Ukrainian legal cigarette market to narrow in 2013

Tobacco Cigarette

The Ukrainian legal cigarette market in 2013 could decrease to 75 billion cigarettes, in comparison to 80 billion items in 2012, states the director for corporate issues at Imperial Tobacco Ukraine, Yuriy Kyshko.

Yuriy Kyshko mentioned that growth in 2012 in the smuggling of cigarettes was observed on the Ukrainian market.

Imperial Tobacco Ukraine CFO Volodymyr Antypenko explained that according to an order of the company, TNS Ukraine experts carried out a research, under which counterfeit product consumption in Ukraine increased from 4.2% in October 2011 to 4.4% in October 2012.

Antypenko added that in 2012 some tobacco companies were participated in price wars on the Ukrainian cigarette market, which were described by the drop in the prices of some products by 15-20% in some locations.

He mentioned that starting with New Year only Imperial Tobacco Ukraine and Philip Morris Ukraine announced new prices of their tobacco products. He considers that the rest of tobacco companies did not raise prices due to the large amount of product stocks or expecting that the law on the hike of excise taxes will be not approved by the Ukrainian president.

Commenting on the impact of the smoking ban at restaurants and bars, which came into force on December 16, 2012 in Ukraine, Antypenko said that it’s difficult to identify how highly the requirement affected cigarette sales.

On November 20, 2012 the Ukrainian parliament passed law, raising excise duties for alcohol and tobacco.

The document supposes a rise in specific excise rates on non-filter cigarettes to Hr 72.70 per 1,000 cigarettes, and on filtered from Hr 110.64 per 1,000 to Hr 162.60 per 1,000 cigarettes.

Starting January 1, 2014, the specific excise rate on non-filter cigarettes will be established at Hr 77.50 per 1,000 items, from January 1, 2015, at Hr 82.50 per 1,000 cigarettes, and excise rate on filtered cigarettes will be Hr 173.2 and Hr 184.50 per 1,000 items.

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