Romania May Lose Up To EUR1 Billion Because Of Cigarette Smuggling

According to a survey by Novel Research, smuggled cigarettes have come to account for 36% of the total Romanian cigarette market in the first two months of the year, from 22% in the last quarter of 2009. "A market share of over 36% for contraband cigarettes means one in three cigarettes smoked in Romania comes from illicit trade. If contraband was market leader in 2009 by profit, now it is also leader by volume," Adrian Popa, corporate affairs manager with British American Tobacco, said on Tuesday.

 

Popa estimates the government will lose an estimated EUR1 billion in taxes and excises because of contraband cigarettes, as cigarette producers expect smuggled products to reach 50% of the total market by the end of the year.

 

The top three cigarette producers on the Romanian market, Japan Tobacco International (JTI), Philip Morris Romania (PM) and British American Tobacco (BAT), have seen declines in sales in the first two months of 2010.