The full ban on smoking in public places that came into law in Bulgaria in June 2012 has led to a decline in cigarette sales by three to four per cent, although it is too early to assess the long-term effects, according to Sofia-based thinktank Industry Watch.
The introduction of the full ban led to public protests by restaurateurs, bar owners and hoteliers who said that their custom was hard hit by the ban. Attempts to amend the law to revert to the previous system of separate smoking and non-smoking areas in restaurants and pubs failed.
Industry Watch said that in recent years there had been significant changes in the tobacco market.
The average effective rate of excise duty on cigarettes increased about 4.6 times in the period from 2005 to 2013 year. From late 2004 to date, the average price of cigarettes had increased by 3.3 times.
However, compared to 2008, Bulgaria was collecting only seven per cent more revenue in a twofold increase in excise duties for the period.
Market liberalisation eliminated the differential tax treatment of domestic and imported cigarettes. This removed some market advantage of cheaper local brands in the market where there is already significant presence of global brands, Industry Watch said.
According to Industry Watch, the impact of higher excise duty was proportionately much more on cheaper cigarettes and the effect on more expensive cigarettes was generally weaker. Industry Watch said that in other European Union countries where smoking bans had been introduced, cigarette sales fell by four to 11 per cent in the months immediately after the restriction took effect.
(Photo: Vjeran Lisjak/sxc.hu)