1. Tobacco in Slovakia
Report Summary
Slovak tobacco market remains steady in 2010
Sales of tobacco in Slovakia remained stable in 2010, growing modestly in current value terms. A
substantial improvement was notable particularly within cigarettes as the category managed to record
marginal growth compared to a 1% decline in 2009 in volume terms. This was mainly the result of unit
price stability as well as minor pre-stocking activity during the last few months of 2010.
Slovakia on an important trade route for illegal imports
Slovakia lies on a trade route connecting Eastern and Western Europe, particularly for goods
originating from Ukraine and Russia. This is a particularly popular route for smugglers trying to evade
tax. The illicit trade of cigarettes rose by 3% in 2010, attempting to satisfy the increasing demand for
cheap goods especially in Western Europe. Only a small fraction of these imports are meant for
Slovakia itself as most shipments continue westwards. These cigarettes originate from illegal factories
in Ukraine and Romania, with both fake economy and premium brands made from the same local
tobacco blend, thus making it a very profitable business.
Philip Morris Slovakia continues to lead the market in 2010
Philip Morris Slovakia maintained its leading position in 2010 and even managed to increase the gap
between itself and second ranked manufacturer Imperial Slovakia Tobacco market. It is estimated that
Philip Morris accounts for more than 50% of total tobacco volume sales in the country.
Excise tax set to reach a maximum by the end of 2013
The Slovak government has introduced a plan to continually increase taxation so as to bring it in line
with the limit set by the European Commission. This will be done in two phases, with the first
commencing in 2011 and a second bigger increase taking place in 2013. This will put additional
pressure on manufacturers and force unit prices up significantly. However, there have been recent
rumours that this may happen even earlier, starting in 2012, as a result of austerity measures adopted
by the government to reduce Slovakia’s fiscal deficit.
Legislative amendment bans sale of certain pack sizes
Following the introduction of anti-smoking legislation (No 406/2009), cigarettes are now only allowed
to be sold in two different pack sizes. This legislation came into effect in August 2010 and from that
date all distributors had to remove packs containing any number of cigarettes other than 19 or 20
sticks. This led to the disappearance of the recently popular 10-unit pack, primarily purchased by
people who do not smoke regularly (ie social smokers).
2. TABLE OF CONTENTS
Tobacco in Slovakia - Industry Overview
EXECUTIVE SUMMARY
Slovak tobacco market remains steady in 2010
Slovakia on an important trade route for illegal imports
Philip Morris Slovakia continues to lead the market in 2010
Excise tax set to reach a maximum by the end of 2013
Legislative amendment bans sale of certain pack sizes
OPERATING ENVIRONMENT
Legislative overview/ FCTC ratification
Summary 1 Legislation Summary at a Glance
Country-specific legislation:
Minimum legal smoking age
Smoking Prevalence
Table 1 Smoking Prevalence in Adult Population 2005-2010
Table 2 Number of Smokers by Gender 2005-2010
Tar levels
Health warnings
Advertising & Sponsorship
Point-of-sale Display Bans
Smoking in public places
Low Ignition Propensity (LIP) regulation
Electronic cigarettes
Litigation
Death by Cause
Table 3 Death by Cause 2005-2010
TAXATION AND PRICING
Duty paid packet marks
Taxation rates
Table 4 Taxation and Duty Levies for Cigarettes
Table 5 Taxation and Duty Levies for Cigars/Cigarillos
Table 6 Taxation and Duty Levies for RYO Cut Tobacco
Average cigarette pack price breakdown
Table 7 Average Cigarette Pack Price Breakdown: Brand Examples 2010
PRODUCTION/IMPORTS/EXPORTS
Table 8 Production/Imports/Exports 2005-2010
Table 9 Trade Statistics – Tobacco Leaf 2006-2010
Illicit trade in cigarettes
MARKET INDICATORS
Table 10 Illicit Trade Estimate of Cigarettes by Volume 2005-2010
MARKET DATA
Table 11 Sales of Tobacco by Category: Volume 2005-2010
Table 12 Sales of Tobacco by Category: Value 2005-2010
Table 13 Sales of Tobacco by Category: % Volume Growth 2005-2010
Table 14 Sales of Tobacco by Category: % Value Growth 2005-2010
3. Table 15 Forecast Sales of Tobacco by Category: Volume 2010-2015
Table 16 Forecast Sales of Tobacco by Category: Value 2010-2015
Table 17 Forecast Sales of Tobacco by Category: % Volume Growth 2010-2015
Table 18 Forecast Sales of Tobacco by Category: % Value Growth 2010-2015
DEFINITIONS
Summary 2 Research Sources
Tobacco in Slovakia - Company Profiles
Danczek Bratislava sro in Tobacco (Slovakia)
STRATEGIC DIRECTION
KEY FACTS
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
Summary 4 Danczek Bratislava sro: Competitive Position 2010
Imperial Tobacco Slovakia in Tobacco (Slovakia)
STRATEGIC DIRECTION
KEY FACTS
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
Summary 7 Imperial Tobacco Slovakia: Competitive Position 2010
Philip Morris Slovakia sro in Tobacco (Slovakia)
STRATEGIC DIRECTION
KEY FACTS
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
Summary 10 Philip Morris Slovakia sro: Competitive Position 2010
Cigarettes in Slovakia - Category Analysis
HEADLINES
TRENDS
Cigarette sales remained stable in 2010 thanks to a multitude of factors. The smoking population
benefited from the number of smoking juveniles coming of age as well as the emergence of the so-
called “party smoker”, ie somebody who only smokes at parties and various social events. The
forthcoming tobacco excise tax hike in February 2011 also led to some forestalling on the part of
consumers. However, as forestalling is banned for distributors and retailers, this impacted demand
only slightly.
COMPETITIVE LANDSCAPE
The cigarette industry in Slovakia is dominated by two international companies. Philip Morris Slovakia
continued to lead in 2010 and was able to strengthen its volume share to 45%. Ranked second was
Imperial Tobacco Slovakia with a 39% volume share. Taking into consideration the current market
situation, it would be virtually impossible for domestic players to successfully compete in this industry.
The remaining 16% volume share was split between other foreign multinationals.
NEW PRODUCT DEVELOPMENTS
Summary 11 Cigarettes - New Product Launches
DISTRIBUTION
4. PROSPECTS
As excise tax on tobacco products is expected to soar, cigarette smokers will be forced to look for
alternatives. This increased pressure on each smoker’s budget will force more and more people to
occasionally seek illicit products. RYO tobacco is expected to strengthen, particularly in the years
following the tax hikes. Over the forecast period cigarettes is expected to remain largely flat in both
volume and constant value terms, representing a much weaker performance than that of the review
period.
CATEGORY BACKGROUND
Cigarettes: Price Bands
Summary 12 Cigarette Price Band Definitions
Cigarettes: Menthol/standard
Cigarettes: Filter/non-filter
Cigarettes: Carbon/standard filter
Cigarettes: Filter length
Cigarettes: Slims/superslims vs regular
Cigarettes: Pack size
Cigarettes: Pack type
CATEGORY DATA
Table 19 Sales of Cigarettes by Tar Level: Volume 2005-2010
Table 20 Sales of Cigarettes by Tar Level: Value 2005-2010
Table 21 Sales of Cigarettes by Tar Level: % Volume Growth 2005-2010
Table 22 Sales of Cigarettes by Tar Level: % Value Growth 2005-2010
Table 23 Sales of Cigarettes by Price Band: % Volume Breakdown 2005-2010
Table 24 Sales of Cigarettes by Standard/Menthol: % Volume Breakdown 2005-2010
Table 25 Sales of Cigarettes by Tobacco Type: % Volume Breakdown 2005-2010
Table 26 Sales of Cigarettes by Filter Vs Non-filter: % Volume Breakdown 2005-2010
Table 27 Sales of Filter Cigarettes by Carbon Vs Non-carbon: % Volume Breakdown 2005-2010
Table 28 Sales of Cigarettes by Length: % Volume Breakdown 2005-2010
Table 29 Sales of Cigarettes by Regular/Slim: % Volume Breakdown 2006-2010
Table 30 Sales of Cigarettes by Pack Size: % Volume Breakdown 2005-2010
Table 31 Sales of Cigarettes by Pack Type: % Volume Breakdown 2005-2010
Table 32 Cigarettes Company Shares 2006-2010
Table 33 Cigarettes Brand Shares 2007-2010
Table 34 Sales of Cigarettes by Distribution Format: % Analysis 2005-2010
Table 35 Cigarettes: Production, Imports and Exports: Total Volume 2005-2010
Table 36 Forecast Sales of Cigarettes by Tar Level: Volume 2010-2015
Table 37 Forecast Sales of Cigarettes by Tar Level: Value 2010-2015
Table 38 Forecast Sales of Cigarettes by Tar Level: % Volume Growth 2010-2015
Table 39 Forecast Sales of Cigarettes by Tar Level: % Value Growth 2010-2015
Table 40 Forecast Sales of Cigarettes by Price Band: % Volume Breakdown 2010-2015
Table 41 Forecast Sales of Cigarettes by Standard/Menthol: % Volume Breakdown 2010-2015
Table 42 Forecast Sales of Cigarettes by Tobacco Type: % Volume Breakdown 2010-2015
Table 43 Forecast Sales of Cigarettes by Filter Vs Non-filter: % Volume Breakdown 2010-2015
Table 44 Forecast Sales of Filter Cigarettes by Carbon Vs Non-carbon: % Volume Breakdown 2010-2015
Table 45 Forecast Sales of Cigarettes by Length: % Volume Breakdown 2010-2015
Table 46 Forecast Sales of Cigarettes by Regular/Slim: % Volume Breakdown 2010-2015
5. Table 47 Forecast Sales of Cigarettes by Pack Size: % Volume Breakdown 2010-2015
Table 48 Forecast Sales of Cigarettes by Pack Type: % Volume Breakdown 2010-2015
Cigars in Slovakia - Category Analysis
HEADLINES
TRENDS
As in most other post-Soviet Union countries, there is no significant tradition for cigars in Slovakia.
Prior to 1989, during the period of communism, there were only two domestic brands available, for
instance cigars called ‘virzinky’, produced at the now closed Smolnik factory. However, these products
were of low quality and their distribution was underdeveloped. Many smokers are only now just
discovering the taste of high-quality cigars which are being purchased only occasionally by a wide
number of regular cigarette smokers.
HANDMADE VERSUS MACHINE-MANUFACTURED SPLITS
Table 49 Sales of Cigars by Handmade vs Machine-manufactured 2006-2010
COMPETITIVE LANDSCAPE
Danczek Bratislava led the category in 2010 with a 36% volume share followed by My a mi sro with an
18% share. Both managed to increase their share slightly in 2010 while Imperial Tobacco Slovakia,
which ranked third, held a share of less than 2%.
NEW PRODUCT DEVELOPMENTS
Summary 13 Cigars and Cigarillos - New Product Launches
DISTRIBUTION
PROSPECTS
Higher excise taxes on tobacco products are expected to limit growth up to 2013. Significant tax hikes
are expected to take place over the course of the following three years and this will hamper growth
significantly. In spite of the negative impact of taxation and declining male smoking prevalence, cigars
and cigarillos is expected to register slower yet a still healthy volume CAGR of 3% over the forecast
period.
CATEGORY DATA
Table 50 Sales of Cigars by Category: Volume 2005-2010
Table 51 Sales of Cigars by Category: Value 2005-2010
Table 52 Sales of Cigars by Category: % Volume Growth 2005-2010
Table 53 Sales of Cigars by Category: % Value Growth 2005-2010
Table 54 Sales of Cigars by Handmade vs Machine Manufactured: % Volume Breakdown 2005-2010
Table 55 Company Shares of Cigars Excluding Cigarillos 2006-2010
Table 56 Brand Shares of Cigars Excluding Cigarillos 2007-2010
Table 57 Company Shares of Cigarillos 2006-2010
Table 58 Brand Shares of Cigarillos 2007-2010
Table 59 Sales of Cigars by Distribution Format: % Analysis 2005-2010
Table 60 Forecast Sales of Cigars by Category: Volume 2010-2015
Table 61 Forecast Sales of Cigars by Category: Value 2010-2015
Table 62 Forecast Sales of Cigars by Category: % Volume Growth 2010-2015
Table 63 Forecast Sales of Cigars by Category: % Value Growth 2010-2015
Smokeless Tobacco in Slovakia - Category Analysis
TRENDS
Smokeless tobacco sales in Slovakia are negligible
Smoking Tobacco in Slovakia - Category Analysis
HEADLINES
6. TRENDS
The tradition for pipe tobacco in Slovakia dates back to the 17th century. Currently, stylish classical
pipes are not showing significant growth potential. It is rare to see a person smoking a pipe during
his/her lunch break. Pipes are not as convenient to carry around as cigarettes and require a longer
time to prepare. This is why people prefer to smoke them at home or in a café as smoking in such
establishments is not completely banned. In general, increasing sales of flavoured tobacco for water
pipes was the main growth driver in 2010.
The Role and Effect of Cannabis/Marijuana
DISTRIBUTION
COMPETITIVE LANDSCAPE
Imperial Tobacco Slovakia dominated the category in 2010 with a volume share of 58%. It was followed
by TTI Slovakia and Nakhla Tobacco Co, which both held shares of 6%. Nakhla Tobacco specialises in
pipe tobacco, leading that category in 2010 with a volume share of 41%.
NEW PRODUCT DEVELOPMENTS
Summary 14 Smoking Tobacco - New Product Launches
PROSPECTS
Smoking tobacco is expected to record a volume CAGR of 1% and a constant value CAGR of 5% over
the forecast period.
CATEGORY DATA
Table 64 Sales of Smoking Tobacco by Category: Volume 2005-2010
Table 65 Sales of Smoking Tobacco by Category: Value 2005-2010
Table 66 Sales of Smoking Tobacco by Category: % Volume Growth 2005-2010
Table 67 Sales of Smoking Tobacco by Category: % Value Growth 2005-2010
Table 68 Company Shares of RYO Tobacco 2006-2010
Table 69 Brand Shares of RYO Tobacco 2007-2010
Table 70 Company Shares of Pipe Tobacco 2006-2010
Table 71 Brand Shares of Pipe Tobacco 2007-2010
Table 72 Sales of Smoking Tobacco by Distribution Format: % Analysis 2005-2010
Table 73 Forecast Sales of Smoking Tobacco by Category: Volume 2010-2015
Table 74 Forecast Sales of Smoking Tobacco by Category: Value 2010-2015
Table 75 Forecast Sales of Smoking Tobacco by Category: % Volume Growth 2010-2015
Table 76 Forecast Sales of Smoking Tobacco by Category: % Value Growth 2010-2015
Related Reports:
Tobacco in Austria
Tobacco in Slovenia
Tobacco in Ukraine
Tobacco in Ireland
Tobacco in Croatia
Tobacco in Ecuador
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