Cigarette smuggling drops below 13 percent this July

The level of the local black market for cigarettes has dropped for the first time this year in July, reaching 12.9 percent of the total market, according to recent Novel Research market report. By comparison, the black market amounted to 13.3 percent in May, 13.4 percent in March and 13 percent in January.

“Among the trends we have noticed this July there is a decrease of cigarettes smuggled from Ukraine (down 7 percent on May and totaling 17.7 percent) and a significant increase of cigarette smuggling with duty free products (up 5.7 percent on May, to 23.2 percent). Other trends we have seen in May have become even stronger. Thus, Serbia remains the main source of smuggled cigarettes, 32 percent of the smuggled cigarettes coming from this country, up 2.9 percent in July against May. Also, the share of products having Moldavian fiscal stamps remains on a downward trend,” said Marian Marcu, general director of Novel Research.

The 0.4 percent decrease reported by the black market in July against May is the first drop reported this year, bringing it below the psychological level of 13 percent said Gilda Lazar, corporate affairs & communications director at JTI Romania and Moldova. “It is a positive result especially when considering that even in the present political context, the authorities have continued their concerted efforts to reduce cigarette smuggling and made this a priority,” she explained.

According to Adrian Popa, corporate & regulatory affairs at BAT Romania, each percentage point drop in cigarette smuggling means a EUR 30 million revenue increase for the state budget.

The authorities must continue their efforts to reduce cigarette smuggling so that its level should go below 10 percent, thinks Sorana Mantho, corporate affairs director at Philip Morris Romania and Bulgaria. This can be done by improving existing laws and allocating the necessary funds to the authorities involved in fighting cigarette smuggling.

In 2011 the three main cigarette manufacturers in Romania – JTI Romania, BAT Romania and Philip Morris Romania – have generated some EUR 2.75 million to the state budget in the form of excise duties and VAT.

Simona Bazavan