In 2020, the main consequence of the Coronavirus (COVID-19) pandemic was an increase in retail volume sales, as some consumers smoked more due to heightened levels of stress, longer inactive periods and a big reduction in illegal trade activity, due to effective border controls and restricted travelling. In 2021, the impact of the third, fourth and fifth waves of pandemic was seen mainly in the opening hours of retail stores, and access restrictions for unvaccinated consumers in non-grocery stores and consumer foodservice outlets.
Illicit trade volume continued to diminish in 2021, albeit at a slower rate than the sharp drop witnessed in 2020, when borders were closed and travel restrictions were high. The drop in illicit trade volume was also the result of the authorities’ efforts, in partnership with cigarettes manufacturers.
Retail current value growth in 2021 was primarily the result of the increase in excise tax in two stages: on 1 January, and 1 April 2021. The first increase of the excise was made in order to avoid infringement against Romania, as the global excise on cigarettes did not represent at least 60% of the weighted average retail price of cigarettes released for consumption, according to the Directive 2011/64/EU.
The early forecast period is expected to see a continuation of the effects of the COVID-19 pandemic, with a sixth wave predicted. While COVD-19 restrictions were removed from 10 March 2022, the threat of new waves of infections remains and may foster renewed restrictions.
Illicit trade volume is expected to continue to fall in 2022, partly due to the Russian invasion of Ukraine, which is on Romania’s northern border. This border area was, for a long period, the main source of illegal cigarettes penetration in the market.
Economy brands are set to be the beneficiaries of under pressure consumer purchasing power due to the prevailing economic difficulties in the country. The economy segment is projected to see a strong gain in retail volume share, at the expense of mid-priced and premium segments, over the forecast period.
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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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