Consumption of cigarettes declines in 2014 although at a slower pace than in 2013
Consumption of cigarettes continued to decline in 2014 albeit at slower pace than the volume drops witnessed in 2012 and 2013. This improved performance can be attributed to the fact that a certain group of Czech consumers simply like cigarettes and are not willing to give them up. Manufacturers of cigarettes continued to maintain consumer interest with the introduction of cigarettes with capsules and duo capsules in the filter in order to meet the latest demand for these types. Smoking tobacco recorded the highest value growth in 2014, followed closely by vapour devices.
The switch to RYO tobacco continues and vapour devices performs well
Prices of tobacco products continued to rise in 2014 as the Czech National Bank devalued the Czech korun in November 2013 and the government introduced two waves of excise tax increases. With the rising prices of cigarettes more Czech smokers switched to RYO tobacco as, although higher taxation also applied to smoking tobacco, RYO tobacco remained a cheaper alternative to cigarettes. Vapour devices generated great interest among local smokers as it offered a less expensive and relatively healthier way of smoking compared to cigarettes and RYO cigarettes. In March 2014, the Chamber of Electronic Smoking (KELK) was established to support manufacturers and distributors of vapour devices.
Philip Morris increases sales in 2014
Philip Morris lost one percentage point in its volume share in cigarettes in 2013 but succeeded in regaining the lost share in 2014. To reverse declining sales Philip Morris adjusted its brand portfolio in 2013 and this paid off. Philip Morris and British American Tobacco recorded the highest volume share gains in RYO tobacco in 2014. Both companies benefited from introducing RYO tobacco products in 2012 and 2013. They broadened their brand portfolios within RYO tobacco using brands which were well-established in cigarettes in the country and many Czech smokers switched to these new RYO tobacco products as they knew the flavours from cigarettes.
Newsagents-tobacconists/kiosks remains the most important channel for cigarettes, tobacco specialists leads in cigars and smoking tobacco, while internet retailing leads in vapour devices
Newsagents-tobacconists/kiosks remained the most important distribution channel for cigarettes in the Czech Republic in 2014, followed by tobacco specialists. Newsagents-tobacconists/kiosks continued to benefit from its proximity and accessibility to consumers. Tobacco specialists took the largest volume share in cigars and smoking tobacco. Internet retailing was the leading channel for vapour devices, accounting for 72% of value sales in 2014. In addition to vapour devices, there is great potential for internet retailing within cigar/cigarillos and smoking tobacco. Online shops are expected to continue to offer competitive prices, permanent promotional discounts and will likely introduce more loyalty programmes.
Vapour devices and RYO tobacco expected to record the most dynamic development by 2019
Tobacco is predicted to record a negligible decline in total value sales at constant 2014 prices over the forecast period. While consumption of cigarettes is anticipated to decline over the forecast period, volume sales of cigars, smoking tobacco and vapour devices are expected to grow. The declining volume sales of cigarettes can be attributed to an increase in consumption of less expensive RYO cigarettes due to further excise (and thus price) rises and increasing usage of vapour devices due to developing health awareness among Czechs.
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Discover the latest market trends and uncover sources of future market growth for the Tobacco industry in Czech Republic with research from Euromonitor's team of in-country analysts.
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The Tobacco in Czech Republic market research report includes:
- Analysis of key supply-side and demand trends
- Detailed segmentation of international and local products
- Historic volumes and values, company and brand market shares
- Five year forecasts of market trends and market growth
- Production, imports by origin, exports by destination
- Robust and transparent market research methodology, conducted in-country
Our market research reports answer questions such as:
- What is the market size of Tobacco in Czech Republic?
- What are the major brands in Czech Republic?
- Which sector of the tobacco products market is the largest by value sales in Czech Republic?
- Which sector of the tobacco products market has been growing the fastest, by volume and value, in Czech Republic?
- Which sector is the most heavily taxed in Czech Republic?
- Which companies dominate in the total tobacco market in Czech Republic in terms of market share?
- What is the distribution channel split for the tobacco products market in Czech Republic?
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This industry report originates from Passport, our Tobacco market research database.