In 2024, economic conditions played a significant role in shaping the development of the tobacco market in Latvia, with rising price sensitivity driving noticeable shifts in consumer behaviour. As inflation pressures and increased excise duties continued to erode disposable incomes, many smokers began seeking more affordable alternatives to factory-made cigarettes. This led to a growing preference for lower-cost options such as fine cut tobacco, which also offered greater flexibility. At the same time, the high price of premium products and reduced affordability contributed to stagnation or decline in categories like cigars and heated tobacco. The persistent presence of illicit cigarettes was also reflective of economic pressures, with some consumers turning to untaxed products to manage costs.
Latvia’s tobacco market registered a further decline in volume sales in 2024, amid ongoing declines in traditional cigarette consumption and rising consumer shifts towards alternative nicotine products. Total cigarette volumes continued their gradual decline, reflecting both regulatory pressure and changing consumer behaviour, with the Illicit cigarette trade remained a significant but declining component of the market. Consumers increasingly turned to lower-cost alternatives like fine-cut tobacco, which saw strong growth, reflecting rising price sensitivity. Meanwhile, heated tobacco products showed signs of plateauing, influenced by new regulatory restrictions and market saturation.
Philip Morris International (PMI) remained the largest player in the Latvian tobacco market, with brands such as Marlboro and L&M showing modest gains, particularly due to pricing strategies and pack innovation aimed at maintaining relevance in a shrinking market. Greis Logistika SIA (distributor for British American Tobacco retained a sizable presence through brands like Rothmans and Kent, likely due to the more aggressive pricing strategies of its competitors.
The Latvian cigarettes market remains heavily concentrated in offline retail channels, with no significant movement towards e-commerce. Within offline retail, grocery retailers dominate the landscape, although their share declined slightly over the review period, making room for more specialised formats. Supermarkets represented the clear leader in the grocery channel, reflecting shifting consumer preferences towards larger, more convenient retail formats that offer competitive pricing, reliable availability, and a broader product range. Meanwhile. convenience retailers, including both convenience stores and forecourt retailers, have steadily expanded their share and now represent a significant proportion of volume, catering to impulse buyers and urban smokers.
Latvia’s tobacco market is expected to continue its gradual decline in volume terms over the forecast period, driven by a combination of tightening regulations, growing health awareness, and changing social norms. Traditional cigarette consumption will likely fall further as smoking prevalence continues its downward trajectory, particularly among younger demographics. However, this decline will be partially offset by the resilience of lower-cost categories such as fine cut tobacco and the cautious expansion of alternatives like heated tobacco, which remain attractive to price-sensitive and transitioning smokers.
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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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