Sales of cigarettes continued to decline in retail volume terms in 2021 continuing the pattern seen throughout the review period. Most consumers were already well aware of the negative impact that smoking cigarettes has on their health, but the COVID-19 pandemic created new concerns.
The COVID-19 pandemic also put pressure on consumer incomes and created widespread job and wage insecurity which pushed more consumers to shift to economy priced cigarettes in Lithuania. Additionally, the state keeps raising excise tax on cigarettes which is also encouraging consumers to reduce their consumption or to switch to more affordable brands.
Although illicit trade had been shrinking earlier in the review period, these sales increased sharply in the last few years of the review period. Lithuania’s close proximity to Belarus, which is the key source market for cheaper illicit cigarettes, is a key factor in the strong presence of illicit trade cigarettes in the market.
It is highly likely that retail volume sales of cigarettes will continue to decline over the forecast period. There is growing pressure for smokers to quit, with the COVID-19 only serving to highlight the immediate dangers of smoking.
The three major players are not expected to be very active in terms of new product launches, instead mainly concentrating on various brand extensions, such as larger sized packs and variations in stick sizes. With flavoured cigarettes banned in 2020 and an absolute ban on advertising cigarettes in Lithuania, there is not much room for cigarettes marketing.
In June 2021 the government confirmed its plan for raising excise taxes on cigarettes over the next three years. As per this agreement, excise tax will increase by 6-7% per year over the period 2022-2024.
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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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