Poland Market Survey Report Empty Discarded Pack Collection August 2013 Conducted on behalf: British American Tobacco Imperial Tobacco Group Japan Tobacco International Philip Morris International Prepared by: ALMARES Institute for Consulting and Market Research ul. Swietokrzyska 31/33a 00-049 Warszawa, Poland 1
Survey Objectives Provide an indication on the incidence of non-domestic or illicit cigarettes Tax paid and non tax paid cigarettes from other countries Counterfeit cigarettes Gain information related to non-domestic or illicit cigarettes by Companies Regions and Cities Brand families Market variants 2
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 - 1.08.-26.08.2013 Limitations Homes and workplaces are not covered No information on counterfeit incidence of non-participating companies products Caution The survey is designed to focus on trends rather than incidence at a single point in time 3
Sampling Plan Russia Lithuania Gdynia Gdansk Braniewo Lidzbark Warminski Olecko Suwalki Gryfice Koszalin Pomorskie Tczew Starogard Gdanski Elblag Warmiòsko-Mazurskie Olsztyn Elk Podlaskie Sokolka Germany Zachodniopomorskie Szczecin Stargard Szczecinski Gorzow Wielkopolski Miedzyrzecz Lubuskie Wielkopolskie Czech Republic Bialystok Grudziadz Lomza Ostroleka Zlotow Stupsk Zielona Gora Leszno Kalisz Ostrow Wielkopolski Glogow Lubin Legnica Zlotoryja Pila Chodziez Oborniki Szamotuly Poznan Bogatynia Jelenia Gora Swidnica Walbrzych Dolnoslaskie Kujawsko-Pomorskie Torun Bydgoszcz Inowroclaw Wloclawek Plock Gniezno Kutno Konin Wroclaw Namyslow Opolskie Slaskie Lodzkie Poland Zgierz Lodz Pabianice Lask Tomaszow Mazowiecki Opole Zawiercie Strzelce Opolskie Tarnowskie Gory Krapkowice Piekary Slaskie Kedzierzyn-Kozle Gliwice Bytom Dabrowa Gornicza Siemianowice Zabrze Bedzin Chorzow Slaskie Sosnowiec Ruda Swietochlowice Slaska Katowice Tychy Myslowice Jaworzno Krakow Raciborz Rybnik Zory Wodzislaw Slaski Mazowieckie Sokolow Podlaski Legionowo Siedlce Biala Podlaska Warszawa Pruszkow Milanowek Piotrkow Trybunalski Belchatow Skarzysko-Kamienna Starachowice Ostrowiec Swietokrzyski Radomsko Swietokrzy skie Kielce Stalowa Wola Czestochowa Jedrzejow Staszow Nisko Tarnobrzeg Malopolskie Bielsko-Biala Nowy Sacz Kozienice Pulawy Radom Lublin Lubelskie Mielec Lancut Przeworsk Ropczyce Tarnow Rzeszow Przemysl Jaslo Radzyn Podlaski Podkarpackie Belarus Chelm Warsaw Krasnystaw Hrubieszow Zamosc Ukraine Slovakia 4
All Packs Collected Incidence of Non-domestic Packs Non-domestic 14,0% Includes 2,6% of counterfeit of participating companies Domestic 86,0% N= 346,044 weighted sticks 8
Non-domestic Packs Share by Market Variant National Sample RUSSIA 9,0% UNSPECIFIED 1,5% GERMANY 1,7% OTHERS 3,0% Domestic 86,0% Non-domestic 14,0% UKRAINE 12,4% BELARUS 47,2% List of "Others" DUTY FREE 25,2% Market Variant Share CANARY ISLANDS 0,8% MOLDOVA 0,3% UNITED KINGDOM 0,2% CZECH REPUBLIC 0,2% FRANCE 0,2% DENMARK 0,2% KAZAKHSTAN 0,2% others (less than 0,2%) 0,9% Total 3,0% N = 48,533 weighted sticks 10
Incidence of Non-domestic Packs by Nielsen Region Poland national incidence of non-domestic packs: 14.0% 2,3 % 5,2% 8,0% Warsaw 20,3%* 19,9%* 12,1% 36,5% Q.2. 2012 Warsaw 21.9% Central 23.3% East 39.4% North 6.5% South 11.1% South-East 10.3% South-West 3.6% West 1.3% Q.4. 2012 Warsaw 20.6% Central 24.6% East 27.4% North 4.9% South 9.9% South-East 14.5% South-West 3.9% West 0.9% Q.3. 2012 Warsaw 24.7% Central 23.5% East 31.7% North 4.3% South 12.0% South-East 13.1% South-West 5.2% West 2.3% Q.2. 2013 Warsaw 24.2% Central 21.6% East 45.4% North 4.4% South 10.2% South-East 10.1% South-West 7.8% West 2.4% 10,1% 18
Incidence of Non-domestic Packs Comparison of Results in Large Cities Vs. Results in Smaller Towns 100,0% 90,0% 80,0% 70,0% N= 346,044 weighted sticks 60,0% 50,0% 86,0% 86,2% 82,2% Domestic 40,0% Non-domestic 30,0% 20,0% 10,0% 0,0% 14,0% 13,8% 70 cities (40 largest cities + 30 smaller towns) Largest 40 cities 95,2% out of total 100% sample 17,8% 30 smaller towns 4,8% out of total 100% sample N= 346,044 N= 329,446 N= 16,598 19
Incidence of Non-domestic Packs by City Largest 40 cities Poland national incidence of non-domestic packs: 14.0% N= 346,044 weighted sticks Szczecin (4,6%) Gorzów Wielkopolski (3,3%) Zielona Góra (1,9%) Legnica (5,9%) Koszalin (4,0%) Wałbrzych (7,4%) Poznań (1,8%) Wrocław (5,2%) Gdynia (2,5%) Gdańsk (2,0%) Bydgoszcz (14,7%) Opole (2,6%) Toruń (18,4%) Kalisz (3,2%) Ruda Śląska (20,8%) Elbląg (39,1%) Grudziądz (10,5%) Włocławek (19,1%) Bielsko Biała (3,9%) Łódź (20,5%) Częstochowa (12,1%) Zabrze (8,9%) Rybnik Gliwice (3,3%) (6,1%) Katowice (9,3%) Sosnowiec Chorzow (11,1%) Bytom (11,7%) Tychy (8,8%) (7,8%) Płock (16,9%) Dąbrowa Górnicza (21,2%) Kraków (11,8%) Olsztyn (34,9%) Warszawa (20,3%) Radom (20,5%) Kielce (3,5%) Tarnów (10,6%) Rzeszów (18,8%) Białystok (43,1%) Lublin (30,5%) Small Towns REGION CITY INCIDENCE East Braniewo 25,8% Lidzbark Warmiński 23,1% Sokółka 60,3% Olecko 47,3% Hrubieszów 39,7% Krasnystaw 34,6% Radzyń Podlaski 30,2% South-East Przeworsk 22,6% Łańcut 25,1% Ropczyce 21,9% Staszów 7,2% Nisko 44,6% Jasło 10,7% Jędrzejów 9,3% Central Kozienice 17,7% Sokołów Podlaski 20,3% Łask 13,8% Milanówek 28,5% Radomsko 15,7% West Międzyrzecz 7,2% Chodzież 3,1% Oborniki 2,6% Szamotuły 2,6% Złotów 1,9% South-West Strzelce Opolskie 3,3% Złotoryja 3,2% Krapkowice 7,9% Bogatynia 6,5% Namysłów 1,9% North Gryfice 1,9% 20
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 ALMARES Non-domestic Incidence by Voivodship Russia Lithuania Pomorskie Warmiòsko-Mazurskie Zachodniopomorskie 2.2% 36.0% Podlaskie 44.2% 4.4% Kujawsko-Pomorskie Belarus 15.8% Mazowieckie 20.1% Germany Lubuskie 2.9% Wielkopolskie 2.1% Lodzkie Poland 20.3% 20.0% Warsaw Lubelskie 31.1% >30% >15% <30% Czech Republic Dolnoslaskie 5.6% Opolskie 3,1% Slaskie 10.1% Swietokrzy skie Malopolskie 11.7% 4.2% Podkarpackie 19.9% Ukraine >2% <15% < 2% Slovakia (*): Mazowieckie including Warsaw N= 346,044 weighted sticks 21
Non-domestic Incidence by Voivodship N= 346,044 weighted sticks Q2 2012 Q3 2012 Q4 2012 Q2 2013 Q3 2013 WARSAW 21,9% 24,7% 20,6% 24,2% 20,3% Voivodships DOLNOSLASKIE 3,9% 5,5% 4,3% 7,9% 5,6% KUJAWSKO-POMORSKIE 10,9% 7,2% 7,0% 8,5% 15,8% LODZKIE 22,6% 24,0% 26,9% 22,8% 20,0% LUBELSKIE 26,4% 28,1% 19,6% 30,5% 31,1% LUBUSKIE 3,9% 6,9% 1,4% 4,5% 2,9% MALOPOLSKIE 5,8% 10,8% 7,8% 8,7% 11,7% MAZOWIECKIE 22,4% 24,3% 20,5% 23,2% 20,1% OPOLSKIE 2,3% 3,6% 1,8% 7,2% 3,1% PODKARPACKIE 31,3% 26,9% 43,3% 21,5% 19,9% PODLASKIE 52,2% 35,6% 38,1% 49,4% 44,2% POMORSKIE 3,7% 2,6% 3,7% 0,3% 2,2% SLASKIE 11,1% 12,0% 9,9% 10,2% 10,1% SWIETOKRZYSKIE 2,5% 5,1% 5,6% 1,7% 4,2% WARMINSKO-MAZURSKIE 42,7% 32,3% 26,8% 59,0% 36,0% WIELKOPOLSKIE 0,4% 0,6% 0,8% 1,7% 2,1% ZACHODNIOPOMORKSKIE 3,7% 2,3% 3,6% 4,0% 4,4% Total Poland 14,5% 14,5% 13,2% 15,1% 14,0% (*): Mazowieckie including Warsaw 22
Non-domestic Incidence by Voivodship Q2 2012 Q3 2012 Q4 2012 Q2 2013 Q3 2013 WARSAW 21,9% 24,7% 20,6% 24,2% 20,3% Voivodships DOLNOSLASKIE 3,9% 5,5% 4,3% 7,9% 5,6% KUJAWSKO-POMORSKIE 10,9% 7,2% 7,0% 8,5% 15,8% LODZKIE 22,6% 24,0% 26,9% 22,8% 20,0% LUBELSKIE 26,4% 28,1% 19,6% 30,5% 31,1% LUBUSKIE 3,9% 6,9% 1,4% 4,5% 2,9% MALOPOLSKIE 5,8% 10,8% 7,8% 8,7% 11,7% MAZOWIECKIE 22,4% 24,3% 20,5% 23,2% 20,1% OPOLSKIE 2,3% 3,6% 1,8% 7,2% 3,1% PODKARPACKIE 31,3% 26,9% 43,3% 21,5% 19,9% PODLASKIE 52,2% 35,6% 38,1% 49,4% 44,2% POMORSKIE 3,7% 2,6% 3,7% 0,3% 2,2% SLASKIE 11,1% 12,0% 9,9% 10,2% 10,1% SWIETOKRZYSKIE 2,5% 5,1% 5,6% 1,7% 4,2% WARMINSKO-MAZURSKIE 42,7% 32,3% 26,8% 59,0% 36,0% WIELKOPOLSKIE 0,4% 0,6% 0,8% 1,7% 2,1% ZACHODNIOPOMORKSKIE 3,7% 2,3% 3,6% 4,0% 4,4% Total Poland 14,5% 14,5% 13,2% 15,1% 14,0% (*): Mazowieckie including Warsaw >30% >15% <30% >2% <15% < 2% N= 346,044 weighted sticks 23
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 14,0% includes 2.6% of counterfeit ALMARES CF Incidence by Voivodship Russia Lithuania Pomorskie Warmiòsko-Mazurskie Zachodniopomorskie 0.0% 0.3% Podlaskie 0.5% Kujawsko-Pomorskie 0.6% Belarus 1.5% Mazowieckie Germany Lubuskie 0.0% Wielkopolskie 1.0% Dolnoslaskie 5.7% Lodzkie Poland 3.6% Swietokrzy skie Lubelskie 6.0% 1.5% Opolskie Slaskie 0.9% >30% >15% <30% Czech Republic 0.4% 1.6% Malopolskie 2.9% Podkarpackie 10.6% Ukraine >2% <15% < 2% Slovakia (*): Mazowieckie including Warsaw N= 346,044 weighted sticks 24