Tobacco Companies Back Bulgaria in Crackdown on Cigarette Black Market

Bulgarian Interior head Tsvetanov has gotten backing from leading tobacco companies to fight the black market of cigarettes. Photo by BGNES

Leading international companies - Philip Morris, Bulgartabac Holding, British American Tobacco, Japan Tobacco International and Imperial Tobacco have expressed their commitment to back the efforts of the Bulgarian Interior to beat down illicit cigarette trade.

The general managers of Philip Morris Bulgaria, Bulgartabac Holding, British American Tobacco Bulgaria, Japan Tobacco International Bulgaria and Imperial Tobacco Bulgaria have met with Deputy Prime Minister and Minister of Interior Tsvetan Tsvetanov to vow that they backed the government's actions against the cigarette black market.

The informal alliance of the leading cigarette companies has the sole objective to support government efforts in the fight against illicit cigarette trade and mobilize society against this issue, the companies announced. They are initiating a series of meetings with the responsible authorities in Bulgaria.

As highlighted during the meeting, Bulgaria is among the top EU countries in terms of illicit cigarette consumption, with approximately 1 out of 3 cigarettes coming from the black market without generating the equivalent excise and VAT taxes.

As a result, despite the big excise increase on cigarettes in 2010, official data of the Ministry of Finance indicates that the loss of revenues only from unpaid excise will be BGN 700 M.

According to the latest market survey conducted in 21 cities in Bulgaria during the second half of May 2010, the non-domestic incidence has doubled since last year, reaching the level of 34%.

In some cities like Pazardjik, Ruse, Varna, Shumen the illicit incidence has increased from 3 to 8 times, compared to last year, while in smaller cities, such as Kyustendil and Pernik, more than half of the cigarette market is illegal.

Philip Morris Bulgaria, Bulgartabac Holding, British American Tobacco Bulgaria, Japan Tobacco International Bulgaria and Imperial Tobacco Bulgaria, have expressed their commitment to support the government in the fight against illicit trade by implementing awareness campaigns to the trade and to the general public, providing technical trainings to customs and police officers, exchanging up-to-date market information regarding non-domestic incidence, conducting market surveys on the trends of the non-domestic incidence on a regular basis and offering expertise to the Bulgarian authorities.

The tobacco companies also shared with the Minister Tzvetan Tzventanov a comprehensive set of measures that are considered essential in curbing the serious issue of illicit trade.

These include measures for ensuring long term excise tax stability on cigarettes, strict and quick enforcement of existing legislation, high sanctions and imprisonment for those involved in illicit cigarette trade, the creation of a work group to pursue more effective and comprehensive legislative measures, a mechanism for better coordination among all law enforcement authorities and a proposal to include the issue of illicit cigarette trade among the top government priorities for next year.

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