Market evolution: Manufactured tobacco and substitutes (CN 2403) — 2015–2025

Introduction

This report analyses the trade dynamics of the European Union in manufactured tobacco and substitutes (Combined Nomenclature code 2403) over the 2015–2025 period. The product category encompasses smoking tobacco, homogenised or reconstituted tobacco, chewing tobacco, snuff, tobacco extracts, and essences, excluding cigars, cigarettes (2402) and newer nicotine products for inhalation without combustion (2404). The EU has evolved from a modest net importer to a dominant net exporter within this market, with its trade structure, partners, and product composition undergoing significant shifts.

1. The EU’s Dramatic Shift from Net Importer to Net Exporter

The most striking trend over the decade is the EU’s transformation in the global manufactured tobacco trade, marked by robust export growth and declining imports, culminating in a vastly expanded trade surplus.

1.1 Exports Surged While Imports Contracted

EU export value for CN 2403 grew by 110.6%, rising from €806 million in 2015 to €1.70 billion in 2025. This growth was supported by a 41.3% increase in export volume (from 80,791 tonnes to 114,184 tonnes) and a 49.0% rise in average unit price. In contrast, EU imports experienced a 17.7% decline in value over the same period, falling from €159 million to €131 million, accompanied by a 29.6% drop in quantity. View the overall trade figures here.

1.2 The Trade Balance Improved Dramatically

As a result of divergent trends in exports and imports, the EU’s trade surplus in this sector ballooned. The balance in value terms increased by 142.1%, from €647 million in 2015 to a substantial €1.57 billion in 2025. This shift underlines the EU’s strengthened competitive position and its role as a net supplier of manufactured tobacco products to non-EU markets.

1.3 Production Growth Fueled Export Capacity

The surge in exports is underpinned by a significant expansion in EU domestic production. Production value more than doubled, increasing by 133.8% from €1.26 billion to €2.95 billion, while production volume grew by 36.4% from 150,000 to 204,618 thousand kilograms. This indicates increased investment in manufacturing capacity for export-oriented production. Explore production volumes here.

2. Geographical Reorientation of Trade Partnerships

The EU’s trade geography has been redrawn, with major changes in both its import sources and export destinations, leading to greater diversification on the export side and reduced concentration on the import side.

2.1 The United Kingdom’s Role Collapsed Post-Brexit

The most pronounced change on the import side was the near-disappearance of the United Kingdom as a source. The UK’s share of EU imports plummeted from €94.8 million in 2015 to just €0.82 million in 2025 (a 99.1% decline). This structural break is directly linked to Brexit, which moved the UK from an intra-EU to an extra-EU trading partner and likely altered trade flows and reporting. See the evolution of partners by value.

2.2 Exports Diversified Towards Türkiye, Switzerland, and New Markets

EU exports showed strong growth to several key partners. Türkiye became the top destination, with exports rising from €94.4 million to €192.4 million (+103.7%). Significant growth was also recorded for Switzerland (+139.6%) and the Islamic Republic of Iran (+1032.9%). While traditional partners like Algeria and Japan remained important, their growth was more moderate or even negative, indicating a geographical reorientation. Ukraine also emerged as a fast-growing market, with exports increasing from €1.9 million to €36.8 million.

2.3 Supply Concentration Decreased for Both Flows

The Herfindahl-Hirschman Index (HHI) for import concentration fell by 51.4%, from 3,797 to 1,847, reflecting reduced reliance on a few dominant suppliers following the UK’s exit. Export concentration also decreased by 33.3%, indicating a diversification of customer markets across more countries. Analyze concentration metrics.

3. Segment Volatility and the Rise of High-Value Extracts

A granular look at the product segments within CN 2403 reveals divergent performance, with smoking tobacco maintaining volume dominance while other manufactured products (like extracts) showed extreme value volatility.

3.1 Smoking Tobacco (240319) is the Workhorse of EU Exports

For exports, smoking tobacco consistently accounted for the largest share in both volume and value. In 2025, it represented 50,304 tonnes (44% of export volume) and €889 million (52% of export value). Its value grew steadily, with unit prices increasing by nearly 19% over the period, suggesting premiumisation or inflation.

3.2 Other Manufactured Tobacco (240399) Exhibited Extreme Price-Driven Volatility

This segment, which includes chewing tobacco, snuff, extracts, and essences, experienced dramatic swings. Its export value peaked at €2.54 billion in 2021 before falling back to €676 million in 2025. This was primarily driven by extreme price volatility; the unit price ranged from €15,010/tonne (2023) to €38,751/tonne (2020), a coefficient of variation indicating highly unstable trade, potentially linked to one-off large shipments of high-value extracts. Compare product segments in detail.

3.3 Water-Pipe Tobacco (240311) Trade is Marginal but Growing from a Low Base

Trade in water-pipe tobacco (hookah/shisha) remains a very small part of the total. However, its export value grew from €1.4 million in 2015 to €15.6 million in 2025, indicating a niche but expanding market. Import quantities for this product also declined, mirroring the broader import trend.

Conclusion

Between 2015 and 2025, the EU manufactured tobacco market (CN 2403) underwent a profound transformation. The bloc consolidated its position as a major global exporter, driven by production growth and the diversification of its export markets. The UK’s exit from the single market precipitated a collapse in the EU’s tobacco imports from that country, reducing import concentration. While smoking tobacco remains the core export product by value, the volatile trade in high-value extracts underscores the segment’s sensitivity to specific shipments and pricing. Overall, the data paints a picture of an industry that has significantly strengthened its external trade balance, albeit with notable volatility in certain product lines.