The cigarette black market in Romania went down to 11.8 percent in July this year, from 12.6 percent the month before, according to a recent study conducted by research company Novel. In the last year and a half, the figure has maintained at around 13 percent of the total market.

In July this year, a significant drop in cigarette smuggling was recorded in the North West and the South West regions. However, “for the first time in five years, the North East (26 percent) becomes the region most affected by illegal trade, followed by the West (24.4 percent) and the North West (13.5 percent) regions,” according to Marian Marcu, Manager of Novel Research.

Ukraine and Moldova remain two of the main sources of smuggled cigarettes, amounting for 23.2 percent and 22.8 percent of the total. Serbia continued the downward trend, to 8.9 percent in July, from as high as 23 percent of the total smuggled cigarettes in 2012 and 10.7 percent in May this year.

“For the first time in our studies, we introduced the notion of “Cheap Whites”, representing cheap brands that don’t belong to the major manufacturers and are destined to the black market. These so called “Cheap Whites” hold the largest share of the black market, namely 34.9 percent,” said Marian Marcu.

In order to reduce the black market, clearer regulation of smuggling and tax evasion offenses is needed, according to tobacco manufacturers. Moreover, extra efforts at the border crossings with Hungary and Bulgaria are needed, such as assigning specific departments of the local police and gendarmerie.

The tobacco industry ranks high on the list of main contributors to the Romanian state budget.  Last year, the cigarette manufacturers paid over EUR 3 million to the state budget, representing excise duties and taxes. The amount accounts to some 2.7 percent of the GDP, and an approximate 10 percent contribution to the total budget revenues.

Irina Popescu, irina.popescu@romania-insider.com