1.2. Tobacco expenditures of the population 

The official statistical data on tobacco expenditures from household disposable income are presented in Table 1.3. However, the official tobacco expenditures are rather underestimated. If the average person in 2000 spent only 35,1 UAH on tobacco, the total market would be just 1,750 million UAH or 320 million $US, while tobacco industry experts estimate that it is from 600 to 1,500 million $US (Business newspaper, N 10, 2000).

Table 1.3. Household annual cash disposable income and tobacco expenditures

We have tried to estimate population expenditures on legal tobacco products using the statistical data on prices and sales (Table 1.4). In 2000 the expenditures were 3,627 million UAH or 666 million dollars.

Table 1.4. Legal cigarette market estimations

The International Center of Political Studies estimates that the illegal cigarette market turnover was 700 million UAH. Thus, the total cigarette market in 2000 was about 4,300 million UAH or 800 million $US. According to the national survey in June 2001 (see Chapter 3), the total cigarette market amount was 4,130 million UAH or 780 million $US.

The total market in dollar value seems rather stable seeing as how the legal market amount depends upon the illegal market amount. In 1996, the smuggling volume was estimated as 25 billion cigarettes, mainly expensive international brands. In 1998, the incidence of smuggling was very low, and in 1999-2000, the smuggling of cheap cigarettes from Russia and Moldova dominated.