After cigarettes saw a particularly strong retail volume decline in 2019, the fall in sales slowed down in 2020. Local tourism increased due to the closure of borders as a result of COVID-19, whilst some return of the workforce was seen from the EU because of the pandemic.
The economy price band in cigarettes remained the largest in 2020, as a large proportion of the population remained price-conscious. However, the economy segment lost share to the premium segment in 2020, as not all consumers were equally affected by the economic impact of the pandemic.
Distribution channel shifts were seen as a result of the implementation of restrictions to stop the spread of COVID-19. Modern trade channels such as supermarkets, hypermarkets and convenience stores, as well as to a lesser extent e-commerce, saw rising shares of sales.
Despite the expectation of current value growth for cigarettes throughout the forecast period, retail volume sales are set to continue to decline. Although some of this will be due to concern about health, this is not expected to be the most significant factor.
Further migration is expected to illicit trade throughout the forecast period, which will also be pushed mostly by consumers’ price sensitivity due to the economic impact of COVID-19. Although the economy price band is projected to continue to lead in terms of share of retail volume sales, more consumers are likely to switch from the economy price band to cheaper illegal cigarettes.
There are various legal issues which are being discussed by the government which could negatively impact volume sales of cigarettes during the forecast period if they are made law. These include a ban on the visible placement of cigarettes in stores; restrictions on taste and aroma; an increase in the size of medical warnings on packages (to 65%); new pack format (huge investment needed from manufacturers to change production); and an increase in the legal age from 18 to 21 for both selling and buying.
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Understand the latest market trends and future growth opportunities for the Cigarettes industry in Ukraine with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
Key trends are clearly and succinctly summarised alongside the most current research data available. Understand and assess competitive threats and plan corporate strategy with our qualitative analysis, insight and confident growth projections.
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This report originates from Passport, our Cigarettes research and analysis database.
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