In 2021, the fixed excise on cigarettes increased from HRK370 to HRK400 per 1,000 sticks, with ad valorem tax remaining at 34% resulting in an increase of cigarette packs’ unit price, while the minimum tax per 1,000 sticks rose from HRK824 to HRK888. Croatia’s government has agreed to increase specific taxes and abide by initiatives in line with EU tax levels and regulations.
The reopening of borders and the recovery of tourism resulted in positive retail value and volume sales growth in 2021. Tourists contribute in a large part to sales of cigarettes in Croatia and compared to 2020, the number of inbound tourists was much higher, benefiting cigarette sales.
BAT Hrvatska doo remained the dominant player in cigarettes in 2021, followed by Philip Morris Zagreb doo and JT International Zagreb doo. However, BAT Hrvatska, considered shutting down its operations in Croatia under the weight of the rising excise tax.
Cigarettes’ constant retail value and volume sales are expected to remain negative over the forecast period. Ever since the adoption of EU Tobacco Directive, excise tax has been regularly increased and there is no indication that this will not reoccur in the near future.
Consumer purchasing power in Croatia is lower compared to that in other EU countries. The rise in unit prices during 2021 was not followed by a rise in salaries for the large majority of the population.
Over the forecast period, the biggest threat to cigarettes sales will be new tobacco products, especially e-vapour and heated tobacco products. Such products are marketed as a healthier alternative to cigarettes and are sold at a lower price.
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RETAIL SALES OF DUTY PAID CIGARETTES The definition of cigarettes for the purposes of this study is duty-paid, machine manufactured white-stick products. This does not exclude brands of cigarettes that do not use white paper but it is designed to exclude the volume of non-machine manufactured products such as bidis/beedis (India) and papirosy (Russia), and other smoking products made with tobacco but that either do not resemble cigarettes as recognised in the US or Europe, or those that are not machine manufactured. The exclusion of these products is intended to give a more accurate picture of the "true" market for cigarettes and cigars which has been distorted in official statistics and published reports because of the inclusion of hybrid products. NB Please note that due to its central importance and integration into the industry mainstream, Indonesia’s market data does include hand-rolled kreteks DUTY-FREE sales are excluded from retail sales, as are herbal cigarettes. ILLICIT TRADE CIGARETTES Not included in retail sales, but split out separately in volume terms only. Defined as non-duty paid cigarettes (includes smuggled & counterfeit/fake products combined). Legitimate cross-border sales are considered duty-paid. Sales arising from a foreign national purchasing cheaper cigarettes in bulk in a neighbouring country for personal use and exported back are attributed to the country where the purchase is made (e.g. bulk cigarette sales by British nationals in France are attributed to France).See All of Our Definitions
This report originates from Passport, our Cigarettes research and analysis database.
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