Illegal cigarette trade is thriving and has acquired new forms such as sale by the piece and packets of 400 g roll-your-own tobacco of dubious quality without excise revenue stamps, priced 15 leva. This supply is expanding and is pushing the legal product out of the market, Bulgartabac Holding complains.
A non-governmental organizations' survey found that the black market accounts to as much as 30 per cent of total cigarettes sales in Bulgaria, among the highest levels in the EU. Cigarette smuggling is seen as the main reason for Bulgartabac's negative financial results. In the first half of the year the company sold 26 per cent less cigarettes than in the same period of 2008. This year smokers are looking mostly for cigarettes sold at about 3 leva per box, while in 2008 cigarettes priced about 2 leva were more popular.
The grey market is flourishing mainly due to the constant increase in tobacco product prices. Cigarrette prices vary significantly from country to country, which forces some dealers to import illegally tobacco products to the more expensive markets. According to Bulgartabac and cigarette importers, smuggling accounts for one-fourth to one-third of the cigarette market.
Excise duty in Bulgaria is planned to increase in 2010 to reach the EU minimum of 64 euro (125 leva) per 1,000 cigarettes. In 2014 the excise duty should rise to 90 euro (176 leva) per 1,000 cigarettes, as the European Commission plans to cut cigarette sales by 10 per cent over the next five years.