October 5, 2009 - Bulgaria, which has the second-highest rate of smoking in the European Union, is said to be set to make smokers cough up about 30 percent more for cigarettes in 2010 – bringing forward by a year increased excises to EU levels in a move designed to help state coffers through increased revenue and decreased health costs. (Bulgaria - Cigarette excise duties will be increased next year..)
Finance Minister Simeon Dyankov has confirmed that excises on tobacco products will go up, although with the 2010 Budget not yet finalised, there is no official confirmation yet of the precise price hikes.
Media reports of the planned move brought an outcry from tobacco interests who said that it would worsen Bulgaria’s already considerable cigarette smuggling problem and drive the country’s tobacco products giant Bulgartabak to bankruptcy.
Bulgartabak told Bulgarian daily Dnevnik that the reported plan to increase the excise of cigarettes to 76 euro a 1000 pieces was a surprise because "until a few days ago we were discussing an excise duty of 64 euro".
Bulgaria has a chequered [checkered] history with moving against smoking. A 2005 limitation of smoking in public places such as restaurants and cafes has proved largely ineffectual, and there is public skepticism about plans to impose an outright ban on puffing in public places in June 2010.
If the reported excise increase takes effect, the price of Victory Light, one of the most popular brands, would increase from 3.40 leva (2.55 USD) a packet to 4.50 leva (3.37 USD), while Marlboro would go from 3.90 leva (2.92 USD) to five leva (3.75 USD).
While smoking bans in Bulgaria have been largely ignored (even on Government premises – the handover of Cabinet offices in July 2009 saw one set of incoming and outgoing Cabinet ministers sharing a smoke in front of television cameras) previous price increases have seen sales drop. With pay in Bulgaria low by EU standards, the smokers’ market is price-sensitive.
Soon after reports of the planned excise increase, one television station in Bulgaria illustrated to smokers how much money they were burning up every year through their habit.
The year 2009 has seen several moves against smoking in Central and Eastern Europe, and not only in EU countries – where European Health Commissioner Androulla Vassilou has called for uniform laws against smoking in public places and workplaces throughout the 27-member bloc.
In July 2009, Greece banned smoking indoors in all public or private areas used as workplaces, including buses and taxis, and the same month, Turkey – not an EU member – caused an outcry when in the same month it imposed a comprehensive ban on smoking in bars, restaurants and cafes.
A few months earlier, non-EU-member Norway outlawed public displays of tobacco products, while in Switzerland, where smoking legislation is dealt with at canton level, a September referendum led Geneva to reimpose a ban on smoking in public places.
Bulgaria’s northern neighbour and fellow EU member Romania has taken the route of increased excises – twice in 2009 – on the way to matching EU levels in 2010. Lithuania also has twice raised excises in 2009, pushing cigarette prices up by close to 50 per cent in a year
A sole reversal of the trend was in Croatia, which made headlines around the world by backing down in September on an earlier outright ban, amending the rule to allow smoking in a fifth of the area of a restaurant or cafe. (Croatia - backs down (loosens) smoking ban..)
One EU state that has bucked the trend so far is the Czech Republic, where it is up to restaurants and pubs to use their own discretion whether to declare themselves smoking or non-smoking. (Czech Republic - pubs and restaurants allow smoking or Do NOT allow smoking..)
In several parts of Europe, mainstream manufacturers of tobacco are facing problems. In Latvia, British American Tobacco shut down its Riga production plant at the end of September, blaming increased excises that had pushed business to the black market – an echo of the line taken by the industry in Bulgaria. However, reports said that the plant had been hard-hit by a reduction in demand for its products for export.
Reference: Burning moneyThe Sofia Echo, 10/2/2009.
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