1.1. Tobacco Consumption

Cigarette consumption

It is very hard to estimate tobacco consumption in Ukraine because Ukrainian statistical bodies collected this data before 1994, and only in money terms. Since 1994, the statistical figures of tobacco sales are available, but they represent only a part of the tobacco market, since so-called legal consumption (production + Import - export) is much higher (see Table 1.1).

In 1985-1991, about 65-75 billion cigarettes were sold in Ukraine (See Table 1.2). However, actual consumption was higher, since part of the cigarettes were not sold, but supplied to army soldiers. It is possible to estimate total consumption in late 1980s as up to 80 billion cigarettes per year, i.e. 2000 cigarettes per adult 15 years of age and over.

Table 1.2. Cigarette market in Ukraine in 1985-1991 (in billion cigarettes)

* Since all tobacco factories were state-owned, part of the cigarettes were not sold at the market but given to the army and other groups.

According to the Tobacco Reporter (July, 1996) “manufacturers estimate that Ukrainians consumed 60 to 65 billion pieces in 1995, including domestic production, import, and smuggled cigarettes.” Representatives of the Reemtsma Company in Ukraine also estimated that the tobacco consumption in Ukraine was rather low.

The researchers of the International Center For Policy Studies estimated that the consumption of cigarettes in 1999 was 70 billion (32 billion filter ones and 38 billion non-filter ones). Some representatives of the tobacco industry purport that cigarette consumption is 75 billion or more, but they do that to exaggerate the smuggling problem (see Chapter 4). According to «Ukrainian tobacco» Association estimates (submitted to the WHO), the overall market has declined from 80 billion cigarettes in 1990 to 65-70 billion cigarettes in 1999. According to the national survey of June 2001 (see Chapter 3), the total cigarette consumption was 67.4 billion cigarettes. In 2001 the so-called legal consumption (production – export + import) was 68 billion cigarettes (Table 1.1). Real consumption could be higher due to some cigarette smuggling into Ukraine (mainly from Russia), however, some of the cigarettes that are legally sold in Ukraine are then smuggled to other countries (see Chapter 4).

We could reasonably suggest that in recent years, the annual consumption of cigarettes in Ukraine is about 65-70 billion pieces or 1600-1700 cigarettes per adult 15 years of age and over.

Another issue the estimation of non-filter cigarettes in the real market. In 1985-1991, the proportion of filter cigarettes was 38% (Table 1.2). In 1995-1997, about 40 billion non-filter cigarettes were produced in Ukraine annually. Some of them were exported, and there was almost no import or smuggling of non-filter cigarettes. Annual consumption could be estimated at 35-40 billion. The annual consumption of filter cigarettes was about 25-30 billion. Since 1996, the excise tax on non-filter cigarettes increased twice each year, and since 1998, most of the time the tax was equal for both types of cigarettes (see Chapter 2). The prices for the cheapest filter cigarettes became almost equal to non-filter cigarettes and some smokers switched to filter cigarettes. Younger smokers, who replace those smokers who died or quit, also prefer filter cigarettes. These are the two main reasons that the consumption non-filter cigarettes has decreased. In 1998, 31 billion non-filter cigarettes were produced, and some of them where exported. However, the smuggling of these cigarettes from Russia and Moldova (due to a big tax difference) was registered. In 1999, 2000, and 2001, respectively 21, 12,5, and 15 billion non-filter cigarettes were produced in Ukraine. (Fig 1.1). Only very small amount was exported. The production of filter cigarettes in 1998, 1999, 2000 and 2001 was respectively 28, 33, 46 and 54 billion pieces.

In year 1999, the consumption of filter cigarettes was estimated at = 33 (production) + 3 (import) - 5 (export) + 3 (smuggling?) = 34 billion pieces. The consumption of non-filter cigarettes was estimated as 21 (production) + 10 (smuggling?) = 31 billion pieces. The proportion of non-filter cigarettes in 1999 could be estimated at 53%. Other experts gave the same proportion (while estimates of the market volume are different). In the year 2000, the consumption of filter cigarettes was = 46 (production) + 2 (import) - 7 (export) + 3 (smuggling?) = 44 billion pieces. The consumption of non-filter cigarettes was 13 (production) + 10(smuggling?) = 23 billion pieces. Certainly we are not able to estimate the exact volume of smuggled cigarettes, but it is certain that in 2000 this volume did not increase (since the legal consumption of all types of cigarettes increased by 2,4 billion pieces). All of the estimates of the amount of smuggled non-filter cigarettes in 2000 was less than 50%, and according to our calculations, it was 34%. According to the national survey of June, 2001 (see Chapter 3), 33% of smokers smoke cigarettes with a pack price of less than 1 hryvna (that usually means non-filter cigarettes).

The consumption of other tobacco products

Papyrosy, a special kind of Russian cigarettes, have become less popular. In 1995, 2,025 million papyrosy were produced in Ukraine. In 1996, 1998, and 2000, the papyrosy production was respectively 314, 209, and 93 million pieces. Some marijuana users buy papyrosy just to use the tube for cannabis.

According to the national survey in June 2001, 1 to 2% of smokers smoke roll-your-own cigarettes or mahorka (a special kind of tobacco plant).

The consumption of cigars and cigarillos is almost negligible. In 1999-2000, about 1 million cigars and cigarillos were imported to Ukraine, which means that the annual consumption was 0,02 per inhabitant. In 1997-1998 even less cigars (about 200,000 annually) were imported. There were expensive cigars from America (mainly Cuba) and cheap ones from Europe (mainly Spain, Netherlands, UK and Germany). The consumption of cigars was only about 0,01% of the general tobacco consumption, but some experts believe that many more cigars are smuggled than imported legally.

Smokeless tobacco is practically not used in Ukraine.