Tobacco in 2024: The big picture
In 2024, economic conditions played a significant role in shaping the development of the tobacco market in Latvia, with rising price sensitivity driving noticeable shifts in consumer behaviour. As inflation pressures and increased excise duties continued to erode disposable incomes, many smokers began seeking more affordable alternatives to factory-made cigarettes. This led to a growing preference for lower-cost options such as fine cut tobacco, which also offered greater flexibility. At the same time, the high price of premium products and reduced affordability contributed to stagnation or decline in categories like cigars and heated tobacco. The persistent presence of illicit cigarettes was also reflective of economic pressures, with some consumers turning to untaxed products to manage costs.
2024 key trends
Latvia’s tobacco market registered a further decline in volume sales in 2024, amid ongoing declines in traditional cigarette consumption and rising consumer shifts towards alternative nicotine products. Total cigarette volumes continued their gradual decline, reflecting both regulatory pressure and changing consumer behaviour, with the Illicit cigarette trade remained a significant but declining component of the market. Consumers increasingly turned to lower-cost alternatives like fine-cut tobacco, which saw strong growth, reflecting rising price sensitivity. Meanwhile, heated tobacco products showed signs of plateauing, influenced by new regulatory restrictions and market saturation.
Competitive landscape
Philip Morris International (PMI) remained the largest player in the Latvian tobacco market, with brands such as Marlboro and L&M showing modest gains, particularly due to pricing strategies and pack innovation aimed at maintaining relevance in a shrinking market. Greis Logistika SIA (distributor for British American Tobacco retained a sizable presence through brands like Rothmans and Kent, likely due to the more aggressive pricing strategies of its competitors.
Retail developments
The Latvian cigarettes market remains heavily concentrated in offline retail channels, with no significant movement towards e-commerce. Within offline retail, grocery retailers dominate the landscape, although their share declined slightly over the review period, making room for more specialised formats. Supermarkets represented the clear leader in the grocery channel, reflecting shifting consumer preferences towards larger, more convenient retail formats that offer competitive pricing, reliable availability, and a broader product range. Meanwhile. convenience retailers, including both convenience stores and forecourt retailers, have steadily expanded their share and now represent a significant proportion of volume, catering to impulse buyers and urban smokers.
What next for tobacco?
Latvia’s tobacco market is expected to continue its gradual decline in volume terms over the forecast period, driven by a combination of tightening regulations, growing health awareness, and changing social norms. Traditional cigarette consumption will likely fall further as smoking prevalence continues its downward trajectory, particularly among younger demographics. However, this decline will be partially offset by the resilience of lower-cost categories such as fine cut tobacco and the cautious expansion of alternatives like heated tobacco, which remain attractive to price-sensitive and transitioning smokers.
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Overview:
Understand the latest market trends and future growth opportunities for the Tobacco industry in Latvia with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
Key trends are clearly and succinctly summarised alongside the most current research data available. Understand and assess competitive threats and plan corporate strategy with our qualitative analysis, insight and confident growth projections.
Data and analysis in this report provides further detailed coverage dedicated to the following key categories, where applicable:
- Cigarettes
- Cigars, Cigarillos and Smoking Tobacco
- Smokeless Tobacco, E-Vapour Products and Heated Tobacco
If you're in the Tobacco industry in Latvia, our research will help you to make informed, intelligent decisions; to recognise and profit from opportunity, or to offer resilience amidst market uncertainty.
The Tobacco in Latvia report includes:
- Analysis of key supply-side and demand trends
- Detailed segmentation of international and local products
- Historic volume and value sizes, company and brand market shares
- Five year forecasts of market trends and market growth
- Robust and transparent research methodology, conducted in-country
This report answers:
- What is the market size of Tobacco in Latvia?
- Which are the leading brands in Tobacco in Latvia?
- How are products distributed in Tobacco in Latvia?
- Which category is the most heavily taxed in Latvia?
- How is the operating environment for Tobacco changing?
- What are the current legislative restrictions applicable to the sale of Tobacco products in Latvia?
- How has COVID-19 impacted demand?
- How have national lockdown and enforced home seclusion following COVID-19 impacted sales?
- Where is future growth expected to be most dynamic?
Tobacco in Latvia
Tobacco in 2024: The big picture
2024 key trends
Competitive landscape
Retail developments
What next for tobacco?
Legislation
Legislative overview
Minimum legal smoking age
Smoking prevalence
Tar levels
Health warnings
Plain packaging
Advertising and sponsorship
Point-of-sale display bans
Smoking in public places
Low ignition propensity (LIP) cigarette regulation
Flavoured tobacco product ban
Reduced harm
Vapour products
PRODUCTION/IMPORTS/EXPORTS
DISCLAIMER
Cigarettes in Latvia
KEY DATA FINDINGS
Cigarette sales in Latvia continue to decline, in face of shifts in consumer behaviour and mounting regulatory pressures
PMI adapts to market shifts with value-focused portfolio and flexible pricing
Modern grocery retailers dominate sales
Cigarettes market faces decline amid shift to affordable and perceived reduced-risk products
Cross-border trade and counterfeit production will challenge Latvia’s legal tobacco market
Industry will innovate in readiness for regulatory change
Taxation rates
Average cigarette pack price breakdown
Cigars, Cigarillos and Smoking Tobacco in Latvia
KEY DATA FINDINGS
Cigars and cigarillos continues to decline, while fine cut tobacco shows greater resilience as consumers seek more affordable alternatives
Market remains highly consolidated
Offline retail remains dominant
Cigars and cigarillos will decline further while smoking tobacco will benefit from its value-for-money positioning
Cultural disconnect to limit growth of cigars and cigarillos
Innovation will remain limit, due to strict regulations
Smokeless Tobacco, E-Vapour Products and Heated Tobacco in Latvia
KEY DATA FINDINGS
Closed system single-use e-vapour products lead growth
Overall market remains dominated by key players, but fragmentation persists in open e-vapour systems and e-liquids
Shift towards mainstream grocery retailers
Heated tobacco will lead growth as e-vapour products face sluggish performance, due to regulatory constraints
Lativa moves towards stricter regulation of non-combustible products
Innovation will remain key driver of growth, although players will need to align with regulatory requirements
The following categories and subcategories are included:
Tobacco
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- Fine Cut Cigarettes
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- Cigarettes (Illicit+Legal)
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- Cigars
- Cigarillos
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- Pipe Tobacco
- Fine Cut Tobacco
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- Chewing Tobacco
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- Loose US-Style Moist Snuff
- Portion US-Style Moist Snuff
- Swedish-Style Snus
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- Closed System Single Use
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- Closed System Rechargeable (including starter kits)
- Closed System Cartridges
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- Open Vaping Systems Charging and Vapourising Devices
- E-liquids
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- Tobacco Heating Devices
- Heated Tobacco
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- Nicotine Pouches
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- Closed System Single Use (Illicit+Legal)
- Closed System Cartridges (Illicit+Legal)
- E-Liquids (Illicit+Legal)
Tobacco
Passport Tobacco covers the seven major tobacco categories: Cigarettes, Cigars & Cigarillos, Smoking tobacco (made up of Pipe tobacco and RYO tobacco), Smokeless Tobacco (snuff and chewing tobacco), E-Vapour Products (closed and open); Heated Tobacco; and Tobacco Free Oral Nicotine. Smoking paraphernalia such as pipes, rolling papers, lighters or matches, etc., are not included, nor are nicotine replacement therapy (NRT) products, which are part of Euromonitor's Passport Consumer Healthcare database.
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This report originates from Passport, our Tobacco research and analysis database.
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