Tobacco Industry Supports Bulgaria Efforts to End Cigarette Black Market

The world’s largest cigarette companies – Philip Morris International (PMI), British American Tobacco (BAT), Imperial Tobacco and Japan Tobacco International together with Bulgarian biggest national tobacconist Bulgartabac Holding, have supported Bulgarian government in increasing efforts to crack down black market of illicit tobacco products.

Cigarette Black Market

The representatives of PMI Bulgaria, BAT Bulgaria, JTI Bulgaria, Bulgartabac and Imperial Tobacco Bulgaria have taken part in a meeting with Bulgarian vice Prime Minister Tsvetan Tsvetanov, who also serves as Minister of Internal Affairs, and expressed their support of the government’s efforts to put an end to the black market in contraband cigarettes that flourishes in the country.

The unofficial alliance of the largest cigarette makers has the only purpose to back Bulgarian government efforts in the struggle against illegal cigarette market and encourage society to stand up against this matter, the companies declared. They are set to launch several meetings with the responsible officials from Bulgarian Customs Service and Ministry of Interior.

It was mentioned during the meeting with Bulgarian vice Prime Minister, Bulgaria is one of the leading nations across the European Union in terms of illegal cigarette trade, with nearly 1 out of 3 cigarettes smoked in the country being smuggled into the country without being subject to excise and VAT taxes.

As a result, although excise tax on tobacco products was increased earlier in 2010, official information provided by the Ministry of Finance demonstrates that the loss of revenues solely from unpaid cigarette taxes will reach BGN 700 million.

In accordance with the recent market survey carried out in 21 cities across Bulgaria in the late May 2010, the sales non-domestic tobacco products have doubled since 2009, reaching the rate of 34%.

Moreover, in several large cities, such as Ruse, Varna and Shumen the sales of illegal cigarettes have grown from 3 to 8 times versus last year, whereas in smaller cities illegal cigarettes make up almost half of the total market.

The representatives of the leading cigarettes companies in the Bulgarian cigarette market have declared they are committed to back Bulgarian government in the efforts against illegal cigarette market by launching awareness campaigns for retailers and smokers, initiating technical trainings for police and customs agents, sharing latest market data related to non-domestic incidence, carrying out market analysis on the tendencies of the illegal market on a regular basis and providing quality expertise to the Bulgarian officials.

The set of measures contained means for maintaining long term cigarette tax stability, stringent and rapid enforcement of current laws, hefty fines and prison terms for individuals and organizations involved in illegal cigarette sales, the establishment of a work group to promote more efficient and thorough legislative base, and proposed to consider the issue of illegal cigarette market to the list the major government priorities for 2011.

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