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Cigarettes in Austria

Euromonitor International

July 2019

C I G A R E T T E S I N A U S T R I A P a s s p o r t i

LIST OF CONTENTS AND TABLES

Headlines ..................................................................................................................................... 1 Prospects ..................................................................................................................................... 1

Smoking Less Fashionable Among Teenagers Due To Health Concerns ................................ 1 Ongoing Tax Rises Lead To Increasing Unit Prices and Changing Purchasing Patterns ......... 1 EU Track and Trace System To Reduce Illicit Trade ................................................................ 1

Competitive Landscape ................................................................................................................ 2

Re-launch of Chesterfield Supports the Leading Player’s Position ........................................... 2 M Tabak Changes Distribution Strategy Due To the Costs of Track and Trace ....................... 2 Tschick Saved by A New Owner .............................................................................................. 2

Taxation and Pricing ..................................................................................................................... 2

Taxation Rates.......................................................................................................................... 2

Summary 1 Taxation and Duty Levies 2013-2018 ........................................................... 2

Average Cigarette Pack Price Breakdown ................................................................................ 3

Summary 2 Average Cigarette Pack Price Breakdown: Brand Examples ....................... 3

Category Data .............................................................................................................................. 4

Table 1 Sales of Cigarettes: Volume 2013-2018 ....................................................... 4 Table 2 Sales of Cigarettes by Category: Value 2013-2018 ..................................... 4 Table 3 Sales of Cigarettes: % Volume Growth 2013-2018 ...................................... 4 Table 4 Sales of Cigarettes by Category: % Value Growth 2013-2018 ..................... 4 Table 5 Sales of Cigarettes by Blend: % Volume 2013-2018 .................................... 5 Table 6 Sales of Cigarettes by Standard/Menthol/Capsule: % Volume 2013-

2018 ............................................................................................................. 5 Table 7 Sales of Cigarettes by Regular/Slim/Superslim/Microslim: % Volume

2013-2018 .................................................................................................... 5 Table 8 Sales of Cigarettes by Pack Size: % Volume 2013-2018 ............................. 5 Table 9 Sales of Cigarettes by Price Band: % Volume 2013-2018 ........................... 5 Table 10 NBO Company Shares of Cigarettes: % Volume 2014-2018 ....................... 6 Table 11 LBN Brand Shares of Cigarettes: % Volume 2015-2018 .............................. 6 Table 12 Sales of Cigarettes by Distribution Format: % Volume 2013-2018 ............... 8 Table 13 Illicit Trade Estimate of Cigarettes: Volume 2013-2018................................ 8 Table 14 Forecast Sales of Cigarettes: Volume 2018-2023 ........................................ 8 Table 15 Forecast Sales of Cigarettes by Category: Value 2018-2023 ....................... 9 Table 16 Forecast Sales of Cigarettes: % Volume Growth 2018-2023 ....................... 9 Table 17 Forecast Sales of Cigarettes by Category: % Value Growth 2018-

2023 ............................................................................................................. 9 Table 18 Forecast Sales of Cigarettes by Blend: % Volume 2018-2023 ..................... 9 Table 19 Forecast Sales of Cigarettes by Standard/Menthol/Capsule: %

Volume 2018-2023 ..................................................................................... 10 Table 20 Forecast Sales of Cigarettes by Regular/Slim/Superslim/Microslim: %

Volume 2018-2023 ..................................................................................... 10 Table 21 Forecast Sales of Cigarettes by Pack Size: % Volume 2018-2023 ............ 10 Table 22 Forecast Sales of Cigarettes by Price Band: % Volume 2018-2023 .......... 10

C I G A R E T T E S I N A U S T R I A P a s s p o r t 1

CIGARETTES IN AUSTRIA

HEADLINES ▪ Cigarettes records a flat retail value performance and a 4% retail volume decline to reach

EUR3.2 billion and 12.8 billion sticks in 2018

▪ The significant retail volume decline in sales of cigarettes in 2018 surprises the industry

▪ Philip Morris Austria continues to lead cigarettes with a 39% retail volume share in 2018

▪ Cigarettes is expected to record a negative retail volume CAGR of 3% over the forecast

period as fewer young people take up smoking due to health concerns

PROSPECTS

Smoking Less Fashionable Among Teenagers Due To Health Concerns

The cigarette industry was surprised by the steep decline in retail volume sales in 2018 as

health awareness continued to rise and the poor image of smoking intensified, particularly

among younger demographics. The volume decline even led to flat retail value sales in 2018,

despite further rises in specific taxation on cigarettes. Although the percentage of the adult

population who smoked declined over the review period, the actual number of adult smokers

also fell for the first time in the review period in 2018 after steady increases over most of the

period. Smoking in public and in the presence of minors is increasingly regarded as socially

unacceptable, and younger demographics no longer regard smoking as “cool”. The actual

number of smokers is expected to continue to fall, leading to further retail volume declines for

cigarettes throughout the forecast period.

Ongoing Tax Rises Lead To Increasing Unit Prices and Changing Purchasing Patterns

Further rises in specific taxation on cigarettes in 2018 had a number of influences on

cigarettes in 2018. Higher prices were key in reducing the actual number of smokers during the

year, but also had an influence on the type of cigarettes being purchased by those who

continued to smoke. The increases in the actual amounts of ad valorem excise and therefore

VAT payable on premium cigarettes were higher than those on mid-price and economy

cigarettes, despite the new tax structure taking steps to even out the taxes on different price

brands. This encouraged many smokers to switch from premium brands to mid-price and, in

particular, economy cigarettes, producing a significant increase in the retail volume share of

economy cigarettes in 2018, largely at the expense of premium. This pattern is set to accelerate

over the forecast period, which is likely to lead to a lacklustre current retail value performance

for cigarettes as a whole going forward.

EU Track and Trace System To Reduce Illicit Trade

Illicit cigarettes have traditionally held a significant share of sales in Austria, and even

increased their share over the review period as volume sales remained flat while those of legal

cigarettes declined. With prices rising continuously, cigarettes have remained much cheaper in

neighbouring countries and illegal imports have continued despite the government’s efforts to

stem the trade. The EU track and trace system is due to come into force in Austria in mid-2019.

The system aims to ensure that tobacco products sold in the EU can be traced by the

C I G A R E T T E S I N A U S T R I A P a s s p o r t 2

introduction of unique identification codes, as well as the introduction of a number of

authentication systems to ensure authenticity and security. These measures are expected to

lead to declines in the illicit trade becoming more aligned with those of the legal trade over the

forecast period.

COMPETITIVE LANDSCAPE

Re-launch of Chesterfield Supports the Leading Player’s Position

The leading player, Philip Morris Austria, maintained its volume share in cigarettes in 2018.

The company re-launched its leading Chesterfield brand in March 2018, featuring fresh pack

designs for improved differentiation and new sub brand names, including Original instead of

Red, Remix2 instead of Twice, Unplugged Original instead of True Red and Unplugged Blue

instead of True Blue. The move aims to help Chesterfield defend its leading position, although it

is not expected to lead to notable growth going forward.

M Tabak Changes Distribution Strategy Due To the Costs of Track and Trace

Domestic player, M Tabak, changed its distribution strategy in an effort to minimise the costs

of new laws concerning tobacco products, in particular of implementing the EU track and trace

system. From 15 November 2018 all M Tabak’s products in Upper Austria are to be distributed

by the Austrian distributor, Moosmayr.

Tschick Saved by A New Owner

The small domestic cigarette manufacturer, RL Tschickfabrik filed for bankruptcy in January

2019. The company manufactured the last domestic cigarette brand, Tschick, and it was feared

the brand would disappear from the market. However, Swiss start-up, Koch & Gsell, purchased

the brand and set up a subsidiary in Austria in order to continue marketing the brand. However,

it is likely to remain a niche brand, with little impact on the overall cigarette category.

TAXATION AND PRICING

Taxation Rates

The fixed tax rate on cigarettes was EUR50.00 per 1,000 sticks in January 2017, which was

increased to EUR53.00 per 1,000 sticks on1 April 2017 and EUR58.00 per 1,000 sticks after 1

April 2018. In addition, a 39% share of the retail price was deducted as a variable tax in 2015.

This was increased to 37.5% in April 2018, which is designed to tax differently priced cigarettes

more equally, aiming to limit the range of cigarette prices. On 1 April 2019, the minimum retail

margin for tobacco specialists will be increased significantly which will lead to an average price

increase of around EUR0.01 per stick.

VAT/sales tax for all tobacco products remained at 16.7% of the total rsp over the review

period. VAT is normally expressed as 20% of the net price.

High taxation over the review period had a significant impact on cigarettes, driving a

consumer shift towards cheaper economy brands.

Tax increases usually occur either after 31 December or 1 April.

Summary 1 Taxation and Duty Levies 2013-2018

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Taxation

Type

Units 2013 2014 2015 2016 2017 2018

valorem

excise

(%) 42.0 41.0 40.0 39.0 39.0 37.5

VAT/sale

s taxes

(%) 16.7 16.7 16.7 16.7 16.7 16.7

Specific

taxes

(EUR per

1,000)

35.0 40.0 45.0 50.0 53.0 58.0

Source: Legal Information System of the Republic of Austria

Average Cigarette Pack Price Breakdown

Manufacturers raise the prices of their brands after the government imposes higher taxes on

tobacco products.

The high taxes levied on cigarettes in Austria meant that margins for manufacturers,

wholesalers and retailers were relatively low over the review period. As regulated by the tobacco

monopoly law, 53% of the retail price is due to the retailer.

However, over the review period, retailers suffered from a strong shift towards economy

brands. This has had a particularly severe impact on tobacco specialists, which rely on tobacco

products as their main source of income. As a result, many such outlets have increasingly

expanded their product ranges to include other items such as magazines, daily newspapers,

snacks, soft drinks, lottery tickets, stamps and tobacco accessories.

Summary 2 Average Cigarette Pack Price Breakdown: Brand Examples

P = ‘price’

in Euro

Premium Mid Priced Economy

Marlboro

Red

Memphis

Classic

Chesterfiel

d Blue

(Pack of

20)

(Pack of

20)

(Pack of

20)

P % P % P %

Wholesale 0.64 11.63 0.55 10.84 0.53 10.63

Retailer 0.72 13.11 0.62 12.24 0.60 12.00

TOTAL

Retained

1.36 24.74 1.18 23.08 1.13 22.63

Specific

Excise

1.16 21.09 1.16 22.75 1.16 23.20

valorem

Excise

2.06 37.50 1.91 37.50 1.88 37.50

VAT 0.92 16.67 0.85 16.67 0.83 16.67

C I G A R E T T E S I N A U S T R I A P a s s p o r t 4

TOTAL

Tax

4.14 75.26 3.92 76.92 3.87 77.37

End Price 5.50 100.00 5.10 100.00 5.00 100.00

Source: Calculated from storecheck data and Taxation and Duty Levies Table. Notes: Figures may not sum up to 100% due to rounding

CATEGORY DATA

Table 1 Sales of Cigarettes: Volume 2013-2018

million sticks 2013 2014 2015 2016 2017 2018 Cigarettes 14,071.4 13,853.3 13,669.0 13,454.4 13,232.4 12,760.0

Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 2 Sales of Cigarettes by Category: Value 2013-2018

EUR million 2013 2014 2015 2016 2017 2018 Cigarettes Including 3,041.9 3,116.4 3,197.2 3,257.9 3,303.5 3,307.2 Fine Cut Stick Equivalent Fine Cut Cigarettes 74.0 85.6 97.5 105.6 108.9 111.1 Cigarettes 2,967.9 3,030.8 3,099.7 3,152.3 3,194.6 3,196.0

Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 3 Sales of Cigarettes: % Volume Growth 2013-2018

% volume growth 2017/18 2013-18 CAGR 2013/18 Total Cigarettes -3.6 -1.9 -9.3

Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 4 Sales of Cigarettes by Category: % Value Growth 2013-2018

% current value growth 2017/18 2013-18 CAGR 2013/18 Total Cigarettes Including Fine Cut Stick 0.1 1.7 8.7 Equivalent Fine Cut Cigarettes 2.0 8.5 50.2 Cigarettes 0.0 1.5 7.7

Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

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Table 5 Sales of Cigarettes by Blend: % Volume 2013-2018

% retail volume 2013 2014 2015 2016 2017 2018 American Blend 73.9 73.6 73.4 73.2 73.0 72.8 Virginia 15.8 16.0 16.2 16.3 16.4 16.5 Other Blend 10.3 10.4 10.5 10.5 10.6 10.7 Total 100.0 100.0 100.0 100.0 100.0 100.0

Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 6 Sales of Cigarettes by Standard/Menthol/Capsule: % Volume 2013-2018

% retail volume 2013 2014 2015 2016 2017 2018 Standard (non-capsule/ 95.4 94.8 95.8 96.0 96.3 96.3 non-menthol) Flavour Capsule (all 3.0 3.7 3.0 3.1 3.2 3.3 flavours) Menthol (non-capsule) 1.5 1.5 1.1 0.9 0.5 0.4 Total 100.0 100.0 100.0 100.0 100.0 100.0

Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 7 Sales of Cigarettes by Regular/Slim/Superslim/Microslim: % Volume 2013-2018

% retail volume 2013 2014 2015 2016 2017 2018 Regular 96.9 96.8 97.0 97.1 97.2 97.2 Slim 1.7 1.6 1.6 1.6 1.5 1.5 Superslim 1.4 1.5 1.4 1.4 1.3 1.3 Microslim - - - - - - Total 100.0 100.0 100.0 100.0 100.0 100.0

Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 8 Sales of Cigarettes by Pack Size: % Volume 2013-2018

% retail volume 2013 2014 2015 2016 2017 2018 20s 95.9 95.8 95.5 95.0 94.9 94.7 20 + 4.1 4.2 4.5 5.0 5.1 5.3 Total 100.0 100.0 100.0 100.0 100.0 100.0

Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 9 Sales of Cigarettes by Price Band: % Volume 2013-2018

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% retail volume 2013 2014 2015 2016 2017 2018 Economy price band 50.3 53.3 57.6 59.4 60.9 62.2 Mid price band 20.5 18.2 17.1 16.6 16.3 16.2 Premium price band 29.2 28.4 25.4 24.0 22.8 21.6 Total 100.0 100.0 100.0 100.0 100.0 100.0

Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 10 NBO Company Shares of Cigarettes: % Volume 2014-2018

% retail volume Company 2014 2015 2016 2017 2018 Philip Morris Austria 38.0 38.7 39.1 39.2 39.1 GmbH JTI Austria GmbH 14.2 15.3 16.0 16.6 17.1 Austria Tabak GmbH 18.7 17.3 16.3 15.6 15.2 Imperial Tobacco 15.0 14.7 14.6 14.6 14.7 Austria Marketing Service GmbH British American 11.0 10.9 10.8 10.9 11.0 Tobacco (Austria) GmbH Philip Morris GmbH - - - - - Others 3.0 3.1 3.3 3.1 2.9 Total 100.0 100.0 100.0 100.0 100.0

Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 11 LBN Brand Shares of Cigarettes: % Volume 2015-2018

% retail volume Brand (GBO) Company (NBO) 2015 2016 2017 2018 Chesterfield Philip Morris Austria 15.2 16.2 17.0 17.3 (Philip Morris GmbH International Inc) Marlboro (Philip Philip Morris Austria 13.3 13.1 12.8 12.7 Morris GmbH International Inc) John Player Special Imperial Tobacco - 8.6 8.5 8.5 (Imperial Brands Plc) Austria Marketing Service GmbH Smart (Japan Austria Tabak GmbH 6.9 6.9 6.8 6.8 Tobacco Inc) Benson & Hedges JTI Austria GmbH 5.7 5.9 6.1 6.2 (Japan Tobacco Inc) Winston (Japan JTI Austria GmbH 5.2 5.5 5.6 5.8 Tobacco Inc) Marlboro Gold Philip Morris Austria 6.6 6.2 5.9 5.6 (Philip Morris GmbH International Inc) Camel (Japan JTI Austria GmbH 4.4 4.7 4.9 5.2 Tobacco Inc) Memphis (Japan Austria Tabak GmbH 5.9 5.5 5.2 5.1

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Tobacco Inc) Pall Mall (British British American 4.9 5.0 5.0 5.0 American Tobacco Plc) Tobacco (Austria) GmbH Mister Philip Philip Morris Austria 3.0 3.4 3.5 3.5 Morris (Philip GmbH Morris International Inc) Gauloises Blondes Imperial Tobacco - 2.9 2.8 2.8 Rouge (Imperial Austria Marketing Brands Plc) Service GmbH Parisienne (British British American 2.7 2.7 2.6 2.7 American Tobacco Plc) Tobacco (Austria) GmbH Lucky Strike British American 2.2 2.2 2.3 2.4 (British American Tobacco (Austria) GmbH Tobacco Plc) West (Imperial Imperial Tobacco - 1.6 1.7 1.7 Brands Plc) Austria Marketing Service GmbH Memphis Strato Blue Austria Tabak GmbH 1.8 1.5 1.4 1.2 (Japan Tobacco Inc) Meine Sorte (Japan Austria Tabak GmbH 1.2 1.1 1.1 1.0 Tobacco Inc) Gauloises Blondes Imperial Tobacco - 0.8 0.8 0.8 (Imperial Brands Plc) Austria Marketing Service GmbH Vogue (British British American 0.8 0.7 0.7 0.7 American Tobacco Plc) Tobacco (Austria) GmbH Falk (Japan Tobacco Austria Tabak GmbH 0.5 0.5 0.5 0.5 Inc) Davidoff Blue Imperial Tobacco - 0.4 0.4 0.3 (Imperial Brands Plc) Austria Marketing Service GmbH Hobby (Japan Austria Tabak GmbH 0.3 0.3 0.3 0.3 Tobacco Inc) HB (British British American 0.3 0.2 0.2 0.2 American Tobacco Plc) Tobacco (Austria) GmbH Dames (Japan Austria Tabak GmbH 0.3 0.2 0.2 0.2 Tobacco Inc) Ernte 23 (Imperial Imperial Tobacco - 0.2 0.2 0.2 Brands Plc) Austria Marketing Service GmbH Casablanca (Japan Austria Tabak GmbH 0.1 0.1 0.1 0.1 Tobacco Inc) John Player Special Imperial Tobacco 8.6 - - - (Imperial Tobacco Austria Marketing Group Plc) Service GmbH Gauloises Blondes Imperial Tobacco 2.9 - - - Rouge (Imperial Austria Marketing Tobacco Group Plc) Service GmbH West (Imperial Imperial Tobacco 1.5 - - - Tobacco Group Plc) Austria Marketing Service GmbH Gauloises Blondes Imperial Tobacco 0.8 - - - (Imperial Tobacco Austria Marketing Group Plc) Service GmbH Others Others 4.7 3.9 3.4 3.3 Total Total 100.0 100.0 100.0 100.0

Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

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Table 12 Sales of Cigarettes by Distribution Format: % Volume 2013-2018

% retail volume 2013 2014 2015 2016 2017 2018 Store-Based Retailing 78.0 77.9 77.8 77.8 77.9 79.1 - Grocery Retailers 78.0 77.9 77.8 77.8 77.9 79.1 -- Convenience Stores - - - - - - -- Discounters - - - - - - -- Forecourt Retailers 5.1 5.2 5.2 5.3 5.2 5.2 -- Hypermarkets - - - - - - -- Supermarkets - - - - - - -- Food/drink/tobacco 63.4 63.4 63.3 63.3 63.5 64.8 specialists --- Food/drink - - - - - - specialists --- Tobacco specialists 63.4 63.4 63.3 63.3 63.5 64.8 -- Independent Small 0.4 0.4 0.3 0.3 0.3 0.2 Grocers -- Other Grocery 9.0 9.0 9.0 8.9 8.9 8.9 Retailers --- Newsagent- 9.0 9.0 9.0 8.9 8.9 8.9 tobacconists/kiosks --- Street vendors - - - - - - - Mixed Retailers - - - - - - -- Department Stores - - - - - - -- Other Mixed Retailers - - - - - - - Non-Grocery Specialists - - - - - - -- Drugstores/ - - - - - - parapharmacies -- Other Non-Grocery - - - - - - Specialists Non-Store Retailing 10.5 10.6 10.7 10.8 11.0 10.8 - Vending 10.5 10.6 10.7 10.8 11.0 10.8 - Internet Retailing - - - - - - Non-retail channels 11.4 11.4 11.5 11.4 11.1 10.0 - Bar-tobacconists 2.2 2.2 2.2 2.2 2.1 1.8 - Hotels/restaurants/bars 9.2 9.2 9.2 9.2 9.0 8.2 Total 100.0 100.0 100.0 100.0 100.0 100.0

Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 13 Illicit Trade Estimate of Cigarettes: Volume 2013-2018

million sticks 2013 2014 2015 2016 2017 2018 Legal sales 14,071.4 13,853.3 13,669.0 13,454.4 13,232.4 12,760.0 Illicit trade 2,496.5 2,491.5 2,484.0 2,591.6 2,561.7 2,514.3 % penetration of 15.1 15.2 15.4 16.2 16.2 16.5 illicit trade Actual consumption 16,567.9 16,344.8 16,153.0 16,046.0 15,794.1 15,274.3

Source: Euromonitor International from official statistics, trade associations, trade interviews

Table 14 Forecast Sales of Cigarettes: Volume 2018-2023

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million sticks 2018 2019 2020 2021 2022 2023 Cigarettes 12,760.0 12,467.8 12,162.4 11,835.2 11,467.1 11,055.5

Source: Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Table 15 Forecast Sales of Cigarettes by Category: Value 2018-2023

EUR million 2018 2019 2020 2021 2022 2023 Cigarettes Including 3,307.2 3,271.2 3,222.0 3,160.1 3,082.6 2,988.9 Fine Cut Stick Equivalent Fine Cut Cigarettes 111.1 110.7 109.6 108.0 106.3 104.5 Cigarettes 3,196.0 3,160.4 3,112.4 3,052.1 2,976.3 2,884.4

Source: Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Table 16 Forecast Sales of Cigarettes: % Volume Growth 2018-2023

% volume growth 2018/19 2018-23 CAGR 2018/23 Total Cigarettes -2.3 -2.8 -13.4

Source: Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Table 17 Forecast Sales of Cigarettes by Category: % Value Growth 2018-2023

% constant value growth 2018/2019 2018-23 CAGR 2018/23 Total Cigarettes Including Fine Cut Stick -1.1 -2.0 -9.6 Equivalent Fine Cut Cigarettes -0.3 -1.2 -5.9 Cigarettes -1.1 -2.0 -9.8

Source: Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Table 18 Forecast Sales of Cigarettes by Blend: % Volume 2018-2023

% retail volume 2018 2019 2020 2021 2022 2023 American Blend 72.8 72.7 72.5 72.4 72.3 72.2 Virginia 16.5 16.6 16.6 16.7 16.7 16.7 Other Blend 10.7 10.8 10.9 10.9 11.0 11.1 Total 100.0 100.0 100.0 100.0 100.0 100.0

Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

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Table 19 Forecast Sales of Cigarettes by Standard/Menthol/Capsule: % Volume 2018- 2023

% retail volume 2018 2019 2020 2021 2022 2023 Standard (non-capsule/ 96.3 96.3 97.4 100.0 100.0 100.0 non-menthol) Flavour Capsule (all 3.3 3.4 2.3 - - - flavours) Menthol (non-capsule) 0.4 0.3 0.2 - - - Total 100.0 100.0 100.0 100.0 100.0 100.0

Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 20 Forecast Sales of Cigarettes by Regular/Slim/Superslim/Microslim: % Volume 2018-2023

% retail volume 2018 2019 2020 2021 2022 2023 Regular 97.2 97.3 97.4 97.6 97.7 97.8 Slim 1.5 1.4 1.4 1.3 1.3 1.2 Superslim 1.3 1.2 1.2 1.1 1.0 1.0 Microslim - - - - - - Total 100.0 100.0 100.0 100.0 100.0 100.0

Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 21 Forecast Sales of Cigarettes by Pack Size: % Volume 2018-2023

% retail volume 2018 2019 2020 2021 2022 2023 20s 94.7 94.6 94.6 94.5 94.4 94.4 20 + 5.3 5.4 5.4 5.5 5.5 5.6 Total 100.0 100.0 100.0 100.0 100.0 100.0

Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 22 Forecast Sales of Cigarettes by Price Band: % Volume 2018-2023

% retail volume 2018 2019 2020 2021 2022 2023 Economy price band 62.2 63.3 64.1 65.0 66.9 67.8 Mid price band 16.2 16.1 16.0 15.7 15.5 15.2 Premium price band 21.6 20.6 19.9 19.3 17.6 17.0 Total 100.0 100.0 100.0 100.0 100.0 100.0

Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources