The cigarette black market in Romania went up to 15.4 percent in the first month of 2013, according to a study from Novel Research. Last year, cigarette smuggling remained at a steady level of around 13 percent of the total market.

Serbia remained the main source of illicit trading, with 31.2 percent of the total black market in January 2013, followed by Ukraine with over 25 percent and Moldavia with 22.2 percent, according to Marian Marcu, Novel Research Manager.

“Growth of the illicit trading with 2.2 percentage points accounts for almost EUR 100 million that went to the black market instead of the state budget. The main cause seems to be the increase of prices on the legal market due to the exchange rate’s influence on excise duty to be paid since January (5 percent higher compared to 2012), while the price of smuggled products remained unchanged,” according to Gilda Lazar, Corporate Affairs & Communications Manager at JTI Romania, Moldavia and Bulgaria.

“We declared last year that the objective the Romanian authorities should take into consideration is to be able to drop below the psychological step of 13 percent, and closer to the European cigarette smuggling level of 10 percent,” said Sorana Mantho, Corporate Affairs Manager, Philip Morris Romania and Bulgaria. She added that the increase in illicit trading recorded at the beginning of 2013 changes the downward trend of the last year, but this growth will hopefully be temporary.

According to the data provided by Dorel Fronea, head of the Romanian National Customs Authority, the institution’s mobile teams applied fines of some EUR 674,000 and confiscated goods worth EUR 348,000 during the inspections conducted in January 2013. “Romanian customs’ main priority is to fight against illicit cigarettes trading. Thus, important actions to combat this phenomenon will be conducted at a national level in the upcoming period, involving the whole structure of supervision and customs control, namely mobile teams, canine teams and scanning equipment,” added Fronea.

The tobacco industry ranks high on the list of main contributors to the Romanian state budget.  The cigarettes producers paid some EUR 3 billion to the state budget in 2012, representing excise duties and taxes. The amount accounts for around 2.7 percent of GDP, and an approximate 9 percent contribution to the total budget revenues.

Irina Popescu, irina.popescu@romania-insider.com