The domestic cigarette market is constantly undergoing a complete transformation, according to Telex. The anti-smoking zeitgeist which warns of health risks, has made an impact, as domestic consumption has fallen by a quarter in a decade, based on quantitative indicators.
In the past two decades, our accession to the European Union has also brought changes: in a duty-free world, there was no longer a need for so many local manufacturers, and in 2004 several large Hungarian factories closed down immediately. Then Hungary had to adjust to EU tax minima, which meant a 100% increase in consumer prices over eight years, even in a decade of low inflation. The regulation of tobacco shops has also completely rewritten the sector. Finally, in 2020, COVID led to a drop in tobacco shops in the capital and near the Austrian border (Sopron, for example), but the legal market in the east of the country grew by 50 percent, with some cities seeing a threefold increase in turnover. COVID has reduced traffic across the Ukrainian border, making smuggling more difficult.
Before the big brands appeared in Hungary, Hungarian products dominated the market. Today, there is only one Hungarian-owned company in the country, Continental. Because of the staggering taxes, the producer gets just over 10 percent of the final price of his product.
While the taxes coming from tobacco are a big amount of state revenue, the EU and the Hungarian state are pushing for a tightening of tobacco sales. It was already not possible to have any “positive” advertisement on products, it was not possible to write that they are additive-free, or to write the level of tar and nicotine in them- nothing to suggest that a product is less harmful. Product features such as vanilla or menthol-flavored have now been dropped as well.
And from January 1, 2022, brand attributes will disappear from tobacco products altogether.
Featured image: The quality of a tobacco producer’s baled crop is checked at the ULT Hungary Kft. purchasing center in Nyíregyháza, Hungary. Photo by Attila Balázs/MTI