Executive Summary

Jul 2019
Cigarettes suffer drop in smoking prevalence but heated tobacco benefits from strong marketing

In 2018, the tobacco industry in Ukraine saw another year of mixed performances. Cigarette retail volume sales continued to fall sharply as a result of both an ongoing decline in smoking prevalence but particularly a significant increase in taxation.

Significant hike in cigarettes tax drives many smokers towards illicit trade

Although the number of smokers in Ukraine continued to fall in 2018, smoking prevalence remained high, particularly among men. However, smoking continued to become increasingly unaffordable due to a sharp increase in tax, while consumers’ purchasing power remained low.

Philip Morris facing increasing competition for top spot from British American Tobacco

In 2018, the cigarette competitive landscape remained almost completely in the hands of the four multinationals Philip Morris, British American Tobacco, Japan Tobacco and Imperial Brands under their local subsidiaries, with the only other manufacturer with a measurable presence being local player Vinnykivska Tyutynova Fabryka. Philip Morris retained its leading position and further increased its retail volume share but also saw the gap between itself and second-ranked British American Tobacco narrow considerably due to gains made by the latter thanks to its well-performing Pryluky and Rothmans brands.

Ukrainians continue to buy most tobacco products in store-based grocery retailers

There were no major changes in the distribution of cigarettes, cigars and cigarillos and smoking tobacco in 2018. Independent small grocers and newsagent-tobacconists/kiosks continued to account for nearly three quarters of overall cigarette retail volume sales, while the majority of cigars, cigarillos and smoking tobacco were purchased in tobacco specialists due to these outlets offering the widest range of products, with newsagent-tobacconists/kiosks also accounting for a notable share.

Heated tobacco and e-vapour products continue to woo smokers away from cigarettes

Retail volume sales of cigarettes are predicted to continue to fall sharply over the forecast period, with the category’s ongoing contraction driven by falling smoking prevalence as a result of increasing health awareness and rising taxation. Higher taxes will make cigarettes increasingly unaffordable for many consumers, with some thus resorting to illicit sources.

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Tobacco in Ukraine

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Overview

Discover the latest market trends and uncover sources of future market growth for the Tobacco industry in Ukraine with research from Euromonitor's team of in-country analysts.

Find hidden opportunities in the most current research data available, understand competitive threats with our detailed market analysis, and plan your corporate strategy with our expert qualitative analysis and growth projections.

If you're in the Tobacco industry in Ukraine, our research will save you time and money while empowering you to make informed, profitable decisions.

When you purchase this report, you also get the data and the content from these category reports in Ukraine for free:

The Tobacco in Ukraine market research report includes:

  • Analysis of key supply-side and demand trends
  • Detailed segmentation of international and local products
  • Historic volumes and values, company and brand market shares
  • Five year forecasts of market trends and market growth
  • Production, imports by origin, exports by destination
  • Robust and transparent market research methodology, conducted in-country

Our market research reports answer questions such as:

  • What is the market size of Tobacco in Ukraine?
  • What are the major brands in Ukraine?
  • Which sector of the tobacco products market is the largest by value sales in Ukraine?
  • Which sector of the tobacco products market has been growing the fastest, by volume and value, in Ukraine?
  • Which sector is the most heavily taxed in Ukraine?
  • Which companies dominate in the total tobacco market in Ukraine in terms of market share?
  • What is the distribution channel split for the tobacco products market in Ukraine?

Why buy this report?

  • Gain competitive intelligence about market leaders
  • Track key industry trends, opportunities and threats
  • Inform your marketing, brand, strategy and market development, sales and supply functions

This industry report originates from Passport, our Tobacco market research database.

Tobacco in Ukraine

EXECUTIVE SUMMARY

Cigarettes suffer drop in smoking prevalence but heated tobacco benefits from strong marketing
Significant hike in cigarettes tax drives many smokers towards illicit trade
Philip Morris facing increasing competition for top spot from British American Tobacco
Ukrainians continue to buy most tobacco products in store-based grocery retailers
Heated tobacco and e-vapour products continue to woo smokers away from cigarettes

OPERATING ENVIRONMENT

Legislation
Legislative overview
Summary 1 Legislation Summary at a Glance
Minimum legal smoking age
Smoking prevalence
Tar levels
Health warnings
Plain packaging
Advertising and sponsorship
Point-of-sale display bans
Smoking in public places
Low ignition propensity (LIP) cigarette regulation
Flavoured tobacco product ban
Reduced harm
E-vapour products

PRODUCTION/IMPORTS/EXPORTS

MARKET INDICATORS

Table 1 Number of Adult Smokers by Gender 2013-2018

MARKET DATA

Table 2 Sales of Tobacco by Category: Volume 2013-2018
Table 3 Sales of Tobacco by Category: Value 2013-2018
Table 4 Sales of Tobacco by Category: % Volume Growth 2013-2018
Table 5 Sales of Tobacco by Category: % Value Growth 2013-2018
Table 6 Forecast Sales of Tobacco by Category: Volume 2018-2023
Table 7 Forecast Sales of Tobacco by Category: Value 2018-2023
Table 8 Forecast Sales of Tobacco by Category: % Volume Growth 2018-2023
Table 9 Forecast Sales of Tobacco by Category: % Value Growth 2018-2023

SOURCES

Summary 2 Research Sources

Cigars, Cigarillos and Smoking Tobacco in Ukraine

HEADLINES

PROSPECTS

Marginal volume sales growth for cigars and cigarillos as consumers remain price-sensitive
Cigars remain preserve of a niche group of affluent consumers
Fine cut tobacco culture remains undeveloped in Ukraine

COMPETITIVE LANDSCAPE

Competitive environment remains stable and in hands of international manufacturers
Smaller pack sizes used to tempt price-sensitive consumers
Distribution dominated by tobacco specialists but supermarkets slowly gaining share

CATEGORY DATA

Table 10 Sales of Cigars, Cigarillos and Smoking Tobacco by Category: Volume 2013-2018
Table 11 Sales of Cigars, Cigarillos and Smoking Tobacco by Category: Value 2013-2018
Table 12 Sales of Cigars, Cigarillos and Smoking Tobacco by Category: % Volume Growth 2013-2018
Table 13 Sales of Cigars, Cigarillos and Smoking Tobacco by Category: % Value Growth 2013-2018
Table 14 Sales of Cigars by Size: % Volume 2013-2018
Table 15 Sales of Cigarillos by Price Platform 2013-2018
Table 16 NBO Company Shares of Cigars and Cigarillos: % Volume 2014-2018
Table 17 LBN Brand Shares of Cigars and Cigarillos: % Volume 2015-2018
Table 18 NBO Company Shares of Cigars: % Volume 2014-2018
Table 19 LBN Brand Shares of Cigars: % Volume 2015-2018
Table 20 NBO Company Shares of Cigarillos: % Volume 2014-2018
Table 21 LBN Brand Shares of Cigarillos: % Volume 2015-2018
Table 22 NBO Company Shares of Smoking Tobacco: % Volume 2014-2018
Table 23 LBN Brand Shares of Smoking Tobacco: % Volume 2015-2018
Table 24 NBO Company Shares of Pipe Tobacco: % Volume 2014-2018
Table 25 LBN Brand Shares of Pipe Tobacco: % Volume 2015-2018
Table 26 NBO Company Shares of Fine Cut Tobacco: % Volume 2014-2018
Table 27 LBN Brand Shares of Fine Cut Tobacco: % Volume 2015-2018
Table 28 Distribution of Cigars and Cigarillos by Format: % Volume 2013-2018
Table 29 Distribution of Smoking Tobacco by Format: % Volume 2013-2018
Table 30 Forecast Sales of Cigars, Cigarillos and Smoking Tobacco by Category: Volume 2018-2023
Table 31 Forecast Sales of Cigars, Cigarillos and Smoking Tobacco by Category: Value 2018-2023
Table 32 Forecast Sales of Cigars, Cigarillos and Smoking Tobacco by Category: % Volume Growth 2018-2023
Table 33 Forecast Sales of Cigars, Cigarillos and Smoking Tobacco by Category: % Value Growth 2018-2023

Smokeless Tobacco, E-Vapour Products and Heated Tobacco in Ukraine

HEADLINES

PROSPECTS

Heated tobacco dynamic due to increasing consumer awareness and widening distribution
Developing vaping culture supports the further growth of e-vapour products
Smokeless tobacco witnesses entry of snuff

COMPETITIVE LANDSCAPE

Chinese manufacturers remain prominent in e-vapour products
Increasing competition anticipated in heated tobacco as new players enter
Philip Morris continues to focus on new product development in heated tobacco

CATEGORY INDICATORS

Table 34 Number of Adult Vapers 2013-2018

CATEGORY DATA

Table 35 Sales of Smokeless Tobacco, E-Vapour Products and Heated Tobacco by Category: Value 2013-2018
Table 36 Sales of Smokeless Tobacco, E-Vapour Products and Heated Tobacco by Category: % Value Growth 2013-2018
Table 37 Sales of Tobacco Heating Devices: Volume 2013-2018
Table 38 Sales of Tobacco Heating Devices: Value 2013-2018
Table 39 Sales of Heated Tobacco: Volume 2013-2018
Table 40 Sales of Heated Tobacco: Value 2013-2018
Table 41 Sales of E-Liquids by Nicotene Strength: % Value 2018
Table 42 NBO Company Shares of E-Vapour Products: % Value 2014-2018
Table 43 LBN Brand Shares of E-Vapour Products: % Value 2015-2018
Table 44 NBO Company Shares of Tobacco Heating Devices: % Volume 2014-2018
Table 45 LBN Brand Shares of Tobacco Heating Devices: % Volume 2015-2018
Table 46 NBO Company Shares of Heated Tobacco: % Volume 2014-2018
Table 47 LBN Brand Shares of Heated Tobacco: % Volume 2015-2018
Table 48 Distribution of E-Vapour Products by Format: % Value 2013-2018
Table 49 Distribution of Tobacco Heating Devices by Format: % Volume 2013-2018
Table 50 Distribution of Heated Tobacco by Format: % Volume 2013-2018
Table 51 Forecast Sales of Smokeless Tobacco, E-Vapour Products and Heated Tobacco by Category: Value 2018-2023
Table 52 Forecast Sales of Smokeless Tobacco, E-Vapour Products and Heated Tobacco by Category: % Value Growth 2018-2023
Table 53 Forecast Sales of Tobacco Heating Devices: Volume 2018-2023
Table 54 Forecast Sales of Tobacco Heating Devices: Value 2018-2023
Table 55 Forecast Sales of Heated Tobacco: Volume 2018-2023
Table 56 Forecast Sales of Heated Tobacco: Value 2018-2023

Cigarettes in Ukraine

HEADLINES

PROSPECTS

Cigarette volume sales continue to be hit be rising taxation
Higher prices push smokers towards illicit sources
Flavour capsules and menthol variants gain ground at the expense of standard cigarettes

COMPETITIVE LANDSCAPE

British American Tobacco closes the gap on Philip Morris thanks to Pryluky and Rothmans
Vinnykivska Tyutynova Fabryka gains share thanks to focus on low-priced brands
Manufacturers offer larger pack sizes to give consumers better value for money

TAXATION AND PRICING

Taxation rates
Summary 3 Taxation and Duty Levies 2013-2018
Average cigarette pack price breakdown
Summary 4 Average Cigarette Pack Price Breakdown: Brand Examples

CATEGORY DATA

Table 57 Sales of Cigarettes: Volume 2013-2018
Table 58 Sales of Cigarettes by Category: Value 2013-2018
Table 59 Sales of Cigarettes: % Volume Growth 2013-2018
Table 60 Sales of Cigarettes by Category: % Value Growth 2013-2018
Table 61 Sales of Cigarettes by Blend: % Volume 2013-2018
Table 62 Sales of Cigarettes by Standard/Menthol/Capsule: % Volume 2013-2018
Table 63 Sales of Cigarettes by Regular/Slim/Superslim/Microslim: % Volume 2013-2018
Table 64 Sales of Cigarettes by Pack Size: % Volume 2013-2018
Table 65 Sales of Cigarettes by Price Band: % Volume 2013-2018
Table 66 NBO Company Shares of Cigarettes: % Volume 2014-2018
Table 67 LBN Brand Shares of Cigarettes: % Volume 2015-2018
Table 68 Sales of Cigarettes by Distribution Format: % Volume 2013-2018
Table 69 Illicit Trade Estimate of Cigarettes: Volume 2013-2018
Table 70 Forecast Sales of Cigarettes: Volume 2018-2023
Table 71 Forecast Sales of Cigarettes by Category: Value 2018-2023
Table 72 Forecast Sales of Cigarettes: % Volume Growth 2018-2023
Table 73 Forecast Sales of Cigarettes by Category: % Value Growth 2018-2023
Table 74 Forecast Sales of Cigarettes by Blend: % Volume 2018-2023
Table 75 Forecast Sales of Cigarettes by Standard/Menthol/Capsule: % Volume 2018-2023
Table 76 Forecast Sales of Cigarettes by Regular/Slim/Superslim/Microslim: % Volume 2018-2023
Table 77 Forecast Sales of Cigarettes by Pack Size: % Volume 2018-2023
Table 78 Forecast Sales of Cigarettes by Price Band: % Volume 2018-2023