Cigarettes in Estonia

PROSPECTS

Both consumption and social acceptance of smoking on the decline

The general consumption of cigarettes in Estonia is gradually falling as the smoking population declines and fewer young people are starting to smoke regularly. Bans on smoking in public places have had a measurable impact on smoking prevalence, with all government institutions agreeing that this measure has been the most effective in curbing smoking.

Growth of super-economy brands driven by price hikes

Regular Estonian smokers tend to be loyal to their preferred brands. Moreover, graphic health warnings on cigarette packs and advertising restrictions have made it very difficult for manufacturers to attract consumers of rival brands.

Threat from Latvian border trade on the rise

As volume sales of cigarettes are expected to continue to fall, the Estonian Tobacco Producers Association fears that the official decline in consumption will not reflect the real situation. The illicit market is constantly shrinking due to the efforts of the border control authorities but local research has shown an ongoing increase in tobacco packs with Latvian duty stamps.

COMPETITIVE LANDSCAPE

Global tobacco manufacturers forced to fight for a share of display space

With no local producers of cigarettes in Estonia, the industry remained in the hands of four global manufacturers in 2017, namely Philip Morris, Japan Tobacco International, British American Tobacco and Imperial Tobacco. The four leading brands were Chesterfield, Philip Morris, LD and Marlboro.

Retailers forced into passive selling due to restrictions

Pre-purchasing and pre-stocking has been adopted by retailers since the 2016 excise hike policy, and every year in December retailers buy cigarettes in bulk to last a month. This allows them to adopt a smoother pricing transition and lets consumers better adapt to the price shock.

Cigarette manufacturers consider alternative products

As cigarette sales are falling, manufacturers are showing an increasing interest in heated tobacco products. While only Philip Morris has introduced such products in the Baltic States, they are still not available in Estonia due to regulatory restrictions.

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