Retail volume sales of cigarettes in North Macedonia continued to decline in 2021, maintaining the negative trend observed throughout the review period. The downward trajectory reflects the fact that smoking prevalence among the population has been falling for several years.
Retail unit prices for cigarettes in North Macedonia rose in 2021 due to an increase in excise duty. In the majority of cases, prices went up by MKD5-10 per pack.
After having declined steadily in the previous three years, illicit trade in cigarettes in North Macedonia increased in volume terms in 2021. This was partly due to retail unit price hikes resulting from a rise in excise duty, the impact of which was amplified by heightened budget-consciousness among consumers amidst ongoing economic uncertainty.
With the long-term trend in smoking prevalence in North Macedonia being one of decline, the cigarettes category is poised to register consistently negative results in retail volume sales terms over the forecast period. Rising awareness of the health risks associated with tobacco consumption will continue to encourage smokers to cut down, quit or switch to e-vapour and heated tobacco products, and ensure fewer young Macedonians take up the habit to begin with.
In accordance with the Law on Excise Taxes of 2013, excise duty on cigarettes in North Macedonia is set to rise steadily until 2023. Further hikes are likely thereafter as the country continues to bring its tobacco taxation policies closer into line with those of the EU as part of its application to become a member state.
Illicit trade in cigarettes in North Macedonia looks set to increase over the first half of the forecast period as unit prices rise in line with further excise tax hikes and high inflation drives up the general cost of living. Indeed, with many consumers having recently seen their disposable incomes decline due to the economic fallout of the pandemic, these factors are expected to cause growth in volume sales of illicit cigarettes to accelerate over 2022-2023.
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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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