In 2018, cigarettes posted a further modest decline in retail volume sales, continuing the trend seen over the previous three years. This can be attributed to a number of factors, including a drop in smoking prevalence, particularly among men, with female smoking prevalence remaining largely unchanged.
Firstly, excise tax is expected to continue to rise at an annual rate of 2% in order to harmonise prices with those in other EU countries, which should also serve to reduce smuggling from Romania.
Despite numerous measures taken by the authorities, illicit trade continued to account for a double-digit share of cigarette retail volume sales in Romania in 2018. While in 2016 and 2017 illicit trade recorded a solid decline, in 2018 it rose slightly, partly as a result of increasing prices due to ongoing hikes in excise tax.
Although cigarette regulations are becoming increasingly restrictive in Romania as the government aligns its legislation with EU directives, an interesting trend is being seen in terms of distribution. Modern grocery retailers, such as discounters, hypermarkets and supermarkets, are expanding across the country, with this helping them to record strong volume sales growth in cigarettes in 2018.
Three multinationals together continued to dominate cigarettes in Romania in 2018. British American Tobacco remained the clear leader with nearly a half of overall volume sales, followed by Philip Morris and then JT International.
Second-ranked Philip Morris continued to slowly lose share in 2018. The company’s position can be attributed to the strength of brands such as Marlboro and L&M, while it also offers less popular brands in Romania such as Parliament, Assos, Chesterfield and Virginia Slims.
JT International, the local subsidiary of Japan Tobacco, continued to focus its efforts on the economy and mid- priced segments in 2018, with this reflected in the popularity of its Winchester and Winston brands. This approach helped to consolidate its position in Romanian cigarettes, especially after the 1990s, when the only cigarettes available were the unfiltered brand Carpati.
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This industry report originates from Passport, our Tobacco market research database.