Cigarette smuggling witnesses a seasonal decline, with Romania’s tobacco black market dipping this July to 8.4 percent of total consumption, shows a Novel Research survey released on Friday.

„In July, tobacco smuggling idles down in most regions of the country, following the usual seasonal trend at this time of the year. The most substantial decline was in the country Northeast – at 9.1 percentage points, although this remains the region most affected by illegal cigarette trade, which stands at 17.4 percent. The country south also recorded a significant decrease of 4.9 percent to 6.4 percent of consumption. By the source of black market products, duty free outlets hold the highest share – 39.4 percent (up 3.1 percent), followed by the Republic of Moldova with 22.4 percent, and Bulgaria, which dropped 3.3 percentage points to 18.9 percent,” said Novel Research managing partner Marian Marcu, as cited in a release.

According to BAT Legal and External Affairs Director for South-East Europe Ileana Dumitru, in the first part of 2024 the Romanian authorities captured over 40 million contraband cigarettes – more than 75 percent of which were in the southern part of the country, which is indicative for the dynamics of the illicit market and for the shift in the sources of these types of products. Citing the stopcontrabanda.ro platform, the BAT representative said that „the black market value of these products is around RON 40 million – a significant loss for the state budget and an enormous gain for the smuggling networks, to the detriment of economic development and community safety.”

Gilda Lazar, JTI Head of Corporate Affairs & Communications – Romania, Moldova and Bulgaria, cautions that there are high chances that the black market returns to growth this fall, as excise revenues continue to decrease. „We hope that the tobacco industry will not have to bear again the burden of the excessive deficit, and we express our conviction that the authorities will transparently and constructively approach a sector of strategic importance for the country’s budget revenues and economy, especially in the current international geopolitical context of uncertainties never seen in 50 years. Let us keep in mind that after the alteration of the calendar, early this year, the excise duty on cigarettes in Romania reached 135.5 euros [per 1,000 cigarettes], while in Bulgaria it is 99 euros, in Poland and Croatia it is 125 euros, with significant differences compared to neighboring non-EU countries: 90 euros in Serbia, 69 euros in Moldova, and 60 euros in Ukraine,” stated Gilda Lazar.

Enrico Ziino, Head of Corporate & Legal Affairs South East Europe, Imperial Brands, pointed out that criminal groups were dismantled and large amounts of smuggled products were confiscated during this period, stressing that for this setback in crime activities to not be just temporary, the authorities’ efforts need to be backed by fiscal policy predictability and legislative stability. Ziino believes that taxation is the factor with the highest influence on the black market, having a quick and visible impact. „What is gained in one month through higher excise taxes is lost the following month. Moreover, this fuels organized crime, and border and citizen safety is affected,” Enrico Ziino also specified.

Marcel Simion Mutescu, president of the Romanian Customs Authority, believes that the decrease in illegal tobacco trade to a single-digit percentage is the effect of both the installation of modern X-ray scanners in customs offices, and of the concerted operative actions of the customs authority in partnership with other law-enforcement institutions.

„The efforts and sustained activity of the border police resulted in the confiscation, in the first seven months of the year, of approximately 1.4 million packs of cigarettes worth over RON 31.3 million. Also, 6,327 kilos of loose tobacco and 616 kilos of hookah tobacco were seized in the reporting period,” said Border Police general inspector, quaestor Cornel-Laurian Stoica.

For its part, between January – July 2024, the Romanian Police seized 15,963,169 cigarettes and 6,757 kilos of tobacco, and handed down 595 sanctions in amount of RON 4,635,600, said director of the Economic Crime Investigation Directorate of the Romanian Police Inspectorate General, police chief Aurel Dobre.

Major taxpaying tobacco companies funneled in 2023 more than RON 22 billion to the state budget in excise duties, VAT and other taxes and contributions.

AGERPRES