectors are expected to slow down during the forecast period, except cigars whose sales will be underpinned mainly by the interest and selling cigars by the stick will be the main tool in driving volume sales. Nevertheless, the tobacco market will sustain its overall positive development during the forecast period and slim cigarettes are anticipated to post a strong performance in view of new product developments, rising awareness and growing consumption rates.
Table of contents
TOBACCO IN AZERBAIJAN : MARKET INSIGHT
EXECUTIVE SUMMARY
Healthy growth stimulated by still-high smoking rate
Slim, lower tar and flavoured cigarettes grow
Domestic cigarettes prevail, imports strive further
Stable distribution pattern of tobacco products
Tougher anti-tobacco policies will slow market performance
OPERATING ENVIRONMENT
Smoking Prevalence
Table 1 Smoking Prevalence in Population 2003-2008
Table 2 Number of Smokers by Gender 2003-2008
Death by Cause
Table 3 Death by Cause 2004-2008
The Role and Effect of Cannabis/Marijuana
LEGISLATION
Legislative overview/FCTC ratification
Legislation: Azerbaijan law
Minimum legal smoking age
Tar levels
Health warnings
Duty paid packet marks
Advertising & Sponsorship
Smoking in public places
Litigation
TAXATION AND DUTY LEVIES
Table 4 Taxation and Duty Levies
Table 5 Average Cigarette Pack Price Breakdown: 2008
PRODUCTION/IMPORTS/EXPORTS
Table 6 Trade Statistics – Cigarettes
Table 7 Trade Statistics – Tobacco Leaf
MARKET INDICATORS
Table 8 Illicit Trade Estimate 2003-2008
MARKET DATA
Table 9 Sales of Tobacco by Sector: Volume 2003-2008
Table 10 Sales of Tobacco by Sector: Value 2003-2008
Table 11 Sales of Tobacco by Sector: % Volume Growth 2003-2008
Table 12 Sales of Tobacco by Sector: % Value Growth 2003-2008
Table 13 Forecast Sales of Tobacco by Sector: Volume 2008-2013
Table 14 Forecast Sales of Tobacco by Sector: Value 2008-2013
Table 15 Forecast Sales of Tobacco by Sector: % Volume Growth 2008-2013
Table 16 Forecast Sales of Tobacco by Sector: % Value Growth 2008-2013
DEFINITIONS
Summary 1 Research Sources
LOCAL COMPANY PROFILES - AZERBAIJAN
CAHAN TOBACCO LTD - TOBACCO - AZERBAIJAN
STRATEGIC DIRECTION
KEY FACTS
Summary 2 Cahan Tobacco Ltd: Key Facts
Summary 3 Cahan Tobacco Ltd: Operational Indicators
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
Summary 4 Cahan Tobacco Ltd: Competitive Position 2008
EUROPEAN TOBACCO-BAKU JSC - TOBACCO - AZERBAIJAN
STRATEGIC DIRECTION
KEY FACTS
Summary 5 European Tobacco-Baku JSC: Key Facts
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
Summary 6 European Tobacco-Baku JSC: Competitive Position 2008
CIGARETTES IN AZERBAIJAN
HEADLINES
TRENDS
DISTRIBUTION
COMPETITIVE LANDSCAPE
NEW PRODUCT DEVELOPMENTS
Summary 7 Cigarettes - New Product Launches 2008
PROSPECTS
SECTOR BACKGROUND
Cigarettes: Illicit trade
Cigarettes: Price Bands
Summary 8 Cigarette Price Band Definitions 2008
Cigarettes: Menthol/standard
Cigarettes: Filter/non-filter
Cigarettes: Carbon/standard filter
Cigarettes: Filter length
Cigarettes: Slims/superslims vs regular
Cigarettes: Pack size
Cigarettes: Pack type
SECTOR DATA
Table 17 Sales of Cigarettes by Tar Level: Volume 2003-2008
Table 18 Sales of Cigarettes by Tar Level: Value 2003-2008
Table 19 Sales of Cigarettes by Tar Level: % Volume Growth 2003-2008
Table 20 Sales of Cigarettes by Tar Level: % Value Growth 2003-2008
Table 21 Sales of Cigarettes by Price Band: % Volume Breakdown 2003-2008
Table 22 Sales of Cigarettes by Standard/Menthol: % Volume Breakdown 2003-2008
Table 23 Sales of Cigarettes by Tobacco Type: % Volume Breakdown 2003-2008
Table 24 Sales of Cigarettes by Filter Vs Non-filter 2003-2008
Table 25 Sales of Filter Cigarettes by Carbon Vs Non-carbon 2003-2008
Table 26 Sales of Cigarettes by Length 2003-2008
Table 27 Sales of Cigarettes by Regular/Slim 2006-2008
Table 28 Sales of Cigarettes by Pack Size 2003-2008
Table 29 Sales of Cigarettes by Pack Type 2003-2008
Table 30 Cigarettes: Production, Imports and Exports: Total Volume 2003-2008
Table 31 Cigarettes Company Shares 2004-2008
Table 32 Cigarettes Brand Shares 2005-2008
Table 33 Sales of Cigarettes by Distribution Format: % Analysis 2003-2008
Table 34 Forecast Sales of Cigarettes by Tar Level: Volume 2008-2013
Table 35 Forecast Sales of Cigarettes by Tar Level: Value 2008-2013
Table 36 Forecast Sales of Cigarettes by Tar Level: % Volume Growth 2008-2013
Table 37 Forecast Sales of Cigarettes by Tar Level: % Value Growth 2008-2013
Table 38 Forecast Sales of Cigarettes by Price Band: % Volume Breakdown 2008-2013
Table 39 Forecast Sales of Cigarettes by Standard/Menthol: % Volume Breakdown 2008-2013
Table 40 Forecast Sales of Cigarettes by Tobacco Type: % Volume Breakdown 2008-2013
Table 41 Forecast Sales of Cigarettes by Filter Vs Non-filter 2008-2013
Table 42 Forecast Sales of Filter Cigarettes by Carbon Vs Non-carbon 2008-2013
Table 43 Forecast Sales of Cigarettes by Length 2008-2013
Table 44 Forecast Sales of Cigarettes by Regular/Slim 2008-2013
Table 45 Forecast Sales of Cigarettes by Pack Size 2008-2013
Table 46 Forecast Sales of Cigarettes by Pack Type 2008-2013
CIGARS IN AZERBAIJAN
HEADLINES
TRENDS
DISTRIBUTION
COMPETITIVE LANDSCAPE
NEW PRODUCT DEVELOPMENTS
Summary 9 Cigars - New Product Launches 2008
PROSPECTS
SECTOR DATA
Table 47 Sales of Cigars by Subsector: Volume 2003-2008
Table 48 Sales of Cigars by Subsector: Value 2003-2008
Table 49 Sales of Cigars by Subsector: % Volume Growth 2003-2008
Table 50 Sales of Cigars by Subsector: % Value Growth 2003-2008
Table 51 Company Shares of Cigars Excluding Cigarillos 2004-2008
Table 52 Brand Shares of Cigars Excluding Cigarillos 2005-2008
Table 53 Company Shares of Cigarillos 2004-2008
Table 54 Brand Shares of Cigarillos 2005-2008
Table 55 Sales of Cigars by Distribution Format: % Analysis 2003-2008
Table 56 Forecast Sales of Cigars by Subsector: Volume 2008-2013
Table 57 Forecast Sales of Cigars by Subsector: Value 2008-2013
Table 58 Forecast Sales of Cigars by Subsector: % Volume Growth 2008-2013
Table 59 Forecast Sales of Cigars by Subsector: % Value Growth 2008-2013
SMOKING TOBACCO IN AZERBAIJAN
HEADLINES
TRENDS
DISTRIBUTION
COMPETITIVE LANDSCAPE
NEW PRODUCT DEVELOPMENTS
Summary 10 Smoking Tobacco - New Product Launches 2008
PROSPECTS
SECTOR DATA
Table 60 Sales of Smoking Tobacco by Subsector: Volume 2003-2008
Table 61 Sales of Smoking Tobacco by Subsector: Value 2003-2008
Table 62 Sales of Smoking Tobacco by Subsector: % Volume Growth 2003-2008
Table 63 Sales of Smoking Tobacco by Subsector: % Value Growth 2003-2008
Table 64 Company Shares of RYO Tobacco 2004-2008
Table 65 Brand Shares of RYO Tobacco 2005-2008
Table 66 Company Shares of Pipe Tobacco 2004-2008
Table 67 Brand Shares of Pipe Tobacco 2005-2008
Table 68 Sales of Smoking Tobacco by Distribution Format: % Analysis 2003-2008
Table 69 Forecast Sales of Smoking Tobacco by Subsector: Volume 2008-2013
Table 70 Forecast Sales of Smoking Tobacco by Subsector: Value 2008-2013
Table 71 Forecast Sales of Smoking Tobacco by Subsector: % Volume Growth 2008-2013
Table 72 Forecast Sales of Smoking Tobacco by Subsector: % Value Growth 2008-2013
SMOKELESS TOBACCO IN AZERBAIJAN
HEADLINES
TRENDS
DISTRIBUTION
COMPETITIVE LANDSCAPE
NEW PRODUCT DEVELOPMENTS
Summary 11 Smokeless Tobacco - New Product Launches 2008
PROSPECTS