In 2024, Azerbaijan’s tobacco market remained relatively stable, despite ongoing shifts in consumer preferences, rising excise taxes, and regulatory developments. While smoking prevalence stayed largely unchanged and continued to be the main driver of cigarette sales, the legal cigarette market declined, mainly due to a significant increase in illicit trade. At the same time, alternative nicotine products, including e-vapour and heated tobacco, gained momentum, supported by new entrants and expanding distribution. The market overall is becoming more segmented and price-sensitive, shaped by both economic and social factors.
Tobacco sales saw a marginal decline in 2024, primarily driven by the drop in legal cigarette volumes amid a rise in illicit trade. While other categories, such as heated tobacco and e-vapour products, continued to develop, their growth was not sufficient to compensate for the decline in the dominant cigarette category.
JTI Caucasus LLC was the leading and most dynamic company in tobacco in Azerbaijan in 2024 thank to its strong performance in the largest category, cigarettes. The company holds a high market share in cigarettes, driven by the success of its well-established premium and mid-priced brands, such as Winston and Sobranie and others, which enjoy strong consumer loyalty and wide distribution. JTI’s leadership is further supported by its consistent investment in retail visibility, pricing strategy, and brand strength. Notably, despite having no presence in modern categories such as heated tobacco, this has not hindered its market leadership.
Small local grocers remained the key distribution channel for tobacco in Azerbaijan in 2024 as it is the leading channel in the main category, cigarettes. This is primarily due to their wide accessibility all across the country, including regions. While the share of supermarkets, convenience stores and modern retailers in general is growing, small local grocers continued to play a dominant role in the distribution of tobacco products.
Tobacco in Azerbaijan is expected to post positive dynamics over the forecast period, supported by several key factors. The primary driver will be the anticipated recovery of sales of legal cigarettes, as efforts to curb illicit trade take effect. Cigarettes will remain the dominant category in volume terms, sustained by a rather stable smoking prevalence and strong brand presence. In addition, heated tobacco is expected to grow significantly, particularly following Philip Morris International’s official market entry. Meanwhile, e-vapour products, which are not currently banned, will continue their upward trajectory - especially disposable products - driven by consumer demand and product innovation.
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Tobacco
Passport Tobacco covers the seven major tobacco categories: Cigarettes, Cigars & Cigarillos, Smoking tobacco (made up of Pipe tobacco and RYO tobacco), Smokeless Tobacco (snuff and chewing tobacco), E-Vapour Products (closed and open); Heated Tobacco; and Tobacco Free Oral Nicotine. Smoking paraphernalia such as pipes, rolling papers, lighters or matches, etc., are not included, nor are nicotine replacement therapy (NRT) products, which are part of Euromonitor's Passport Consumer Healthcare database.
See all of our definitionsThis report originates from Passport, our Tobacco research and analysis database.
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