With the higher excise duties, the price of Bulgarian cigarettes will increase by an average of 26 per cent from next year, Bulgartabac Holding CEO Kornelia Ninova told the press.

A box of the popular Victory cigarettes will sell for 3.45 leva, up from 2.75, Sredets for 3.15, up from 2.50 leva, MM 100 mm for 3.45 leva, Eva for 3.25 leva, Melnik for 2.90 leva and Prestige for 3.15 leva.

Bulgartabac expects its market share to shrink to 50-55 per cent from the current 60 per cent.

Bulgartabac's key companies, the Blagoevgrad and the Sofia cigarette factories, will end 2008 with a profit.

"Six or seven very difficult months are in store for us," said the CEO. She said that would result from the economic slowdown, the increase of excise duties, the price wars and the loss of market share.

Bulgartabac plans no layoffs at this stage, said Ninova. She would not disclose the average wage level at the company.

The Bulgartabac management believes that the transition period during which retailers will be able to sell cigarettes with the old excise bands, should be limited to the first three months of next year.

The other Bulgartabac executive director, Ivan Bilarev, said that they will try to increase exports. The holding company has been able to secure export contracts with the Far East and is present in the markets of Hong Kong, Taiwan and Cina. Earlier this month it signed a deal for sale of Eva cigarettes to the Benelux countries. But the main export market remains the Middle East.

Bilarev also said that Bulgartabac is preparing to launch a new upscale cigarettes and the tobacco blend is now ready.

This year the holding company is expected to sell a total of 12,000 t (approximately 12 billion) of cigarettes at home and 5.5 billion abroad. The increase on 2007 will be 18.5 per cent.

Smuggled cigarettes currently take 15 per cent of the market and their share will probably expand after the increase of the excise duty, said Kornelia Ninova.

Source: BTA