Tobacco in Latvia
Euromonitor International's Tobacco in Latvia 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.
Buy online to access strategic market analysis and an interactive statistical database of duty paid retail volume and value sales, illicit trade volume, company and brand shares, pricing, distribution and production data.
Tables: 84 | Publication date: Sep 2009
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Executive summary
Despite huge price rise tobacco market continues to grow in 2008
The tobacco market in Latvia has reached a turning point and is being impacted by the Tobacco Monitoring State Programme for 2006-2010, which is currently being implemented by the Latvian government. The key aims of the programme are to limit tobacco consumption by increasing unit prices to EU levels and implementing various anti-smoking campaigns. In 2008 cigarettes experienced considerable excise tax growth, which caused prices to increase significantly. However, volumes still grew as people were unable to quit smoking all at once.
Rapid rise in excise tax causes illicit market to thrive
A significant tax increase was introduced at the same time as the Latvian economy started to enter a downturn. The high rate of inflation caused consumer purchasing power to decrease considerably, while cigarette prices rose by 52% in 2008. These two factors drove growth of illicit trade, which may become a serious threat to legal tobacco sales in the near future. Although illicit trade rose dramatically by 389% in 2007, it did post a decline of 45% in 2008 as at customs there was started a stricter control of contraband attempts.
Consolidation in cigarettes following two mergers in 2008
Numerous mergers and acquisitions have taken place both globally and in the Latvian market over the last 10-15 years. On 18 April 2007 Gallaher Group Plc became a subsidiary of Japan Tobacco Inc, while in 2008 Scandinavian Tobacco SIA changed its name to British American Tobacco Latvia SIA, following the acquisition of the cigarette business of its parent company. The international tobacco company British American Tobacco (BAT) announced at the beginning of 2009 its plans to acquire the cigarette production unit of Danish company Skandinavisk Tobakskompagni. All this activity resulted in intensified competition between several international tobacco giants, and the market became more concentrated among three multinationals - Philip Morris Latvia SIA, British American Tobacco Latvia SIA and JTI Marketing & Sales SIA. The only company which has production facilities in Latvia is British American Tobacco Latvia SIA.
Tobacco specialists remain the main distribution channel
Cigars, cigarillos and smoking tobacco are distributed mainly through tobacco specialists, while the distribution of cigarettes varies. Cigarettes are mainly sold through forecourt retailers and newsagent-tobacconists/kiosks. Supermarkets/hypermarkets and discounters both increased their share in 2008. Internet retailing is neither banned nor popular in Latvia.
Market expected to decline in volume terms
The Tobacco Monitoring State Programme for 2006-2010, which aims to limit tobacco consumption, in combination with declining purchasing power and a downturn in the Latvian economy, is expected to cause volume sales to decline over the forecast period. Consumers are also expected to react to numerous anti-smoking campaigns and the popularisation of a healthy lifestyle. The number of youngsters starting to smoke should also fall while some longstanding smokers are expected to quit. However, the market’s value is still expected to rise slightly because of the planned excise tax increase and change in VAT in Latvia from 18% to 21% in 2009.
Table of contents
TOBACCO IN LATVIA : MARKET INSIGHT
EXECUTIVE SUMMARY
Despite huge price rise tobacco market continues to grow in 2008
Rapid rise in excise tax causes illicit market to thrive
Consolidation in cigarettes following two mergers in 2008
Tobacco specialists remain the main distribution channel
Market expected to decline in volume terms
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
EU directives
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 for Cigarettes
Table 5 Taxation and Duty Levies for Cigars and Cigarillos
Table 6 Taxation and Duty Levies for Pipe Tobacco
Table 7 Taxation and Duty Levies for RYO Tobacco
Table 8 Average Cigarette Pack Price Breakdown: Brand Examples
PRODUCTION/IMPORTS/EXPORTS
Table 9 Trade Statistics – Cigarettes
MARKET INDICATORS
Table 10 Illicit Trade Estimate 2003-2008
MARKET DATA
Table 11 Sales of Tobacco by Sector: Volume 2003-2008
Table 12 Sales of Tobacco by Sector: Value 2003-2008
Table 13 Sales of Tobacco by Sector: % Volume Growth 2003-2008
Table 14 Sales of Tobacco by Sector: % Value Growth 2003-2008
Table 15 Forecast Sales of Tobacco by Sector: Volume 2008-2013
Table 16 Forecast Sales of Tobacco by Sector: Value 2008-2013
Table 17 Forecast Sales of Tobacco by Sector: % Volume Growth 2008-2013
Table 18 Forecast Sales of Tobacco by Sector: % Value Growth 2008-2013
DEFINITIONS
Summary 1 Research Sources
CIGARETTES
Headlines
Trends
Distribution
Competitive Landscape
New Product Developments
Prospects
Sector Background
Cigarettes: Price Bands
Summary 2 Cigarette Price Band Definitions
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 19 Sales of Cigarettes by Tar Level: Volume 2003-2008
Table 20 Sales of Cigarettes by Tar Level: Value 2003-2008
Table 21 Sales of Cigarettes by Tar Level: % Volume Growth 2003-2008
Table 22 Sales of Cigarettes by Tar Level: % Value Growth 2003-2008
Table 23 Sales of Cigarettes by Price Band: % Volume Breakdown 2003-2008
Table 24 Sales of Cigarettes by Standard/Menthol: % Volume Breakdown 2003-2008
Table 25 Sales of Cigarettes by Tobacco Type: % Volume Breakdown 2003-2008
Table 26 Sales of Cigarettes by Filter Vs Non-filter 2003-2008
Table 27 Sales of Filter Cigarettes by Carbon Vs Non-carbon 2003-2008
Table 28 Sales of Cigarettes by Length 2003-2008
Table 29 Sales of Cigarettes by Regular/Slim 2006-2008
Table 30 Sales of Cigarettes by Pack Size 2003-2008
Table 31 Sales of Cigarettes by Pack Type 2003-2008
Table 32 Cigarettes: Production, Imports and Exports: Total Volume 2003-2008
Table 33 Cigarettes Company Shares 2004-2008
Table 34 Cigarettes Brand Shares 2005-2008
Table 35 Sales of Cigarettes by Distribution Format: % Analysis 2003-2008
Table 36 Forecast Sales of Cigarettes by Tar Level: Volume 2008-2013
Table 37 Forecast Sales of Cigarettes by Tar Level: Value 2008-2013
Table 38 Forecast Sales of Cigarettes by Tar Level: % Volume Growth 2008-2013
Table 39 Forecast Sales of Cigarettes by Tar Level: % Value Growth 2008-2013
Table 40 Forecast Sales of Cigarettes by Price Band: % Volume Breakdown 2008-2013
Table 41 Forecast Sales of Cigarettes by Standard/Menthol: % Volume Breakdown 2008-2013
Table 42 Forecast Sales of Cigarettes by Tobacco Type: % Volume Breakdown 2008-2013
Table 43 Forecast Sales of Cigarettes by Filter Vs Non-filter 2008-2013
Table 44 Forecast Sales of Filter Cigarettes by Carbon Vs Non-carbon 2008-2013
Table 45 Forecast Sales of Cigarettes by Length 2008-2013
Table 46 Forecast Sales of Cigarettes by Regular/Slim 2008-2013
Table 47 Forecast Sales of Cigarettes by Pack Size 2008-2013
Table 48 Forecast Sales of Cigarettes by Pack Type 2008-2013
CIGARS AND CIGARILLOS
Headlines
Trends
Distribution
Competitive Landscape
New Product Developments
Prospects
Sector Data
Table 49 Sales of Cigars by Subsector: Volume 2003-2008
Table 50 Sales of Cigars by Subsector: Value 2003-2008
Table 51 Sales of Cigars by Subsector: % Volume Growth 2003-2008
Table 52 Sales of Cigars by Subsector: % Value Growth 2003-2008
Table 53 Company Shares of Cigars Excluding Cigarillos 2004-2008
Table 54 Brand Shares of Cigars Excluding Cigarillos 2005-2008
Table 55 Company Shares of Cigarillos 2004-2008
Table 56 Brand Shares of Cigarillos 2005-2008
Table 57 Sales of Cigars by Distribution Format: % Analysis 2003-2008
Table 58 Forecast Sales of Cigars by Subsector: Volume 2008-2013
Table 59 Forecast Sales of Cigars by Subsector: Value 2008-2013
Table 60 Forecast Sales of Cigars by Subsector: % Volume Growth 2008-2013
Table 61 Forecast Sales of Cigars by Subsector: % Value Growth 2008-2013
SMOKING TOBACCO
Headlines
Trends
Distribution
Competitive Landscape
New Product Developments
Prospects
Sector Data
Table 62 Sales of Smoking Tobacco by Subsector: Volume 2003-2008
Table 63 Sales of Smoking Tobacco by Subsector: Value 2003-2008
Table 64 Sales of Smoking Tobacco by Subsector: % Volume Growth 2003-2008
Table 65 Sales of Smoking Tobacco by Subsector: % Value Growth 2003-2008
Table 66 Company Shares of RYO Tobacco 2004-2008
Table 67 Brand Shares of RYO Tobacco 2005-2008
Table 68 Company Shares of Pipe Tobacco 2004-2008
Table 69 Brand Shares of Pipe Tobacco 2005-2008
Table 70 Sales of Smoking Tobacco by Distribution Format: % Analysis 2003-2008
Table 71 Forecast Sales of Smoking Tobacco by Subsector: Volume 2008-2013
Table 72 Forecast Sales of Smoking Tobacco by Subsector: Value 2008-2013
Table 73 Forecast Sales of Smoking Tobacco by Subsector: % Volume Growth 2008-2013
Table 74 Forecast Sales of Smoking Tobacco by Subsector: % Value Growth 2008-2013
SMOKELESS TOBACCO
Headlines
BRITISH AMERICAN TOBACCO LATVIA SIA
Strategic Direction
Key Facts
Summary 3 British American Tobacco Latvia SIA: Key Facts
Summary 4 British American Tobacco Latvia SIA: Operational Indicators
Company Background
Production
Summary 5 British American Tobacco Latvia SIA: Production Statistics 2007
Competitive Positioning
Summary 6 British American Tobacco Latvia SIA: Competitive Position 2008
PHILIP MORRIS LATVIA SIA
Strategic Direction
Key Facts
Summary 7 Philip Morris Latvia SIA: Key Facts
Summary 8 Philip Morris Latvia SIA: Operational Indicators
Company Background
Production
Competitive Positioning
Summary 9 Philip Morris Latvia SIA: Competitive Position 2008
TABAKAS NAMS GRUPA SIA
Strategic Direction
Key Facts
Summary 10 Tabakas Nams Grupa SIA: Key Facts
Company Background
Production
Competitive Positioning