BUCHAREST (Romania), March 9 (SeeNews) – Romania's cigarette black market expanded to 17.8% in January from 17.5% in November 2015, with the bulk of contraband cigarettes coming from the country's northern neighbour Ukraine, research company Novel said on Wednesday.
As much as 22.5% of all smuggled cigarettes originated in Ukraine, Novel head Marian Marcu said, as quoted in a press release. Inflows of illicit cigarettes from Moldova and Serbia remained steady at 15.8% and 1.2%, respectively, he added.
The so called "cheap whites" - foreign-sounding brand names made solely for the black market - accounted for 56% of all.
Illegal cigarettes had a 36.8% market share in the northeastern region, Marcu also said. In the northwestern and western regions their share dropped to 28.3% and 26.7%, respectively.
Cigarette smuggling is the most common violation at the northern and northeastern borders, Claudiu Ardeleanu, general director of the Romanian Customs, said in the same press release. "In the first two months of the year, we seized more than 700,000 pieces of cigarettes, as the biggest haul was made on the border with Ukraine and Moldova," he added.
"A pack of cigarettes costs 2.8 lei ($0.69/0.63 euro) in Ukraine and sells for 8 lei on the other side of the border," Japan's Tobacco International (JTI) corporate affairs and communications director for Romania, Moldova and Bulgaria, Gilda Lazar said in the same press release. The JTI official added that he is deeply concerned about the lack of coherent policies for tobacco, including combating illicit trafficking.
In February, JTI Romania said it may halt production at its Bucharest factory in May as it needs more time to implement a new EU directive on the packaging and production of tobacco products.
On a more positive note, British American Tobacco (BAT) officials hailed the authorities' efforts in closing down sweatshops and seizing large quantities of smuggled cigarettes. However, as illegal trade continued to grow in January, BAT, along with the other tobacco companies, is asking for a national strategy to combat illegal trade in cigarettes, the company's corporate and regulatory affairs director Adrian Popa said, as quoted in the press release.
The third big tobacco company in Romania, Philip Morris, has called on the authorities for stricter control at the border crossings with Hungary and Bulgaria, as well as at markets, fairs and metro stations.
Illicit trade in cigarettes remains far above the EU's average level of 10%, the company's corporate affairs director Alexandra Olaru said in the press release.
Pending amendments to the country's regulatory framework on the tobacco industry are another major concern for the local market players.
An EU Directive provides that until May 20, producers have to make significant changes in the production and packaging of cigarettes, but Romanian legislators have still not decided how the packages should look.
The tobacco industry is the second biggest contributor to Romania's budget, generating 3 billion euro ($3.3 billion), or 2% of the country's GDP and 12.5% of all budget revenues in 2015. The industry also generates 4,000 direct jobs and 45,000 indirect jobs in Romania.
($ = 0.9082 euro)