Russia’s market falls sharply, suffers down-trading

Russia’s cigarette volume declined by 4.2 percent during the second quarter of this year, meaning that, during the first six months, volume was down by 6.5 percent, according to a story by Bob Bryan for Business Insider.

Bryan quoted Philip Morris International’s CFO, Jacek Olczak, as saying that his company now expected a full-year market decline toward the lower end of its 8-10 percent forecast range.

Russia has introduced some anti-tobacco measures in recent times but the fall in consumption is likely to have been boosted by the country’s economic woes.

This seems to be borne out by the fact that some consumers are down-trading to cheaper products.

“The economic environment remains fragile and we are witnessing some signs of down-tradings to the low price segment,” Olczak was quoted as saying. “I mean, the super low-price segments are losing, the low-price is gaining, and the premium is slightly losing. So yes you have a down-trading.”