2020 and 2021 have stalled a downward decline in volume sales of cigarettes, with volume sales increasing in both years. In 2019, significant tax increases on cigarettes led a severe drop in volume sales; however, in the past two years volume sales have rebounded.
Phillip Morris reinforced its leadership position in cigarettes during 2021, with almost twice the retail volume share of Japan Tobacco Inc – its closest rival. Philip Morris overtook Japan Tobacco in 2017 after it launched the Phillip Morris and Bond Street brands.
Georgia has high smoking prevalence, particularly among men, but in recent years the authorities have been very active in terms of tightening controls on tobacco. In 2019, there was a significant increase in taxes and the use of graphic health warnings featuring images of tobacco-related disease was also made mandatory.
Georgian authorities are determined to drive down smoking rates and have implemented a wide range of regulations since 20217. There regulations are bearing fruit, with smoking prevalence falling and there is expected to be a significant decline in volume sales of cigarettes over the forecast period, as these regulations continue to drive down smoking prevalence.
There are potential headwinds on the horizon. Inflation was very high in 2021 and if this continues over the forecast period, as pressures such as rising global energy prices and continuing global supply constraints feeds into further price rises, this will dampen volume demand.
Over the forecast period, local consumers are likely to become more aware of their health. As a result, smoking prevalence is set to decline steadily during the forecast period, undermining demand for cigarettes.
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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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