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02 Mar 10

Cigarette Smuggling On the Rise In Romania

Smuggled cigarettes represented around 36 per cent of the total Romanian cigarette market in the first two months of the year, up by 14 per cent compared to the last quarter of 2009, according to a survey quoted by
Mediafax news agency.

The rise in smuggling was prompted by a near 50 per cent increase in cigarette prices following excise hikes at the beginning of this year.

"A market share of over 36 per cent for contraband cigarettes means one in three cigarettes smoked in Romania comes from illicit trade. If contraband was the market leader in 2009 by profit, now it is also the leader by volume," said Adrian Popa, a representative of the tobacco industry.

The report estimates that the government will lose an estimated €1 billion in taxes and excise fees because of contraband cigarettes, as cigarette producers expect smuggled products to reach 50 per cent of the
total market by the end of the year.

Most contraband cigarettes sold in Romania come from neighbouring Moldova (around one third of total smuggled cigarettes), duty-free shops and other nearby countries such as Ukraine and Serbia.

On the Romanian market, a pack of legally sold cigarettes costs between €2-2.5, while the price of a pack of contraband cigarettes is almost half that amount.

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