In July 2023, a ban on most flavoured tobacco products came into force, with a one-year transition period to July 2024. Most flavoured tobacco products, including all e-vapour products, capsule cigarettes, and flavoured cigarillos and cigars are forbidden according to the new law, though heated tobacco sticks and nicotine pouches, as well as hookah tobacco, are exempt from the ban.
The illicit trade is expected to maintain a significant share of cigarettes sales in Ukraine in the forecast period. This will occur mostly due to consumer movement from the legal economy segment, and will be driven by excise tax increases on a yearly basis, high inflation and lower purchasing power.
The further implementation of legislative restrictions and reforms is expected in the forecast period, with draft laws including correlating the excise tax rate with the euro exchange rate in the 2024-2028 period, the implementation of a track and trace system, rationing of tobacco production waste, and the prohibition of old excise stamps. Such moves will negatively impact the retail price of cigarettes because of the higher cost of production and taxes, which are mostly forwarded on to consumers in the form of a higher shelf price.
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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.
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Cigarettes
RETAIL SALES OF DUTY PAID CIGARETTES The definition of cigarettes for the purposes of this study is duty-paid, machine manufactured white-stick products. This does not exclude brands of cigarettes that do not use white paper but it is designed to exclude the volume of non-machine manufactured products such as bidis/beedis (India) and papirosy (Russia), and other smoking products made with tobacco but that either do not resemble cigarettes as recognised in the US or Europe, or those that are not machine manufactured. The exclusion of these products is intended to give a more accurate picture of the "true" market for cigarettes and cigars which has been distorted in official statistics and published reports because of the inclusion of hybrid products. NB Please note that due to its central importance and integration into the industry mainstream, Indonesia’s market data does include hand-rolled kreteks DUTY-FREE sales are excluded from retail sales, as are herbal cigarettes. ILLICIT TRADE CIGARETTES Not included in retail sales, but split out separately in volume terms only. Defined as non-duty paid cigarettes (includes smuggled & counterfeit/fake products combined). Legitimate cross-border sales are considered duty-paid. Sales arising from a foreign national purchasing cheaper cigarettes in bulk in a neighbouring country for personal use and exported back are attributed to the country where the purchase is made (e.g. bulk cigarette sales by British nationals in France are attributed to France).
See All of Our DefinitionsThis report originates from Passport, our Cigarettes research and analysis database.
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