Cigarettes in Slovakia

PROSPECTS

Steady demand for cigarettes despite further price increases

Cigarettes continued to enjoy steady retail volume growth in Slovakia in 2018. This was driven by the positive economic situation and higher disposable incomes, which allowed consumers to continue purchasing these products, particularly trading up to mid price and premium cigarettes, despite ongoing price increases due to tax hikes.

High demand for illicit trade to be impacted by new EU regulation

While retail volume sales of cigarettes continued to record steady growth in 2018, growth recorded by illicit trade was much higher. While more affluent consumers enjoying higher disposable incomes had shown a notable switch towards mid price and premium cigarettes, price increases continued to force lower-income consumers to turn to illicit trade.

Further price increases over forecast period to negatively impact demand

Although price increases of cigarettes did not have an adverse impact on consumption in 2018, further price increases from February 2019 could have the desired effect by officials. The government plans to increase excise tax by EUR0.

COMPETITIVE LANDSCAPE

Philip Morris retains lead despite loss of share

Philip Morris continued to dominate retail volume sales of cigarettes in 2018, followed by Imperial Tobacco Slovakia as. However, both companies lost some share due to strong competition from third-ranked JTI Slovak Republic sro (with popular Camel brand) and fourth-ranked Danczek Bratislava sro.

Imperial Tobacco continues to launch new products to keep consumers’ attention

Despite losing some share in 2018, Imperial Tobacco retained its second position with a wide gap between itself and third-ranked JTI Slovak Republic. The player benefits from an ongoing focus on innovation, the offer of a wide range of products and a strong distribution network.

Cigarettes not attractive environment for domestic players

International players continued to dominate the competitive landscape of cigarettes in 2018, with a lack of domestic companies. Multinationals such as Philip Morris and Imperial Tobacco are well established, and are able to strongly invest in research and product development.

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