Heat-not-burn market downturn after Ukraine raises consumption tax

By October 27, 2021Heat not burn news

According to the news from the American Tobacco Communication Network, after Ukraine increased the excise tax on heat-not-burn tobacco products by 320% on January 1, 2021, the country’s heat-not-burn market has now almost stopped growing.

 

According to Kostas Salvaras, local business manager of Philip Morris International Tobacco International (PMI) in Ukraine, the Ukrainian heated cigarette market will grow by 80% in 2020, but after a substantial tax increase in early 2021, the retail price of heated cigarette sticks will increase on average 13 Ukrainian hryvnia, the growth rate of the heated cigarette market has also progressed from slowing down to almost stopping. At the same time, PMI has observed an increase in the number of heat-not-burn tobacco products smuggled from neighboring countries with lower prices.

According to PMI forecasts, the Ukrainian heated cigarette market will show a downward trend in the future, and it is expected that in the fourth quarter of 2021, the Ukrainian government’s tax revenue from heat-not-burn tobacco products will be reduced by 60% to 70% compared to the same period in 2020.

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