Cigarette black market reaches 16 percent in H1

Newsroom 17/08/2011 | 12:02

The cigarette black market increased to 15.7 percent in June, up from 12 percent in the previous month, according to data from Novel Research Company.

The historic high in cigarette smuggling hit 36.2 percent in January 2010, due to a massive increase in excise tax on tobacco products. Since then, the illegal cigarette trade went on a decreasing trend, reducing to 22.5 percent in January 2011, and further to 11.5 percent in March 2011. This decrease in cigarette smuggling was obtained with joint efforts from state authorities and tobacco industry representatives.

Gilda Lazar, Corporate Affairs & Communications director at JTI Romania, argues that restructuring and wage reduction processes in the law enforcement institutions, that have to dismantle the criminal groups, may contribute to the rising trend in cigarette smuggling. She adds that increasing prices for tobacco products may also see consumers opting for cheaper tobacco products on the black market.
According to Adrian Popa, CORA Director at BAT Romania, every percent that is recovered from the cigarette smuggling market becomes a surplus of EUR 30 million for the state budget.

The tobacco industry has contributed EUR 2.5 billion to Romania’s consolidated budget in 2010. The key players in this industry are JTI Romania, BAT Romania and Philip Morris Romania.