Bulgarian cigarette market shrinks ‘because of contraband’

Written by on June 11, 2013 in Business - No comments

The legal cigarette market in Bulgaria decreased by a further 10 per cent in April and May 2013 compared to the same months of 2012, going by tobacco company figures – but this does not mean that people are smoking less but that contraband cigarette sales have made gains.

There had been a downturn in the legal cigarette market in Bulgaria since the beginning of 2013, daily Trud said, quoting tobacco company sales figures.

Cigarette sales by former monopoly Bulgartabac in January to March 2013 showed a four per cent downturn year-on-year.

Sales of standard-size cigarettes were on the decrease and the proportion of sales of “slims” was increasing.

Nikolai Mihailov of tobacco company JTI said that the most recent study on the illegal cigarette trade, in November 2012, showed a trend of increasing illegal trade in cigarettes in 14 major cities in Bulgaria, from 15.3 per cent to 18 per cent.

Bulgartabac said that since the beginning of 2013, the price of contraband cigarettes had begun to fall, making them more attractive for low-income people.

This trend comes against a backdrop of rising unemployment and decreasing spending power among Bulgarians.

The contraband cigarette trade in Bulgaria increased sharply in 2010 when the then-government increased excises on cigarettes to above the European Union average, raising the rate at the time from 102.3 leva a 1000 cigarettes to 148 leva.

However, by 2019 the lowest excise rate on cigarettes in the EU should be the equivalent of 176 leva. Tobacco company Philip Morris said that Bulgaria should phase in its increases to avoid stimulating sales of contraband cigarettes.

 

(Photo: Leah Sawyer)

 

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