Report Published: "Cigars in Russia"

From: Fast Market Research, Inc.
Published: Tue Aug 25 2015

The tradition of cigar/cigarillo smoking is not very common in Russia. It is not cheap and not popular among ordinary people. Smoking cigars in Russia is always associated with wealth and luxury. It is perceived as fashion, rather than tradition. In Soviet times, the USSR was Cuba’s largest strategic partner and Soviet citizens could find Cuban cigars in several specialist Cuban cigar shops in Moscow. Such cigars cost the same as a mid price pack of cigarettes and could be bought and smoked straight away. However, they were not fully appreciated as people could not generally afford such luxurious products. Thus, the mass culture of cigar smoking in Russia arose only in the mid-1990s.

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Competitive Landscape

Russian cigars witnessed no significant changes in its competitive landscape in 2014. Top Cigars Corp led cigars excluding cigarillos in 2014 with 54% volume share. However, the company witnessed the biggest decrease in share in 2014 due to insufficient promotion. Top Cigars Corp was founded in 2009 and is the official distributor of all brands by Corporación Habanos SA. Romeo y Julieta (also the most popular brand in cigars excluding cigarillos) and Guantanamera are the most popular brands offered by this company.

Industry Prospects

Cigars is set to record a volume decline over the forecast period with a -1% CAGR. All types are expected to decline over the forecast period with the exception of cigarillos. The main reasons for the decline are the anti-smoking law, constant increases in excise taxes on cigars and cigarillos, and thus increased unit price. In January 2015, it increased by 51% to reach RUB128 per one unit. In 2016, it will be raised by 10% to reach RUB141 per one unit. In 2017, excise taxes will be raised by 10% to reach RUB155 per one unit. There were changes in the geopolitical situation in Europe that are followed by the introduction of sanctions against Russia. All of these led to a marked weakening of the ruble currency in 2014. This is why the level of welfare of citizens greatly worsened. Due to the fact that more than half of all cigars and tobacco are imported, purchase prices increased significantly. If these conditions continue in future, domestic producers will benefit in comparison with importers. So, the volume shares for individual companies within cigars are expected to change over the forecast period.

Report Overview

Discover the latest market trends and uncover sources of future market growth for the Cigars industry in Russia with research from Euromonitor's team of in-country analysts.

Find hidden opportunities in the most current research data available, understand competitive threats with our detailed market analysis, and plan your corporate strategy with our expert qualitative analysis and growth projections.

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