Cigarettes in the Czech Republic

PROSPECTS

Volume sales rise in 2018, but decline is predicted as prices and competition increase

Despite expectations that the 2017 smoking ban in pubs and restaurants would suppress cigarette consumption, cigarette volume sales grew in 2018. While smoking prevalence is declining in the country, inbound tourism boosted cigarette volume sales.

Premium and mid-priced cigarettes both gain share

Boosted by growing consumer incomes and promotional activities from some premium cigarette brands, such as Davidoff, Marlboro and Camel, premium price brands increased their volume share of the overall category in 2018. Although economy brands account for the majority of sales, followed by mid-priced offerings, the premium share rose slightly in 2018 and by a percentage point over the entire review period.

New anti-smoking legislation and illicit trade create challenges for the category

The anti-smoking legislation came into effect in May 2017, banning smoking in restaurants, pubs and other foodservice establishments. The discomfort of having to smoke outside a restaurant was alleviated by the fact that the application of the law started early in the summer and the ban on smoking did not apply to outdoor restaurants’ terraces.

COMPETITIVE LANDSCAPE

Philip Morris CR leads comfortably

Philip Morris CR maintained its leading sales position in 2018 despite a slight drop in its volume share. The company's international brands continued to perform strongly, with Chesterfield, L&M, Philip Morris and Marlboro being among the most popular ones.

International players dominate with their innovative launches that keep consumers interested

The top four players, Philip Morris, British American Tobacco, Imperial Tobacco CR sro and JT International spol sro continued to collectively dominate cigarettes sales in 2018. This was due to their well-represented product portfolios being able to satisfy the majority of cigarette smokers in the Czech Republic, as well as continued product innovation.

Competition rises from fine cut tobacco and modern alternatives

As a result of continually rising cigarette prices, price-sensitive consumers are increasingly switching to fine cut tobacco which, due to less tax imposed, provides a cheaper alternative. The largest tobacco companies in the Czech Republic are expanding their fine cut tobacco offering and selling the most popular cigarette brands also as fine cut tobacco.

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