Consumption of cigarettes continues to decline in the Czech Republic
The trend of the declining consumption of cigarettes, which started in the country in 2008, continued in 2013 and is expected to persist towards 2018. The volume sales drop within cigarettes is mainly attributable to the reduction of smoking among Czech smokers. An effort to reduce their spending, constantly rising prices of cigarettes and a worsened economic situation in the country were the main factors which drove the decreasing consumption of cigarettes over the review period and in 2013.
Trend of trading down persists
In reaction to the constant price rises of cigarettes (and tobacco products), Czech consumers increasingly preferred economy products within cigarettes over the review period. This trend was followed by producers who started to focus on the economy segment and adjust their product offers. As a result, some mid-priced brands were ranked into the economy segment and many brand variants in the lower price band appeared on the market over the review period. Among these latest activities include the introduction of West Compact and the broadening of the economy line of Benson & Hedges by an additive-free variant in 2013.
Switch to RYO tobacco on the rise
Although the taxation of smoking tobacco is relatively high in the Czech Republic (compared with other EU countries) and increased further in 2013, RYO tobacco remained significantly cheaper than cigarettes. This fact (supported by the effort of many Czechs to economise) resulted in a rise in demand for RYO tobacco over the review period. In 2013, this trend continued and is expected to strengthen further at the beginning of the forecast period as a significant price increase of cigarettes is expected.
Philip Morris CR continues to lose ground
Although Philip Morris CR remained the clear leader of cigarettes in 2013, it registered further volume share decline in 2013 (as it did over the whole review period). This decline was mainly attributable to a consistent drop in sales of traditional Czech brands, including Petra, Start and Sparta. In reaction to this development, Philip Morris CR optimised its brand portfolio in 2013. The company finished production of its Petra brand and renamed the Start brand to Start by Chesterfield at the end of the year.
Significant increase in taxation of cigarettes is expected
Although excise tax on tobacco products increased in January 2012 and 2013, further significant increase (especially for cigarettes) is expected for 2014 and/or 2015. Although the newly elected government promised at the end of 2013 that it will not increase taxes further, it is unlikely that it will be able to fulfil this promise in terms of taxation of cigarettes due to the obligation of the Czech Republic to follow the EU directive on minimum excise tax from January 2014. Although the (old) government prepared further tax increases from January 2014, this will not be enough to fulfil the desired minimum due to the Czech National Bank’s intervention which depreciated the Czech koruna in November 2013. For this reason, a further rise in excise tax for cigarettes is expected to be implemented in the second half of 2014 and/or at the beginning of 2015.
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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.