Poland Market Survey Report Empty Discarded Pack Collection August 2018 Conducted on behalf: British American Tobacco Imperial Tobacco Group Japan Tobacco International Philip Morris International Prepared by: Institute for Consulting and Market Research ul. Swietokrzyska 31/33a 00-049 Warszawa, Poland 1
Survey Methodology Empty Discarded Pack (EDP) collection Random collection from streets and public bins Any brand and market variant Total 70 cities (40 largest cities and 30 smaller towns) Target main sample: 17,000 packs City sample quotas proportional to population Fieldwork conducted 8 27.08.2018 Limitations Homes and workplaces are not covered No information on counterfeit incidence of non- products Caution The survey is designed to focus on trends rather than incidence at a single point in time 2
Sampling Plan Russia Lithuania Gdynia Suwalki Gdansk Braniewo Lidzbark Warminski Olecko Gryfice Koszalin Pomorskie Tczew Starogard Gdanski Elblag Warmiòsko-Mazurskie Warmińsko-Mazurskie Olsztyn Elk Podlaskie Sokolka Germany Zachodniopomorskie Szczecin Stargard Szczecinski Pila Chodziez Gorzow Wielkopolski Oborniki Szamotuly Miedzyrzecz Poznan Lubuskie Wielkopolskie Czech Republic Grudziadz Lomza Ostroleka Zlotow Zielona Gora Leszno Kalisz Ostrow Wielkopolski Glogow Bogatynia Kujawsko-Pomorskie Torun Bydgoszcz Inowroclaw Wloclawek Plock Gniezno Kutno Lodzkie Poland Zgierz Lodz Pabianice Mazowieckie Sokolow Podlaski Legionowo Siedlce Warszawa Pruszkow Malopolskie Bielsko-Biala Nowy Sacz Bialystok Biala Podlaska Konin Radzyn Podlaski Milanowek Lubelskie Kozienice Pulawy Radom Lublin Chelm Krasnystaw Skarzysko-Kamienna Lubin Starachowice Dolnoslaskie Ostrowiec Swietokrzyski Radomsko Zamosc Legnica Swietokrzy skie Wroclaw Namyslow Zlotoryja Kielce Stalowa Wola Czestochowa Opolskie Jedrzejow Staszow Nisko Tarnobrzeg Jelenia Gora Swidnica Slaskie Walbrzych Opole Mielec Zawiercie Strzelce Opolskie Tarnowskie Gory Krapkowice Piekary Slaskie Lancut Przeworsk Kedzierzyn-Kozle Gliwice Bytom Dabrowa Gornicza Siemianowice Zabrze Bedzin Ropczyce Chorzow Slaskie Sosnowiec Ruda Swietochlowice Slaska Katowice Tarnow Rzeszow Tychy Myslowice Jaworzno Krakow Przemysl Raciborz Rybnik Zory Wodzislaw Slaski Jaslo Stupsk Lask Tomaszow Mazowiecki Piotrkow Trybunalski Belchatow Podkarpackie Belarus Hrubieszow Ukraine Slovakia 3
All Packs Collected Incidence of Non-domestic Packs Non-Domestic 11,4% Includes 2,4% of Domestic 88,6% N= 341,842 weighted sticks 4
All Packs Collected Non-domestic Packs Incidence Evolution 100% 90% Includes 2,5% of Includes 1,6% of Includes 3,1% of Includes 2,2% of Includes 1,1% of Includes 2,8% of 18,2% 17,2% 16,4% 14,3% 13,8% 15,7% Includes 1,8% of Includes 1,9% of 12,7% 12,3% 11,4% Includes 2,4% of 80% 70% 60% 50% 40% 81,8% 82,8% 83,6% 85,7% 86,2% 84,3% 87,3% 87,7% 88,6% 30% 20% 10% 0% Q4 2015 Q2 2016 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017 Q2 2018 Q3 2018 N= 343,423 N= 342,488 N= 342,494 N= 342,366 N= 342,198 N= 341,886 N= 342,261 Figures are given in weighted sticks. Domestic Packs Non-domestic Packs N= 342,251 N= 341,842 5
Incidence of Non-domestic Packs by Nielsen Region Poland national incidence of non-domestic packs: 11.4% 6,6% 28,1% Q.4. 2015 Warsaw 27.8% Central 23.9% East 43.3% North 7.0% South 16.1% South-East 16.0% South-West 7.4% West 2.4% Q.2. 2016 Warsaw 26.8% Central 21.2% East 44.3% North 6.6% South 16.3% South-East 11.3% South-West 6.1% West 1.9% 2,6% 7,4% Warsaw 12,3%* 11,7% Q.4. 2017 Warsaw 21.6% Central 16.6% East 24.2% North 6.1% South 11.8% South-East 7.4% South-West 8.6% West 2.9% 16,5%* 5,6% Q.2. 2018 Warsaw 17.1% Central 19.6% East 25.7% North 7.1% South 10.3% South-East 6.9% South-West 8.3% West 3.2% Q.3. 2016 Warsaw 25.4% Central 21.8% East 41.3% North 5.5% South 12.7% South-East 15.2% South-West 7.5% West 2.7% Q.2. 2017 Warsaw 19.9% Central 19.8% East 33.5% North 5.4% South 9.5% South-East 13.1% South-West 9.6% West 2.7% Q.4. 2016 Warsaw 21.9% Central 17.4% East 33.6% North 6.0% South 10.6% South-East 18.3% South-West 4.5% West 3.0% Q.3. 2017 Warsaw 25.6% Central 23.9% East 33.2% North 5.2% South 14.7% South-East 11.1% South-West 6.5% West 3.1% 6 All data: calculated in cigarettes (single) weighted by localization populations and smoking incidence
Incidence of Non-domestic Packs by City Largest 40 cities Poland national incidence of non-domestic packs: 11.4% N= 341,842 weighted sticks Koszalin (5,3%) Gdynia (6,1%) Gdańsk (7,2%) Elbląg (34,0%) Olsztyn (35,9%) Small Towns Szczecin (6,2%) Gorzów Wielkopolski (9,3%) Zielona Góra (6,8%) Legnica (8,0%) Wałbrzych (9,3%) Poznań (0,8%) Wrocław (8,0%) Bydgoszcz (5,4%) Opole (2,0%) Ruda Śląska (24,2%) Toruń (10,2%) Kalisz (0,0%) Grudziądz (6,8%) Włocławek (5,3%) Łódź (16,8%) Częstochowa (18,5%) Zabrze (10,4%) Rybnik Gliwice (8,6%) (5,8%) Katowice (7,6%) Sosnowiec Chorzow (10,2%) (8,0%) Tychy (14,7%) Bytom (11,4%) Bielsko Biała (11,9%) Płock (12,0%) Dąbrowa Górnicza (11,3%) Kraków (2,3%) Warszawa (12,3%) Tarnów (2,7%) Radom (20,2%) Kielce (5,3%) Rzeszów (18,0%) Białystok (36,6%) Lublin (13,7%) REGION CITY INCIDENCE East Sokółka 47,4% Braniewo 57,1% Lidzbark Warmiński 72,6% Krasnystaw 2,0% Hrubieszów 5,3% Olecko 35,2% Radzyń Podlaski 6,7% South-East Nisko 21,3% Jasło 5,3% Ropczyce 2,0% Przeworsk 9,3% Łańcut 23,3% Jędrzejów 11,9% Staszów 2,7% Central Radomsko 14,6% Łask 20,6% Milanówek 5,9% Kozienice 10,0% Sokołów Podlaski 11,3% West Międzyrzecz 8,0% Złotów 0,0% Oborniki 0,7% Szamotuły 0,7% Chodzież 0,7% South-West Złotoryja 7,3% Strzelce Opolskie 4,7% Krapkowice 2,0% Bogatynia 11,9% Namysłów 9,9% North Gryfice 7,3% 7
Incidence of Non-domestic Packs Comparison of Results in Large Cities Vs. Results in Smaller Towns 100,0% 90,0% 80,0% 70,0% 60,0% 11,4% 11,3% 14,3% N= 341,842 weighted sticks 50,0% 40,0% 30,0% 20,0% 10,0% 88,6% 88,7% 85,7% Non-domestic Domestic 0,0% 70 cities (40 largest cities + 30 smaller towns) Largest 40 cities 95,2% out of total 100% sample 30 smaller towns 4,8% out of total 100% sample N= 341,842 N= 325,326 N= 16,516 8
Szczeci n G r yf ice Stargard Szczecinski G orzow Wi el kopol ski Bogat ynia M iedzyr zecz Zielona Gora Jelenia Gora Koszal i n Zlot or yja G logow Lubin Legni ca Wal brzych Pila Szam ot uly Leszno Poznan Swidnica Chodziez O bor niki Zlot ow Wrocl aw G niezno G dyni a Bydgoszcz G dansk O st r ow Wielkopolski Nam yslow Starogard Gdanski I nowr oclaw Kal i sz Konin O pol e Kr apkowice Tczew G rudzi adz Torun Strzelce Opolskie Kedzier zyn- Kozle Racibor z Wl ocl aw ek Rybni k Wodzislaw Slaski El bl ag Kut no Tarnowskie Gory Czest ochow a Lodz Belchat ow Pl ock Dabrowa Gornicza Byt om Bedzin G l i wzabrze i ce Siemianowice Slaskie Chorzow Swiet ochlowice Sosnow i ec Ruda Slaska Kat ow i ce Zor y Lask Br aniewo Piekary Slaskie Zgier z Pabianice M yslowice Jawor zno Tychy Bi el sko- Bi al a Radom sko Piot r kow Tr ybunalski Zawier cie Lidzbark Warminski O l szt yn St upsk Tom aszow M azowiecki Krakow Pr uszkow Jedr zejow M ilanowek Legionowo Skar zysko- Kam ienna Ki el ce O st r oleka Warszaw a Radom St ar achowice Nowy Sacz Tarnow Lom za Elk Ostrowiec Swietokrzyski St aszow O lecko Kozienice M ielec Sokolow Podlaski Pulawy Tar nobr zeg Ropczyce Jaslo Siedlce Suwalki Stalowa Wola Rzeszow Bi al yst ok Radzyn Podlaski Nisko Lubl i n Lancut Sokolka Biala Podlaska Pr zewor sk Kr asnyst aw Pr zem ysl Zam osc Chelm Hr ubieszow Non-domestic Incidence by Voivodship Russia Lithuania Pomorskie Warmiòsko-Mazurskie Zachodniopomorskie 6.8% 38.0% Podlaskie 37.2% 6.1% Kujawsko-Pomorskie Belarus 6.8% Mazowieckie 13.0% Germany Lubuskie 8.0% Wielkopolskie 0.7% Lodzkie 12.3% Poland 16.7% Warsaw Lubelskie 12.4% >30% >15% <30% Czech Republic Dolnoslaskie 8.2% Opolskie 3.0% Slaskie 11.7% Swietokrzy skie Malopolskie 2.3% 5.6% Podkarpackie 15.5% Ukraine >2% <15% < 2% Slovakia (*): Mazowieckie including Warsaw N= 341,842 weighted sticks 9
Non-domestic Incidence by Voivodship N= 341,842 weighted sticks (*): Mazowieckie including Warsaw 10
Non-domestic Incidence by Voivodship N= 341,842 weighted sticks (*): Mazowieckie including Warsaw >30% >15% <30% >2% <15% < 2% 11
Szczeci n G r yf ice Stargard Szczecinski G orzow Wi el kopol ski Bogat ynia M iedzyr zecz Zielona Gora Jelenia Gora Koszal i n Zlot or yja G logow Lubin Legni ca Wal brzych Pila Szam ot uly Leszno Poznan Swidnica Chodziez O bor niki Zlot ow Wrocl aw G niezno G dyni a Bydgoszcz G dansk O st r ow Wielkopolski Nam yslow Starogard Gdanski I nowr oclaw Kal i sz Konin O pol e Kr apkowice Tczew G rudzi adz Torun Strzelce Opolskie Kedzier zyn- Kozle Racibor z Wl ocl aw ek Rybni k Wodzislaw Slaski El bl ag Kut no Tarnowskie Gory Czest ochow a Lodz Pl ock Dabrowa Gornicza Byt om Bedzin G l i wzabrze i ce Siemianowice Slaskie Chorzow Swiet ochlowice Sosnow i ec Ruda Slaska Kat ow i ce Zor y Lask Br aniewo Piekary Slaskie Zgier z Pabianice Belchat ow M yslowice Jawor zno Tychy Bi el sko- Bi al a Radom sko Piot r kow Tr ybunalski Zawier cie Lidzbark Warminski O l szt yn St upsk Tom aszow M azowiecki Krakow Pr uszkow Jedr zejow M ilanowek Legionowo Skar zysko- Kam ienna Ki el ce O st r oleka Warszaw a Radom St ar achowice Nowy Sacz Tarnow Lom za Elk Ostrowiec Swietokrzyski St aszow O lecko Kozienice M ielec Sokolow Podlaski Pulawy Tar nobr zeg Ropczyce Jaslo Siedlce Suwalki Stalowa Wola Rzeszow Bi al yst ok Radzyn Podlaski Nisko Lubl i n Lancut Sokolka Biala Podlaska Pr zewor sk Kr asnyst aw Pr zem ysl Zam osc Chelm Hr ubieszow non-domestic incidence 11,4% includes 2.4% of counterfeit CF Incidence by Voivodship Russia Lithuania Zachodniopomorskie Pomorskie 1.4% Warmińsko-Mazurskie Warmiòsko-Mazurskie 0.1% Podlaskie 1.2% Kujawsko-Pomorskie 0.0% Belarus 3.2% Mazowieckie Germany Lubuskie 2.6% Wielkopolskie 0.0% Dolnoslaskie 3.9% Lodzkie Poland 5.3% Swietokrzy skie Lubelskie 3.1% 2.0% Opolskie Slaskie 0.5% >30% >15% <30% Czech Republic 0.2% 2.6% Malopolskie 0.3% Podkarpackie 1.1% Ukraine >2% <15% < 2% Slovakia (*): Mazowieckie including Warsaw N= 341,842 weighted sticks 12