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Story of cigarettes in Bulgaria

Published on October 11th, 2007 18:10

Well-known dramatic play about rise of excise taxes on tobacco and how this rise influences the state economy will soon be launched on Bulgarian tobacco market too.

This dramatic play has been already played in some states and results were not very “bright”. Smuggling of cigarettes from out-of-states markets is one of practiced widely.

Although, this effect doesn’t terrify the Bulgarian government as they plan to introduce new tax for cigarettes at the beginning of 2008.

Rise of prices on cigarettes was announced by Yulii Manoilov, representative of the National Union of Tobacco Producers. If this rise will be applied, then prices for Bulgarian cigarettes could go up by as much as 1.05 to 1.20 leva per carton. So, smokers ought to pay cost between 2.75 and 3.90 leva for one pack of cigarette.

Manoilov believes increase will raise tobacco smuggling from the current 25 - 30 % to 45 - 50 %. So, financial sector will lose about 750 to 800 million leva.

Bulgartabak is one of the major tobacco enterprises located in Sofia, the capital and largest city of the Republic of Bulgaria. This enterprise is one of the leading tobacco companies in Central and Eastern Europe and is the most important buyer, processor and exporter of tobaccos, cultivated in Bulgaria. Bulgartabak Company has four cigarette factories in the country (Sofia, Plovdiv, Blagoevgrad and Stara Zagora) and its brand portfolio contains American, Virginia and European cigarette brands.

A lot of money and hopes, for example of those who work there, are invested in this enterprise. It was announced that the employees from Bulgartabak Holding factories would start protests against the raise in excise taxes. People are afraid that import cigarettes would have more success than locally produced cigarettes.