Cigarette smuggling almost flat but Romania still loses EUR 400 mln from 13.4% contraband

Cigarette smuggling was flat during the first three months of this year, compared to the same period of last year, reaching 13.4 percent of the Romanian cigarettes market in March this year, according to a study from Novel Research. The smuggling level in March this year was 1.4 percentage points smaller than in March last year.

“The level of tobacco smuggling is relatively constant, reaching 13.4 percent of the total consumption in Romania. […] There is a worrying increase in Bucharest, up 5.8 percentage points in smuggling in March this year, compared to January, reaching 13.5 percent,” according to Marian Iancu, director of Novel Research. In other areas of the country, cigarette smuggling however dropped – in the South – West region, it was down 5.1 percentage points, to 8 percent in March compared to January this year. Most counterfeit cigarettes came from Ukraine – 27 percent, the Republic of Moldova – 26.2 percent, Serbia – 20.8 percent and the duty free network, with 18.7 percent of the smuggled products. Cigarette producers noticed an improvement in cigarette smuggling in the last two years, when it halved, due to the “strategic approach of this phenomenon, joint efforts from authorities, an improved and simpler legislative framework, and the close collaboration between the state institution and the tobacco industry,” according to Gilda Lazar, director Corporate Affairs & Communications with JTI România and the Republic of Moldova. Tobacco producers want an even steeper decline in smuggling. “At this point, 13.4 percent smuggling rate means a loss of EUR 400 million for the state budget. We are worried about the so-called illicit whites – cheap filter cigarettes – in the European space, which enter through Greece and cross Bulgaria and Romania, to reach Spain and UK,” said Adrian Popa, director Corporate & Regulatory Affairs with BAT România. The tobacco industry is one of the largest contributors to Romania's state budget. In 2011, JTI, BAT and Philip Morris paid EUR 2.7 billion in excises and VAT to the state budget. editor@romania-insider.com