Tobacco in Russia
Euromonitor International's Tobacco in Russia 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: 86 | Publication date: Jan 2010
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Executive summary
Recession
Over the review period, Russia was widely reported as being one of the fastest growing economies in the world and the sixth largest economy in Europe, as the country witnessed a period of continued development which brought rising incomes, falls in unemployment, declining poverty, increasing foreign investment and an unprecedented boom in consumer markets. Much of this growth was underpinned by artificially high oil prices and a stable global economy. With economies across the world now having fallen into recession as the global credit crunch has unfolded, Russia is encountering its most severe economic upset since the collapse of its currency in 1998. Demand for natural resources has stabilised, bringing about the readjustment of commodity prices, and Russia has been left exposed with an underdeveloped manufacturing sector, a skewed trade balance and its macroeconomic stability undermined by the slowing global economy. This will undoubtedly impact on Russia’s targets for economic growth, particularly given its overdependence on oil exports. It will also hinder plans to equalise the pronounced wealth divides in the country, affect planned governmental projects to further improve social conditions and may stand to fundamentally shake consumer confidence, impacting on markets throughout the economy.
Russia ratifies World Health Organisation FCTC treaty
In 2008 Russia ratified the World Health Organisation Framework Convention on Tobacco Control, which was designed to tackle the global tobacco epidemic. The treaty will require Russia to undertake new measures to address the prevalence of smoking in the country within five years, through advertising restrictions and more strictly controlled sales, the introduction of higher taxes on tobacco products and concerted government involvement in generating anti-smoking sentiment amongst the public. Although Russia is now obliged to execute these measures, the high level of incidence of smoking combined with the sheer size of the country will make these steps difficult to undertake effectively and efficiently. This will also mark a dramatic turnaround for the country, which has until now hardly invested in anti-smoking advertising or in public education concerning the dangers of smoking. International tobacco companies have also been notable investors in Russia and this source of funding may prove difficult to live without for a country experiencing economic strife.
Russians still trading up
Despite the economic crisis gripping the country, the move by Russian consumers to trade up to premium tobacco products continued unabated. Premium cigarettes, luxury cigars and cigarillos and smoking tobacco all saw notable growth in both value and volume terms as Russians appeared to cultivate a taste for higher quality and more sophisticated products. Whether this is due to the country being notoriously addicted to nicotine, as in the 1980s when cigarette smokers took to the streets of three cities in response to cigarette shortages, causing Gorbachev to appeal for an emergency shipment, whether the reality of the crisis has yet to really hit home after the extended period of apparent increases in prosperity, or whether it is simply the case that cigarettes remain inherently affordable, since they have yet to return to their pre-1998 levels, the fact remains that this premiumisation looks set to continue into the forecast period, supporting further strong value growth in the more expensive portions of the market.
Competitive environment narrows
In 2007 Japan Tobacco Inc acquired Gallaher Group Plc, owner of Liggett-Ducat Ltd. The united Japan Tobacco International and Liggett-Ducat Ltd became the leader of Russian cigarettes in terms of volume sales; Since neither Japan Tobacco International nor Liggett-Ducat Ltd has a significant presence in premium cigarettes, the united company did not show significant growth of value sales. A further merger occurred in 2008 when Imperial Tobacco Group Plc announced the successful conclusion of its acquisition of Altadis SA. This took place in a climate of companies fighting to consolidate their positions in the market as global attitudes towards smoking shift.
Forecasts look promising
Despite the fact that cigarettes overall will see a decline in volume sales, the strong gains expected to be seen in most premium sections of the market. This will come about as Russians are more willing to spend increasing amounts on higher quality tobacco products as their tastes become more sophisticated and exacting, based on an extended period of sustained economic growth over the forecast period, while further planned tax increases will raise unit prices, supporting value growth.
Table of contents
TOBACCO IN RUSSIA : MARKET INSIGHT
EXECUTIVE SUMMARY
Recession
Russia ratifies World Health Organisation FCTC treaty
Russians still trading up
Competitive environment narrows
Forecasts look promising
OPERATING ENVIRONMENT
Smoking Prevalence
Death by Cause
The Role and Effect of Cannabis/Marijuana
LEGISLATION
Legislative overview/ FCTC ratification
Minimum legal smoking age
Tar levels
Health warnings
Duty paid packet marks
Advertising & Sponsorship
Smoking in public places
Litigation
TAXATION AND DUTY LEVIES
Summary 1 Taxation and Duty Levies
Table 1 Average Cigarette Pack Price Breakdown: Brand Examples 2007
PRODUCTION/IMPORTS/EXPORTS
Table 2 Trade Statistics – Cigarettes
MARKET INDICATORS
Table 3 Illicit Trade Estimate 2003-2008
MARKET DATA
Table 4 Sales of Tobacco by Sector: Volume 2003-2008
Table 5 Sales of Tobacco by Sector: Value 2003-2008
Table 6 Sales of Tobacco by Sector: % Volume Growth 2003-2008
Table 7 Sales of Tobacco by Sector: % Value Growth 2003-2008
Table 8 Forecast Sales of Tobacco by Sector: Volume 2008-2013
Table 9 Forecast Sales of Tobacco by Sector: Value 2008-2013
Table 10 Forecast Sales of Tobacco by Sector: % Volume Growth 2008-2013
Table 11 Forecast Sales of Tobacco by Sector: % Value Growth 2008-2013
DEFINITIONS
Summary 2 Research Sources
LOCAL COMPANY PROFILES - RUSSIA
BRITISH AMERICAN TOBACCO RUSSIA - TOBACCO - RUSSIA
STRATEGIC DIRECTION
KEY FACTS
Summary 3 British American Tobacco Russia: Key Facts
Summary 4 British American Tobacco Russia: Operational Indicators
COMPANY BACKGROUND
PRODUCTION BY FACTORY
Summary 5 British American Tobacco Russia: Production Statistics by Factory (billion sticks)
COMPETITIVE POSITIONING
Summary 6 British American Tobacco Russia: Competitive Position 2008
DONSKOI TABAK OAO - TOBACCO - RUSSIA
STRATEGIC DIRECTION
KEY FACTS
Summary 7 Donskoi Tabak OAO: Key Facts
Summary 8 Donskoi Tabak OAO: Operational Indicators
COMPANY BACKGROUND
PRODUCTION BY FACTORY
Summary 9 Donskoi Tabak OAO: Production Statistics by Factory (billion sticks)
COMPETITIVE POSITIONING
Summary 10 Donskoi Tabak OAO: Competitive Position 2008
JAPAN TOBACCO INTERNATIONAL - TOBACCO - RUSSIA
STRATEGIC DIRECTION
KEY FACTS
Summary 11 Japan Tobacco International: Key Facts
Summary 12 Japan Tobacco International: Operational Indicators
COMPANY BACKGROUND
PRODUCTION BY FACTORY
Summary 13 Japan Tobacco International: Production Statistics by Factory (billion sticks)
COMPETITIVE POSITIONING
Summary 14 Japan Tobacco International: Competitive Position 2008
LIGGETT-DUCAT LTD - TOBACCO - RUSSIA
STRATEGIC DIRECTION
KEY FACTS
Summary 15 Liggett-Ducat Ltd: Key Facts
Summary 16 Liggett-Ducat Ltd: Operational Indicators
COMPANY BACKGROUND
PRODUCTION BY FACTORY
Summary 17 Liggett-Ducat Ltd: Production Statistics by Factory (billion sticks)
COMPETITIVE POSITIONING
Summary 18 Liggett-Ducat Ltd: Competitive Position 2008
CIGARETTES IN RUSSIA
HEADLINES
TRENDS
DISTRIBUTION
COMPETITIVE LANDSCAPE
NEW PRODUCT DEVELOPMENTS
PROSPECTS
SECTOR BACKGROUND
Cigarettes: Illicit trade
Cigarettes: Price Bands
Summary 19 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 12 Sales of Cigarettes by Tar Level: Volume 2003-2008
Table 13 Sales of Cigarettes by Tar Level: Value 2003-2008
Table 14 Sales of Cigarettes by Tar Level: % Volume Growth 2003-2008
Table 15 Sales of Cigarettes by Tar Level: % Value Growth 2003-2008
Table 16 Sales of Cigarettes by Price Band: % Volume Breakdown 2003-2008
Table 17 Sales of Cigarettes by Standard/Menthol: % Volume Breakdown 2003-2008
Table 18 Sales of Cigarettes by Tobacco Type: % Volume Breakdown 2003-2008
Table 19 Sales of Cigarettes by Filter Vs Non-filter 2003-2008
Table 20 Sales of Filter Cigarettes by Carbon Vs Non-carbon 2003-2008
Table 21 Sales of Cigarettes by Length 2003-2008
Table 22 Sales of Cigarettes by Regular/Slim 2006-2008
Table 23 Sales of Cigarettes by Pack Size 2003-2008
Table 24 Sales of Cigarettes by Pack Type 2003-2008
Table 25 Cigarettes: Production, Imports and Exports: Total Volume 2003-2008
Table 26 Cigarettes Company Shares 2004-2008
Table 27 Cigarettes Brand Shares 2005-2008
Table 28 Sales of Cigarettes by Distribution Format: % Analysis 2003-2008
Table 29 Forecast Sales of Cigarettes by Tar Level: Volume 2008-2013
Table 30 Forecast Sales of Cigarettes by Tar Level: Value 2008-2013
Table 31 Forecast Sales of Cigarettes by Tar Level: % Volume Growth 2008-2013
Table 32 Forecast Sales of Cigarettes by Tar Level: % Value Growth 2008-2013
Table 33 Forecast Sales of Cigarettes by Price Band: % Volume Breakdown 2008-2013
Table 34 Forecast Sales of Cigarettes by Standard/Menthol: % Volume Breakdown 2008-2013
Table 35 Forecast Sales of Cigarettes by Tobacco Type: % Volume Breakdown 2008-2013
Table 36 Forecast Sales of Cigarettes by Filter Vs Non-filter 2008-2013
Table 37 Forecast Sales of Filter Cigarettes by Carbon Vs Non-carbon 2008-2013
Table 38 Forecast Sales of Cigarettes by Length 2008-2013
Table 39 Forecast Sales of Cigarettes by Regular/Slim 2008-2013
Table 40 Forecast Sales of Cigarettes by Pack Size 2008-2013
Table 41 Forecast Sales of Cigarettes by Pack Type 2008-2013
CIGARS IN RUSSIA
HEADLINES
TRENDS
DISTRIBUTION
COMPETITIVE LANDSCAPE
NEW PRODUCT DEVELOPMENTS
PROSPECTS
SECTOR DATA
Table 42 Sales of Cigars by Subsector: Volume 2003-2008
Table 43 Sales of Cigars by Subsector: Value 2003-2008
Table 44 Sales of Cigars by Subsector: % Volume Growth 2003-2008
Table 45 Sales of Cigars by Subsector: % Value Growth 2003-2008
Table 46 Company Shares of Cigars Excluding Cigarillos 2004-2008
Table 47 Brand Shares of Cigars Excluding Cigarillos 2005-2008
Table 48 Company Shares of Cigarillos 2004-2008
Table 49 Brand Shares of Cigarillos 2005-2008
Table 50 Sales of Cigars by Distribution Format: % Analysis 2003-2008
Table 51 Forecast Sales of Cigars by Subsector: Volume 2008-2013
Table 52 Forecast Sales of Cigars by Subsector: Value 2008-2013
Table 53 Forecast Sales of Cigars by Subsector: % Volume Growth 2008-2013
Table 54 Forecast Sales of Cigars by Subsector: % Value Growth 2008-2013
SMOKING TOBACCO IN RUSSIA
HEADLINES
TRENDS
DISTRIBUTION
COMPETITIVE LANDSCAPE
NEW PRODUCT DEVELOPMENTS
PROSPECTS
SECTOR DATA
Table 55 Sales of Smoking Tobacco by Subsector: Volume 2003-2008
Table 56 Sales of Smoking Tobacco by Subsector: Value 2003-2008
Table 57 Sales of Smoking Tobacco by Subsector: % Volume Growth 2003-2008
Table 58 Sales of Smoking Tobacco by Subsector: % Value Growth 2003-2008
Table 59 Company Shares of RYO Tobacco 2004-2008
Table 60 Brand Shares of RYO Tobacco 2005-2008
Table 61 Company Shares of Pipe Tobacco 2004-2008
Table 62 Brand Shares of Pipe Tobacco 2005-2008
Table 63 Sales of Smoking Tobacco by Distribution Format: % Analysis 2003-2008
Table 64 Forecast Sales of Smoking Tobacco by Subsector: Volume 2008-2013
Table 65 Forecast Sales of Smoking Tobacco by Subsector: Value 2008-2013
Table 66 Forecast Sales of Smoking Tobacco by Subsector: % Volume Growth 2008-2013
Table 67 Forecast Sales of Smoking Tobacco by Subsector: % Value Growth 2008-2013