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: 93 | Publication date: Sep 2008
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive environment
Product coverage
Cigarettes; Cigarettes including RYO; Cigars; Smoking tobacco
Executive summary
Local production falls
In 2007, local cigarettes production decreased in Russia. This followed the significant overproduction in 2006, when tobacco manufacturers overestimated the growth potential of the Russian tobacco market. Companies which reduced their production were generally small local manufacturers of cheap cigarettes. Some of these, including Biyskaya Tabachnaya Fabrika and Astra, closed in 2007. Russian consumers increasingly shifted away from cheap unfiltered cigarettes, which represented the bulk of these companies’ production. Among the multinationals, only Philip Morris International Inc reduced its production slightly in 2007.
Manufacturers target premium cigarettes
Premium cigarettes performed well in 2007. Most new products launched by multinational players were introduced in the premium price band. Slim/superslim cigarettes also posted dynamic volume growth. New product launches of slim premium cigarettes in 2007 included Virginia Slims Uno, Vogue Noire/Blanche and Kent Nanotek.
Consolidation continues
In 2007, Japan Tobacco Inc acquired Gallaher Group Plc (owner of Liggett-Ducat Ltd). The united Japan Tobacco International/Liggett-Ducat Ltd became the leader of the Russian cigarettes in terms of volume sales. However, since neither Japan Tobacco International nor Liggett-Ducat Ltd has a significant presence in premium cigarettes, the united company continued to lose value sales to Philip Morris International Inc and British American Tobacco Russia. This merger was not the only big deal in Russian tobacco. Imperial Tobacco Group Plc announced the successful conclusion of its acquisition of Altadis SA in January 2008.
Heavier tax burden
In 2007, Russia’s State Duma adopted a new law to increase taxation during 2008-2010. The new taxation will have a greater impact on manufacturers of cheap cigarettes. This is because the share of the specific tax (in roubles per 1,000 sticks) will exceed that of the ad valorem constituent. According to industry experts, the increase in taxation is reasonable and should help to make cigarettes inaccessible for young smokers.
Ban on outdoor advertising
Outdoor tobacco advertising was banned in Russia at the start of 2007. Since then, tobacco companies have focused on specialised magazines and retail outlets selling tobacco, where advertising is still allowed. It has become extremely difficult for tobacco companies to launch new brands. Most new launches in 2007 comprised new varieties of existing brands, including Virginia Slims Uno, Kent Nanotek and Camel Natural Flavour.
Large investments in new packaging developments
With tough competition and advertising bans, tobacco packaging is becoming an increasingly important promotional tool. The new trends are a change of the packaging shape and the appearance of non-standard packaging. Leading manufacturers are investing large amounts of money to buy and install equipment for producing cigarettes in unique packaging. The most important developments in 2007 were the appearance of a perfume-type box (Virginia Slims Uno and Glamour), a wallet pack (Kent) and thinner packaging (Kent Nanotek, compact king size format).
Dynamic performance of cigars and cigarillos
In 2007, Russian cigars and cigarillos posted dynamic volume and value growth. The most important factors influencing demand for cigars are increasing purchasing power, a growing fashion for cigar smoking and the increased activities of distributing companies. Although many world-famous brands are already present in Russia, there are still considerable opportunities for new players. Moreover, some existing brands are imported into Russia illegally. It may be prospective for the manufacturers of these brands to become officially established in the tobacco market.
Cigarettes growth to slow down over forecast period
In contrast to the review period, when cigarettes volume sales saw strong growth, cigarettes in Russia is expected to register very moderate volume growth over the forecast period, with growth going into negative figures by 2010 as the market becomes saturated. Value growth will surpass volume growth, as Russians increasingly consume more expensive cigarettes. In addition, prices for cigarettes are expected to rise due to steadily growing tax rates.
Table of contents
TOBACCO IN RUSSIA : MARKET INSIGHT
EXECUTIVE SUMMARY
Local production falls
Manufacturers target premium cigarettes
Consolidation continues
Heavier tax burden
Ban on outdoor advertising
Large investments in new packaging developments
Dynamic performance of cigars and cigarillos
Cigarettes growth to slow down over forecast period
OPERATING ENVIRONMENT
Smoking Prevalence
Table 1 Smoking Prevalence in Population 2002-2007
Table 2 Number of Smokers by Gender 2002-2007
Death by Cause
Legislation
Litigation
Taxation and Duty Levies
Table 3 Taxation and Duty Levies – Cigarettes – 2002-2007
Table 4 Taxation and Duty Levies – Cigarettes – 2007-2010
Table 5 Average Cigarette Pack Price Breakdown: Brand Examples 2007
Production/Imports/Exports
Table 6 Trade Statistics – Cigarettes
The Role and Effect of Cannabis/Marijuana
MARKET INDICATORS
Table 7 Deaths by Diseases of the Respiratory System 2002-2007
Table 8 Deaths from Heart Disease 2002-2007
Table 9 Deaths from Lung Cancer 2002-2007
Table 10 Illicit Trade Estimate 2002-2007
MARKET DATA
Table 11 Sales of Tobacco by Sector: Volume 2002-2007
Table 12 Sales of Tobacco by Sector: Value 2002-2007
Table 13 Sales of Tobacco by Sector: % Volume Growth 2002-2007
Table 14 Sales of Tobacco by Sector: % Value Growth 2002-2007
Table 15 Sales of Cigarettes by Distribution Format: % Analysis 2002-2007
Table 16 Forecast Sales of Tobacco by Sector: Volume 2007-2012
Table 17 Forecast Sales of Tobacco by Sector: Value 2007-2012
Table 18 Forecast Sales of Tobacco by Sector: % Volume Growth 2007-2012
Table 19 Forecast Sales of Tobacco by Sector: % Value Growth 2007-2012
DEFINITIONS
Sources
Summary 1 Research Sources
LOCAL COMPANY PROFILES - RUSSIA
BRITISH AMERICAN TOBACCO RUSSIA - TOBACCO - RUSSIA
STRATEGIC DIRECTION
KEY FACTS
Summary 2 British American Tobacco Russia: Key Facts
Summary 3 British American Tobacco Russia: Operational Indicators
COMPANY BACKGROUND
PRODUCTION BY FACTORY
Summary 4 British American Tobacco Russia: Production Statistics by Factory (billion sticks)
COMPETITIVE POSITIONING
Summary 5 British American Tobacco Russia: Competitive Position 2007
DONSKOI TABAK OAO - TOBACCO - RUSSIA
STRATEGIC DIRECTION
KEY FACTS
Summary 6 Donskoi Tabak OAO: Key Facts
Summary 7 Donskoi Tabak OAO: Operational Indicators
COMPANY BACKGROUND
PRODUCTION BY FACTORY
Summary 8 Donskoi Tabak OAO: Production Statistics by Factory (billion sticks)
COMPETITIVE POSITIONING
Summary 9 Donskoi Tabak OAO: Competitive Position 2007
JAPAN TOBACCO INTERNATIONAL - TOBACCO - RUSSIA
STRATEGIC DIRECTION
KEY FACTS
Summary 10 Japan Tobacco International: Key Facts
Summary 11 Japan Tobacco International: Operational Indicators
COMPANY BACKGROUND
PRODUCTION BY FACTORY
Summary 12 Japan Tobacco International: Production Statistics by Factory (billion sticks)
COMPETITIVE POSITIONING
Summary 13 Japan Tobacco International: Competitive Position 2007
LIGGETT-DUCAT LTD - TOBACCO - RUSSIA
STRATEGIC DIRECTION
KEY FACTS
Summary 14 Liggett-Ducat Ltd: Key Facts
Summary 15 Liggett-Ducat Ltd: Operational Indicators
COMPANY BACKGROUND
PRODUCTION BY FACTORY
Summary 16 Liggett-Ducat Ltd: Production Statistics by Factory (billion sticks)
COMPETITIVE POSITIONING
Summary 17 Liggett-Ducat Ltd: Competitive Position 2007
PHILIP MORRIS INTERNATIONAL INC - TOBACCO - RUSSIA
STRATEGIC DIRECTION
KEY FACTS
Summary 18 Philip Morris International Inc: Key Facts
COMPANY BACKGROUND
PRODUCTION BY FACTORY
Summary 19 Philip Morris International Inc: Production Statistics by Factory (billion sticks)
COMPETITIVE POSITIONING
Summary 20 Philip Morris International Inc: Competitive Position 2007
CIGARETTES IN RUSSIA
HEADLINES
TRENDS
Illicit trade (Cigarettes)
Cigarettes: Price Bands
Summary 21 Cigarette Price Band Definitions
Cigarettes: Filter Splits
Cigarettes: Pack Splits
Distribution
COMPETITIVE LANDSCAPE
New Product Developments
Summary 22 Cigarettes: New Product Launches 2007
PROSPECTS
SECTOR DATA
Table 20 Sales of Cigarettes by Tar Level: Volume 2002-2007
Table 21 Sales of Cigarettes by Tar Level: Value 2002-2007
Table 22 Sales of Cigarettes by Tar Level: % Volume Growth 2002-2007
Table 23 Sales of Cigarettes by Tar Level: % Value Growth 2002-2007
Table 24 Sales of Cigarettes by Price Band: % Volume Breakdown 2002-2007
Table 25 Sales of Cigarettes by Standard/Menthol: % Volume Breakdown 2002-2007
Table 26 Sales of Cigarettes by Tobacco Type: % Volume Breakdown 2002-2007
Table 27 Sales of Cigarettes by Filter Vs Non-filter 2002-2007
Table 28 Sales of Filter Cigarettes by Carbon Vs Non-carbon 2002-2007
Table 29 Sales of Cigarettes by Length 2002-2007
Table 30 Sales of Cigarettes by Regular/Slim 2006-2007
Table 31 Sales of Cigarettes by Pack Size 2002-2007
Table 32 Sales of Cigarettes by Pack Type 2002-2007
Table 33 Cigarettes Company Shares 2003-2007
Table 34 Cigarettes Brand Shares 2004-2007
Table 35 Forecast Sales of Cigarettes by Tar Level: Volume 2007-2012
Table 36 Forecast Sales of Cigarettes by Tar Level: Value 2007-2012
Table 37 Forecast Sales of Cigarettes by Tar Level: % Volume Growth 2007-2012
Table 38 Forecast Sales of Cigarettes by Tar Level: % Value Growth 2007-2012
Table 39 Forecast Sales of Cigarettes by Price Band: % Volume Breakdown 2007-2012
Table 40 Forecast Sales of Cigarettes by Standard/Menthol: % Volume Breakdown 2007-2012
Table 41 Forecast Sales of Cigarettes by Tobacco Type: % Volume Breakdown 2007-2012
Table 42 Forecast Sales of Cigarettes by Filter Vs Non-filter 2007-2012
Table 43 Forecast Sales of Filter Cigarettes by Carbon Vs Non-carbon 2007-2012
Table 44 Forecast Sales of Cigarettes by Length 2007-2012
Table 45 Forecast Sales of Cigarettes by Regular/Slim 2007-2012
Table 46 Forecast Sales of Cigarettes by Pack Size 2007-2012
Table 47 Forecast Sales of Cigarettes by Pack Type 2007-2012
CIGARS IN RUSSIA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
New Product Developments
PROSPECTS
SECTOR DATA
Table 48 Sales of Cigars by Subsector: Volume 2002-2007
Table 49 Sales of Cigars by Subsector: Value 2002-2007
Table 50 Sales of Cigars by Subsector: % Volume Growth 2002-2007
Table 51 Sales of Cigars by Subsector: % Value Growth 2002-2007
Table 52 Company Shares of Cigars Exluding Cigarillos 2003-2007
Table 53 Brand Shares of Cigars Exluding Cigarillos 2004-2007
Table 54 Company Shares of Cigarillos 2003-2007
Table 55 Brand Shares of Cigarillos 2004-2007
Table 56 Forecast Sales of Cigars by Subsector: Volume 2007-2012
Table 57 Forecast Sales of Cigars by Subsector: Value 2007-2012
Table 58 Forecast Sales of Cigars by Subsector: % Volume Growth 2007-2012
Table 59 Forecast Sales of Cigars by Subsector: % Value Growth 2007-2012
SMOKING TOBACCO IN RUSSIA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
New Product Developments
PROSPECTS
SECTOR DATA
Table 60 Sales of Smoking Tobacco by Subsector: Volume 2002-2007
Table 61 Sales of Smoking Tobacco by Subsector: Value 2002-2007
Table 62 Sales of Smoking Tobacco by Subsector: % Volume Growth 2002-2007
Table 63 Sales of Smoking Tobacco by Subsector: % Value Growth 2002-2007
Table 64 Company Shares of RYO Tobacco 2003-2007
Table 65 Brand Shares of RYO Tobacco 2004-2007
Table 66 Company Shares of Pipe Tobacco 2003-2007
Table 67 Brand Shares of Pipe Tobacco 2004-2007
Table 68 Forecast Sales of Smoking Tobacco by Subsector: Volume 2007-2012
Table 69 Forecast Sales of Smoking Tobacco by Subsector: Value 2007-2012
Table 70 Forecast Sales of Smoking Tobacco by Subsector: % Volume Growth 2007-2012
Table 71 Forecast Sales of Smoking Tobacco by Subsector: % Value Growth 2007-2012