Romanian Govt. approves new structure of tobacco excise duty, sending cigarettes prices up

The price of a pack of cigarettes in Romania will increase by 15 to 20 Romanian bani starting July 1, 2012. The price rise is due to an increase in excise duty, from EUR 76.6 per 1,000 cigarettes to EUR 79.19 per 1,000 cigarettes, as set out in the calendar to align excise duties on tobacco, which runs up to 2017. The new structure of the tobacco excise duty was approved in the Government’s session on Tuesday ( April 3 ). As a result, starting July, the specific excise - part of the total excise duty, will be EUR 58.18 per 1,000 cigarettes, which will lead to a total rate of excise duty of EUR 79.19 per 1,000 cigarettes. The average weighted retail price for 2011 is EUR 130.07 per 1,000 cigarettes, which translates as RON 11.18 per pack of cigarettes. From July 1, 2012, the minimum excise duty will be EUR 76.5 per 1,000 cigarettes, EUR 2.5 over the currently level of EUR 74 per 1,000 cigarettes. According to a recent survey issued by the Romanian Health Ministry, some 4.85 million Romanians smoke on either a daily basis or occasionally, spending an average of RON 273 (or EUR 62) every month on cigarettes, translating as some EUR 300 million spent every month on cigarettes. The Romanian cigarette market is shared by the three international companies – British American Tobacco, Philip Morris, and JTI, which contributed some EUR 2.75 billion to the general consolidated budget in excise and VAT in 2011. Irina Popescu, irina.popescu@romania-insider.com (photo source: Photoxpress.com)