The decline in the tobacco market in Ukraine accelerated to 16.5% in the fourth quarter of 2025 from 15.0% in the third quarter, according to the annual report of Philip Morris International (PMI). According to the report, the Ukrainian market lost 10.6% in real terms over the year as a whole, while the European market as a whole lost 3.5%.
This decline was caused by a 5% drop in cigarette sales, while sales of heated tobacco products (HTU) continued to grow.
In the European region, a significant drop in sales in the fourth quarter of last year was also recorded in Poland (15.4%) and, to a lesser extent, in France (9.4%), but this was partially offset by sales growth in Bulgaria (8.3%), Germany (1.7%), and Serbia (6.4%).
Overall, Philip Morris managed to increase its global sales by 1.4% last year, thanks to a 12.8% increase in sales of smokeless products, including an 11.0% increase in HTU sales, while cigarette sales fell by 1.5%.
As a result, the company’s net revenue grew by 7.3% to $40.6 billion, including smokeless products, which grew by 15% to $16.9 billion.
The report notes that in 2025, Ukraine accounted for about 2% of total cigarette and HTU shipments, as well as about 1% of total net revenue.
“In Ukraine, it is impossible to predict when and to what extent we will be able to fully normalize our operations, as well as to what extent our personnel, facilities, inventories, and other assets will remain intact,” the document also states.
As of December 31, 2025, PMI’s total assets in Ukraine amounted to approximately $0.7 billion, excluding intercompany balances.
As reported, in 2024, Philip Morris Ukraine opened a new factory in the Lviv region, investing $30 million in its launch. The company’s Kharkiv factory has been suspended since February 24, 2022.
Philip Morris Ukraine (PMU) has been operating in the Ukrainian market since 1994. On January 30, 2026, the company reported a Russian missile strike that damaged part of the company’s Kharkiv factory.
According to data from YouControl, in the first nine months of 2025, Philip Morris Ukraine’s revenue decreased by 13.3% to UAH 14.23 billion.
The Supreme Court of Ukraine (SCU) has ruled that hookahs in restaurants are a promotion of tobacco products, and therefore hookahs are absolutely prohibited in restaurants, regardless of their composition.
In this way, the Ukrainian judiciary has defended the right of citizens to health in order to strengthen the fight against the tobacco epidemic.
Since 2012, advertising and promotion of tobacco products, including hookah tobacco, have been banned in Ukraine. Despite this, unscrupulous business entities provided hookah services, which by definition is a form of advertising and promotion of tobacco sales.
The Supreme Court of Ukraine, having considered the cassation appeals of the Main Department of the State Service of Ukraine on Food Safety and Consumer Protection in Kyiv in cases No. 320/29317/23 and No. 320/23655/23, issued decisions confirming the legality of the imposition of financial sanctions by the State Service of Ukraine on Food Safety and Consumer Protection on business entities for stimulating the sale of tobacco products by providing hookah services, which are violations of Article 16 of Law 2899-IV.
The Supreme Court notes: “The provision of hookah services by an establishment should be considered as a promotion of tobacco products and tobacco use, even if there is no direct advertising of the product.”
In addition, it is prohibited to place information about hookah services on the menu: “The placement of information about tobacco products or related services in the menu of a restaurant establishment or on posters falls under the prohibition of advertising and promotion of tobacco products, trademarks for goods and services.”
Thus, restaurant establishments are not allowed to provide hookah services at all. Theposting of information about tobacco products and items related to their use is prohibited (except for one poster no larger than 40×30 cm per point of sale, which provides textual information printed in black on a white background about tobacco products available for sale and their prices).
The above positions of the Supreme Court are fully consistent with international standards, in particular the WHO Framework Convention on Tobacco Control, the WHO FCTC Guidelines and Directive 2014/40/EU, which prohibit any advertising of tobacco products, including hookah tobacco and hookah accessories.
The Law No. 2899-IV stipulates that violation of Article 16 is punishable by a fine of UAH 30 thousand, and in case of repeated violation within a year – UAH 50 thousand for each fact of advertising on a separate advertising medium or each separate event to promote the sale of tobacco products.
“The decision of the Supreme Court is extremely important as it confirms that the actions of the State Service of Ukraine on Food Safety and Consumer Protection in preventing advertising and promotion of tobacco products through hookahs are in line with the law. Thus, we see in action that the health of citizens is a priority for the state and it is able to defend it,” emphasized Dmytro Kupyra, executive director of the NGO ‘Life’.
Hookah smoking is dangerous for the health of both smokers and people around them, as hookah smoke contains a high concentration of toxic substances and carcinogens. The World Health Organization emphasizes: 1 hour of hookah smoking can be equal in terms of smoke exposure to a hundred cigarettes smoked. During a hookah session, a smoker takes about 200 puffs, inhaling 30-40 times more smoke than when smoking cigarettes.
Prolonged inhalation of secondary hookah smoke can cause dizziness, carbon monoxide poisoning, and later asthma, coronary heart disease, stroke, and even lung, esophageal, and stomach cancer.
WHO surveys show that 2.6% of Ukrainians are hookah smokers, with this share concentrated in the youngest age group of 18-29 years old.
In 2024, Ukraine managed to reduce the volume of the shadow tobacco market to 12.6% from 25.7%, Danylo Hetmantsev, Chairman of the Verkhovna Rada Committee on Finance, Taxation and Customs Policy, said on Telegram.
“Thanks to joint work with law enforcement and tax authorities, we managed to reduce the volume of the shadow tobacco market from 25.7% to 12.6%,” he wrote.
Hetmantsev added that in June-December 2024, importers and manufacturers of tobacco products paid UAH 16.1 billion more in excise tax to the budget (+33.7%) than in the same period in 2023.
In June-October, manufacturers produced 2 billion more cigarettes than in the same period of 2023.
In addition, the development of the e-liquids market resulted in a 30-fold increase in the volume of ordered excise stamps in the third quarter compared to the first quarter of 2024.
As reported, in December 2024, the Verkhovna Rada adopted Bill No. 11090 on the revision of excise tax rates on tobacco products. The document provides for an equivalent increase in specific excise tax rates on cigarettes for tobacco, industrial tobacco substitutes and a reduction in their amount for tobacco-containing products for electric heating, as well as clarification of certain provisions of the administration of excise tax on tobacco products.
MP Yaroslav Zheleznyak (Holos faction) said that the adopted document was not signed by the President of Ukraine and was not published on the parliament’s website, which calls into question the revision of tobacco prices from January 1, 2025.
The European Business Association (EBA), the American Chamber of Commerce in Ukraine (AmCham) and the Association of Tobacco Manufacturers “Ukrtobacco” have appealed to the Verkhovna Rada to support in the second reading the draft law No. 11090 on increasing the excise tax on tobacco products as proposed by the Cabinet of Ministers.
“It is necessary to provide for the EU’s approach to determining a single euro to hryvnia exchange rate throughout the year (as of October 1 of the previous year for the entire next year) in order to ensure business planning for enterprises that are the largest taxpayers in Ukraine, which, according to the official opinion to the draft law and relevant letters, is insisted on by both the Rada Committee on Ukraine’s Integration into the EU and the Government Office for Coordination of European and Euro-Atlantic Integration of the Cabinet of Ministers,” the second version of the draft law reads on the EBA website.
The associations are confident that the initiatives of some Ukrainian MPs to introduce conceptual changes to the decision already adopted in the first reading to change the excise tax rates on tobacco products pose significant risks to the State Budget of Ukraine. These proposals could provoke a galloping growth of the illegal cigarette market, which has been reduced with extraordinary efforts for several months, taking into account the recommendations of the G7 countries and the leadership of the Chairman of the Parliamentary Financial Committee Danylo Hetmantsev.
The most critical and risky initiatives, according to the member companies, are the proposals to establish an ad valorem excise tax on tobacco products at 25% and to compare the tax rate for cigarettes and electrically heated tobacco products (EHT).
It is emphasized that such an initiative does not comply with the European approach and the practice of EU member states.
“Please take into account the position of the united business community when making the final decision on the revision of excise tax rates on tobacco products as part of the further consideration and adoption of Draft Law 11090,” the association summarized.
Earlier, the Union of Ukrainian Entrepreneurs (UUE) and the U.S.-Ukraine Business Council (USUBC) called for the adoption of the draft law on tobacco excise taxes in the version of the Cabinet of Ministers.
As reported, on June 4, the Verkhovna Rada supported in the first reading and adopted as a basis the draft law No. 11090 on increasing the excise tax on tobacco products.
The draft law provides for the conversion of excise tax rates on tobacco products from hryvnia to euros, reaching the EU minimum excise tax level on cigarettes (EUR90 per 1000 cigarettes) through a gradual increase in specific excise tax rates by 2028, returning to the differentiation of excise tax on HTPs and cigarettes, and introducing a special mechanism for calculating excise tax on tobacco products based on the exchange rate.
According to the estimates of the Ministry of Finance described in the draft Budget Declaration, this will increase state budget revenues by UAH 0.6 billion in 2025, by UAH 5 billion in 2026, by UAH 9.4 billion in 2027 and by UAH 13.9 billion in 2028.
The working group under the Verkhovna Rada Committee on Finance, Tax and Customs Policy considered the bill on increasing excise duties on tobacco, which is preparing for consideration by Parliament in the second reading, said the head of the parliamentary committee Daniil Getmantsev.
“The bill is unambiguously timely and will be supported by the Verkhovna Rada. At the same time there are issues that should be considered in the second reading. Realized by the deputies in the hall. Among them the schedule for increasing excise tax rates, their size on certain items and increase in ad valorem rate,” – he wrote in Telegram on Monday.
In addition, according to Getmantsev, there are several other technical issues to the text of the bill to increase excise taxes on tobacco products. The deputies intend to find consensus on them at the level of the parliamentary committee.
Getmantsev also said that the bill adopted in 2020 on the introduction of excise tax on tobacco-containing products for electric heating (TIEN) helped the state to get to date 22.5 billion UAH.
“A good result”, – summarized the head of the Finance Committee.
As reported, the European Business Association strongly opposes the amendments to the Tax Code of Ukraine on revision of excise tax rates on tobacco products (draft law No. 11090), which is being considered in connection with the requirements of the EU Council Directive on the structure and rates of excise taxes applicable to tobacco products.
The revision of excise tax rates on tobacco products already from July 1, 2024 is not in line with the principle of stability of tax legislation, the EBA argued.
The experts drew attention to the fact that the excise tax rates on tobacco products are scheduled to increase by 20% annually for 2024-2027. However, the draft law No. 11090 proposes to increase these rates unevenly. For example, it is proposed to increase the excise tax rate on cigarettes in 2025 by almost 23.5%, and in 2026 and 2027 – by about 5% annually. According to business representatives, such an approach would have a shock effect on the market in 2025.
Meanwhile, member companies support a differentiated schedule of excise tax rate increases for cigarettes and tobacco products for electronic heating with an electronically controlled heater over 2024-2027.
On March 12, the NGO “Life” together with researchers from the Kyiv International Institute of Sociology (KIIS) presented the results of the all-Ukrainian survey “Use of Tobacco and Nicotine Products and Attitudes Towards Anti-Tobacco Measures” conducted in November-December 2023 as part of the regular Omnibus.
According to the survey, 30% of the population in Ukraine currently use tobacco or nicotine products: 43% of men and 20% of women. Daily smokers account for 24.5% of Ukrainians (36% of men, 15% of women).
Surveys show that consumption of tobacco products in Ukraine was actively declining until 2017. However, after the introduction of aggressive advertising of heating tobacco products, e-cigarettes and nicotine products, consumption of tobacco products in Ukraine has not decreased for 7 years. If we look at the structure of smoking, the consumption of tobacco and nicotine products among Ukrainian women has doubled in 7 years. According to the GATS survey, in 2017, 7% of Ukrainian women were daily tobacco users and 1% of e-cigarettes users, and today this figure is 15%. Tobacco and nicotine use is most widespread among young women aged 18-29 years – 37%, of whom 28.4% use it daily and 8.4% use it occasionally. This means that one in three young women is currently addicted to nicotine.
Among daily users, 79% smoke manufactured cigarettes. This is followed by electrically heated tobacco products (18%) and e-cigarettes (14%). The use of HTPs and e-cigarettes is more common among younger respondents: 37% of young people aged 18-29 use electrically heated tobacco products, and 36% use e-cigarettes. Women are more likely than men to use electrically heated tobacco products (27% vs. 13%) and e-cigarettes (25% vs. 11%).
“The survey results demonstrate a clear correlation between the answers of respondents who were most exposed to tobacco and nicotine advertising and the prevalence of use of these products among the youngest population group. Also, for the first time, we observe parity between tobacco and nicotine users among men and women in the 18-29 age group, but while the indicators for men remain stable, there has been a significant increase for the female population,” said Oleksandr Shcherbatiuk, researcher, project coordinator at the Kyiv International Institute of Sociology.
The survey showed that it is the young population that notices tobacco and nicotine advertising the most – 73% of young people aged 18-29. Further, this figure decreases with each age group and falls to 19% among respondents aged 70 and older. This confirms that tobacco and nicotine advertising is aimed at the youngest age group of men and women.
Display of tobacco and nicotine products in points of sale is the main channel for advertising these products – 32% of respondents said they notice it. Banner ads on the Internet (23%) and personal pages on social media (20%) are in second place. Outdoor advertising was seen by 14%. Most often, respondents saw ads for traditional and heated cigarettes (35%), 31% saw ads for tobacco heating devices, 24% saw ads for e-cigarettes, and 10% saw ads for nicotine snus.
“The tobacco industry is bringing back the tobacco epidemic among young people. Tobacco companies’ marketing preys on young women and men. The health of the population and, above all, children and youth is a matter of national security for the restoration of Ukraine’s human capital. Public support for anti-tobacco regulations of up to 80% is a guideline for the Verkhovna Rada of Ukraine to protect Ukrainians from tobacco and nicotine,” said Dmytro Kupyra, Executive Director of the NGO “Life”.
Most Ukrainians support anti-tobacco measures to prevent young people from starting to use tobacco.
The vast majority of respondents support the ban on advertising of brands of electronic smoking devices and e-cigarettes (79%) and the ban on the visible placement of tobacco packs in retail outlets (77%). Two-thirds of respondents support a ban on flavored tobacco products (67%) and tax increases to reduce the affordability of tobacco products for children (65%). The introduction of standardized packaging is supported by 61% of respondents.
“At the end of 2021, the Verkhovna Rada of Ukraine adopted the Anti-Tobacco Law 1978-IX, which implemented the key provisions of European Integration Directive 2014/40/EU. We can already see the results of the adopted changes with the appearance of updated health warnings on cigarette packs. Despite these efforts, the tobacco industry continues to attract young people. With the absolute support of citizens, we will propose to the Parliament the following package of proposals to protect the health of children and youth from illicit tobacco and nicotine products. First of all, it is necessary to eliminate all forms of advertising, including the visible placement of tobacco and nicotine products in points of sale, and to ban flavoring (fruit) additives that are not typical for tobacco products. Such steps are in line with the WHO Framework Convention on Tobacco Control and Ukraine’s European integration commitments,” said Lada Bulakh, MP, member of the Committee on National Health, Medical Assistance and Health Insurance.
The survey results revealed the key reasons for the spread of the tobacco and nicotine epidemic in Ukraine and demonstrated significant public support for the immediate implementation of legislative measures to protect the young population. Smoking in Ukraine is the cause of 130 thousand premature deaths annually from diseases such as heart attack, stroke, cancer and others.
