The high excise tax applied to cigars and cigarillos has had a further negative impact on the category, but mostly on sales of cigarillos. In 2018, specific excise for cigars and cigarillos rose by more than a quarter from the previous year.
Fine cut tobacco posted the strongest volume growth in the overall category in 2018. Specific excise is applied per kilo to smoking tobacco, which makes the final retail cost per portion sold more affordable than cigarettes and cigarillos.
Tobacco in general faces many challenges over the forecast period. In addition to Latvia’s depopulation and the stricter display ban likely to be introduced, the pursuit of healthier lifestyles will make smoking less common, while continual and high taxation will continue making smoking unaffordable for many.
Despite steep falls in volume sales of cigarillos, the Al Capone brand has become more popular in the category, achieving high growth in both sales and share in 2018. Its portfolio for Latvia was further expanded in the year, with the addition of compact Pockets Flame, Pockets Original and Pockets Filter Red Blend, as well as larger Al Capone cigarillos.
Within cigars, Romeo y Julieta from Corporación Habanos SA remained the leading brand over the review period, followed by the Cohiba and Partagás brands, also owned by Habanos. However, cigars as a whole experienced a significant volume sales decline in 2017-2018 following a considerable excise tax hike, with Habanos taking most of the hit as the dominant player.
The recently implemented increases in excise tax and proposals regarding tobacco product displays make pipe tobacco an unattractive category for new entrants. Although it recorded volume sales growth in 2018, this was mostly due to other categories such as cigarettes and cigarillos experiencing higher taxation and resulting hikes in prices, making pipe tobacco a more affordable alternative.
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Discover the latest market trends and uncover sources of future market growth for the Cigars, Cigarillos and Smoking Tobacco industry in Latvia with research from Euromonitor's team of in-country analysts.
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