Tobacco market in Georgia

This landscape study maps Georgia’s tobacco market across 2006-2024, covering production and trade, consumption volumes, price dynamics, tax structure, affordability, and fiscal outcomes. Using official series from the Ministry of Finance, Revenue Service, and National Statistics Office of Georgia, it reconstructs legal market size for cigarettes, heated tobacco products (HTPs), e-liquids and roll-your-own (RYO), as well as tracking policy shifts affecting demand. 
Consumption fell from a 2012 peak of 555m packs to 293m packs in 2023, largely as a consequence of excise increases and broader tobacco control measures (smoke-free laws, advertising bans, larger warnings). Since 2019, however, unchanged specific and ad valorem rates have eroded in real terms amid income growth and inflation, raising tobacco affordability. Market composition in 2023 is dominated by conventional cigarettes (80%); RYO accounts for 15% and HTPs 5%; e-cigarette use is expanding rapidly. An error correction model yields a long-run price elasticity of around -0.6 and income elasticity of 0.63-0.81, indicating that excise tax increases are an effective tool for reducing tobacco consumption, particularly when adjusted for inflation and income growth.