Cigarettes in Serbia

PROSPECTS

Illicit trade volume starts to decline in 2017

Serbia traditionally suffers from fairly high illicit volume sales of cigarettes, which has been a huge problem for large tobacco producers for years and has led to them investing many resources into lobbying to reduce the illicit trade. This was one of the reasons why officials in Serbia, police and border controls primarily, started to pay greater attention to the problem towards the end of the review period, which in turn led from positive to negative growth of illicit trade volume sales in 2017.

Cigarette production and exports continue to grow in 2017, but at much slower rate

Due to massive increases in cigarette exports from Serbia over most of the review period, production levels also increased notably in 2015 and in 2016. This was the case as large international producers made Serbia one of the most important regional production hubs due to relatively low taxes.

Traditional grocery retailers retain high share, but losing ground

Traditional grocery retailers continued to dominate retail volume sales of cigarettes in Serbia in 2017. This share however, has witnessed losses over the review period as modern channels have gained in popularity.

COMPETITIVE LANDSCAPE

Low-priced new product launch leads to visible increase for Philip Morris

Philip Morris launched the relatively accessible L&M Loft brand at the beginning of 2017, which met with immediate approval from local consumers. As a result, L&M was by far the fastest growing brand in 2017 amongst the leading 10 brands in Serbian cigarettes and it allowed Philip Morris to strengthen its leading position in the category by increasing its overall retail volume share.

New product launches focus on value-for-money

In addition to the L&M Loft new launch by Philip Morris, British American Tobacco launched another brand that is aimed to attract consumers who seek to save money on cigarettes. Namely, the producer introduced Rothmans Rich Blue 23 in 2017 that contains 23 cigarettes for the price of the usual 20 pack in the same range.

Many brands are discontinued in 2017

There were several brands that disappeared from the category in 2016 and in 2017. Among them were former leader Best, as well as Classic and York.

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