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Cigarettes In Romania To Cost RON0.40 More Per Pack As Of Sep 1

The price for a pack of cigarettes will grow in Romania by 0.40 lei (EUR1 = RON4.2238) starting with September 1, once the excise for tobacco is increased by EUR7, from EUR57/1,000 cigarettes to EUR64/1,000 cigarettes, according to the representatives of the main cigarette makers in Romania.
Cigarettes In Romania To Cost RON0.40 More Per Pack As Of Sep 1
24 aug. 2009, 17:44, English

“The excise increase was operated in two stages, one of RON0.30 and another of RON0.40. The price hike of RON0.30 was decided n June, to cover the excise increase scheduled for September 1 and to alleviate the impact. Another hike will be operated in April most likely, which will lead to a total increase of RON0.60-RON0.70. We will study the new excise structure and apply an increase of RON0.30-0.40,” said Gilda Lazar, head of JTI Romania corporate affairs

The Government decided in March by Emergency Ordinance to increase the total tobacco excise by EUR14 this year, an additional EUR7 as of April 1, followed by an increase of EUR7 as of September 1, when the tax will reach EUR64 per 1,000 cigarettes.

“The price of a pack of cigarettes will most likely be hiked by RON0.40,” Adrian Popa, corporate & regulatory affairs head within British American Tobacco Romania, told MEDIAFAX.

The level of the minimum tobacco excise between September 1 and December 31, 2009 is of EUR58.24/1,000 cigarettes, or of RON217.61/1,000 cigarettes, according to a recent order of finance minister Gheorghe Pogea.

According to the new calendar approved by the Government, the total tobacco excise will increase by EUR10/1,000 cigarettes as of 2010, which will lead to an average increase of RON1/pack, cigarette makers said.

“Unfortunately, contraband is growing too. Legal sales are dropping, the evolution is really curious. Those who can afford, smoke premium and prestige, segments which are going up, but sales are dropping on the cheap segments, which are no longer that cheap. Consumption is oriented to contraband. Up to now, the profile of the contraband consumer was male, aged 55, living in rural area, but now it is heading to youngsters who can no longer afford the new prices. Our calculations show contraband exceeding 20% and going up, compared to the 13-14% last year,” Lazar said.

British American Tobacco, Philip Morris International and Japan Tobacco International control over 95% of the cigarettes and tobacco products market in Romania.