Executive Summary

Jul 2018
PROSPECTS
Recognising illicit trade is an urgent issue

At the end of 2017, the governments of two major entities in Bosnia-Herzegovina: Federation of Bosnia-Herzegovina and Republic of Srpska concluded that the excise hike policy in place was motivating growth in illicit trade, which was beginning to affect growth of tobacco excise revenues. In reaction, the governments agreed to instruct the Indirect Tax Authority to adjust the excise hike, lowering the pace of excise growth until illicit trade is placed under control.

Dominant mindset of consumers is to seek affordability

Illicit trade of cigarettes grew at a double-digit rate at the end of the review period. Furthermore, illicit sales of smoking tobacco, which is an even more popular alternative to cigarettes, soared throughout the review period.

Premium cigarettes grow increasingly affordable relative to economy alternatives

During the course of the review period, there was a clear trend of premium cigarettes more than doubling its share of total cigarettes, while economy products lost ground. At first glance, it makes little sense that consumers are buying more premium cigarettes despite not having to suffer constant price increases.

COMPETITIVE LANDSCAPE
British American Tobacco makes strong effort to consolidate regional tobacco processing potential

British American Tobacco focused on consolidating regional tobacco processing during the review period, starting by taking over the tobacco business from the largest regional manufacturer Adris Grupa and following through with the acquisition of Fabrika Duhana Sarajevo and a range of Bulgartabac’s brands including all those manufactured by Fabrika Duvana Banja Luka. The aftermath of the process is that several highly popular regional brands were withdrawn, or rather replaced by British American Tobacco’s international brands, but also specifically for Bosnia-Herzegovina that Fabrika Duvana Banja Luka is no longer manufacturing tobacco products.

Philip Morris adjusts strategy in reaction to British American Tobacco’s activity

While British American Tobacco focused on growth through acquisition of regional manufacturing capacities and brands, Philip Morris retained its overall leadership of cigarettes in Bosnia-Herzegovina, fine-tuning its product range throughout the review period to align it with key developing trends such as the shift towards premium products, legislative restrictions and changes in the distribution landscape. By acquiring regional and domestic players in cigarettes, British American Tobacco also bought into several of the largest kiosk chains in Bosnia-Herzegovina, including iNovine, Tobacco Press and Lafka.

Marlboro Red Upgrade soars to the top of brand rankings

In 2017, Marlboro Red Upgrade (Philip Morris) took over the leading brand ranking in cigarettes, after the most recognisable domestic brand Drina sa Denifine Filterom continued its decline following British American Tobacco’s takeover of Fabrika Duhana Sarajevo. The general model British American Tobacco is using in the region is to favour international brands over those domestic or regionally-recognisable.

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Overview

Discover the latest market trends and uncover sources of future market growth for the Cigarettes industry in Bosnia and Herzegovina with research from Euromonitor's team of in-country analysts.

Find hidden opportunities in the most current research data available, understand competitive threats with our detailed market analysis, and plan your corporate strategy with our expert qualitative analysis and growth projections.

If you're in the Cigarettes industry in Bosnia and Herzegovina, our research will save you time and money while empowering you to make informed, profitable decisions.

The Cigarettes in Bosnia and Herzegovina 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, and exports of finished cigarettes
  • Robust and transparent market research methodology, conducted in-country

Our market research reports answer questions such as:

  • What is the market size of Cigarettes in Bosnia and Herzegovina?
  • What are the major brands in Bosnia and Herzegovina?
  • What is the legislative environment like in Bosnia and Herzegovina?
  • What are the rates of cigarette taxation in Bosnia and Herzegovina?
  • Do premium, mid-price or economy cigarettes dominate in Bosnia and Herzegovina?
  • What is the rate of illicit trade in Bosnia and Herzegovina?
  • How many smokers are there in the country?

Why buy this report?

  • Gain competitive intelligence about market leaders
  • Track key industry trends, opportunities and threats
  • Inform your marketing, brand, strategy and market development, sales and supply functions

This industry report originates from Passport, our Tobacco market research database.