According to daily Pravo, cigarette consumption in CR came at 23.45bn pieces in 2006 which is almost the same as year before, when the consumption came at 23.5bn pieces. This implies annual consumption of 2,289 sticks per person, in comparison to 2,296 in 2005 and 2,243 in 2004.
Our view:
Consumption in 2006 came only 1.5% lower than our expectation of 23.8bn in 2006. Although the official consumption of PMCR’s products in CR will be announced only in annual report published after AGM, which is expected in May, we expect based on previous indications from the management that their market share has stabilized at the level over 60% the PMCR’s consumption reached 14.4-14.5bn pieces in 2006. Although the consumtion came slighly below our expcation, we see the news in general positively as it proves that consumption per person is stable even when prices are increasing due to excise tax hikes.