CTK informed about ACNielsen and BAT study on illicit cigarette products along Czech-German border which shows that this market place account for some 900m sold sticks out of which more than 80% is illicit products.
Our view:
The official market of cigarette products in Czech Republic accounted for some 23.5bn sticks in 2005. Czech-German border marketplace thus creates about 4% of the total volume. As the estimated market share of illegal cigarettes reaches c5-7% in the Czech Republic, mentioned border market place stands for almost half of it. Note that illegal products are still lower in comparison for example to Slovakia, where their share is estimated to over 20%. In early September this year, PMCR launched a campaign to limit this phenomenon at the border via distribution of 850k leaflets in German. We don’t expect any significant market reaction on this news.