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Although tobacco products have become more than 10 percent more expensive in 2020, it doesn’t seem like people are quitting smoking in large amounts. What is particularly worrying is that the demand for cheaper and lower-quality cigars is the fastest growing, and that cigarettes and fine-cut tobacco are stagnating.
In the first 9 months of 2020, people bought tobacco products worth HUF 631.3 billion from national tobacco stores, which is 11.4 percent more than the previous year, while prices increased by a 10.8 percent average, according to CSO data.
A difference of 0.6 percent can mean a quantitative increase or a rearrangement between individual products. The latter is confirmed by the NAV data series on excise goods in free circulation. Based on this, the traffic needs 8 to 8.2 billion cigarettes a year, and that’s roughly what the market was two years ago.
A fine cut tobacco there is a demand of about 4,300 tons per year, which was even closer to 5 tons two years ago, but in 2020 the market stabilized.
Price increases will arrive in 2021
However, you can see a clear increase in for cigarswhich is not good news as there are many cheap and poor quality products among them. In the 12 months to November 2020, more than 700 million were in circulation, up from just over 600 million a year ago. This amount is, of course, an order of magnitude less than the number of cigarettes consumed, but it is a good indication that many do not put down a cigarette, but instead turn to cheaper alternatives.
That’s electronic cigarette, whose filling fluid is also affected by excise duties and excise duties. Of this amount, between 12 and 19 million milliliters are needed at home each year. In addition to the electronic cigarette it is called heated tobacco products although a large market has not yet been opened among national consumers.
In recent years, cigarettes have been one of the fastest growing products, in part due to the raising of excise duties to the EU minimum. This was compounded by the transformation of the tobacco retail system and the emergence of trafficking. However, until now it did not seem that the masses had stopped smoking, but had paid the highest purchase price.
Excise duties on cigarettes, cut tobacco, cigars, and e-cigarette fillers are also unlikely to increase in two stages from January 1 to April 1 of this year.
In the case of cigarettes, Hungary can pay off a long overdue debt to the European Union, as Hungary has been the only country that has not met the minimum tax requirements for some time. For this reason, proceedings against Hungary have already been initiated.
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