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British American Tobacco nabs 40 per cent market share in Bulgaria with its purchase of Bulgartabac brands

British American Tobacco (BAT) has agreed to buy some of Bulgarian cigarette maker Bulgartabac’s top brands in a deal worth more than €100m (£84.8m).

The move to buy Victory, Eva Slim and GD brands will bring BAT’s market share in the country to 40 per cent from just 12 per cent previously. The deal will include retail and distribution assets in the country and the wider Adriatic region.

BAT, which has operated in Bulgaria for 25 years, said it is proud to be making the biggest investment in the country this year.

“We are committed to the Bulgarian market and are very excited about this investment in a country which is increasingly demonstrating that it has a very bright future. This significant investment demonstrates our confidence both in Bulgaria and our future growth here,” said Richard Widmann, general manager of BAT’s central European cluster.

Subject to regulatory approval, the deal will be complete by mid-2017, BAT said.

A spokesperson for BAT added the transaction aligns financially and strategically with the business objectives for the central European region. The group will grow its business in Bulgaria and further enhance its position in the Balkans, following its acquisition of TDR in 2015.

In Greece’s tobacco culture, passive smoke a serious problem

Nearly two-thirds of Greeks are inhaling someone else’s tobacco smoke on a daily basis, making Greece the worst nation in the European Union in exposing its people to the health risks of passive smoking.

The European Union’s statistical office Eurostat said Wednesday that 64.2 percent of Greeks suffered daily exposure to tobacco smoke indoors. Second in the EU is Croatia with 44.7 percent, followed by Bulgaria with 40.5 percent. At the other end, Sweden best protects its people from secondhand smoke with only 5.9 percent exposed, even better than Finland with 6.3 percent.

In a tally of EU smokers aged 15 and over, Bulgaria tops the rankings with 34.7 percent, ahead of Greece with 32.6 percent. Sweden only has 16.7 percent who smoke, with Britain the second-lowest with 17.2 percent.

Bulgarian tobacco firm Bulgartabac to halt exports to Middle East: Reuters

Bulgarian tobacco company Bulgartabac said it would halt sales to the Middle East as of April 1, following media allegations its products made up a large part of the cigarettes illegally smuggled into neighbouring Turkey, Reuters reported.

Bulgartabac denied any wrongdoing, adding its exports had been carried out in full compliance with customs and trade legislation, which had been confirmed by customs and tax audits.

“Given the sensitive situation in the Middle East, Bulgartabac is stopping exports to the region in order to prevent the involvement of the company in artificially created reputation problems that could completely ruin it,”  Bulgartabac said in a statement.

Bulgartabac said the move would result in 400 job losses, about eight percent of the group’s employees.

The allegations against Bulgartabac were reported last month by the Capital daily newspaper as well as the Dnevnik website.

Last year, Bulgartabac’s exports fell 23 percent to 19.3 billion cigarettes on an annual basis.

Bulgaria Deputy PM: Counteracting smuggling of excise goods one of govt’s main priorities (ROUNDUP)

Sofia. Rumyana Bachvarova, Bulgarian Deputy Prime Minister for Coalition Policy and Public Administration and Minister of Interior, held a working meeting at the ministry building with representatives of the five leading tobacco companies in Bulgaria.

Market research ordered by the five companies was presented at the meeting, the press centre of the ministry announced.

“Counteracting the smuggling of excise goods is one of the main priorities of the government – the motives for that are both of fiscal and general nature,” said Minister Bachvarova, speaking at the event.

Smuggled cigarettes made up a 13.4% share in the second quarter of 2015.

“This has been the lowest level of illegal trade in cigarettes in the past 8 years, since the research was started in Bulgaria,” the companies said and laid emphasis on the results produced through determination, the government’s political will, and the stepped-up measures to fight the illegal trade in cigarettes implemented since the beginning of 2015.

The analysis of the research reveals a positive trend and the lowest level of the illegal trade in cigarettes in the past 8 years.

Rumyana Bachvarova noted an inter-establishment coordination centre for counteracting smuggling and control over the movement of risky goods and cargo had been established at the Directorate General for Fight against Organised Crime (GDBOP) in line with the priority the cabinet had set.

Representatives of all institutions related to the problem work in it and it already achieves results and proves its efficiency.

Minister Bachvarova thanked the ministry’s partners for the picture created due to the research.

In her view, such meetings are a good opportunity leading to mutual benefits and positive results.

In the words of Chief Commissioner Georgi Kostov, Secretary General of the Minister of Interior, due to the jointly taken approach and efforts made by the Ministry of Interior, the National Customs Office, and the National Revenue Agency (NRA) the smuggling of excise goods has been significantly reduced.

Kostov also stressed the role of the GDBOP-based centre in the coordination of teams, which has also reduced the organised smuggling activities.

GDBOP head Chief Commissioner Ivaylo Spiridonov pointed to the successful joint work between partner’s services, due to which 5 illegal cigarette factories in Europe were neutralised in international operations.

Vanyo Tanov, Director of Bulgaria’s National Customs Office, remarked the government, which had the political will to fight against the illegal trade in cigarettes, was to be mainly praised for the results achieved.

A set of methods worked out by the Customs Office administration on the basis of an analysis of the tobacco products excise tax revenues confirms the announced results.

A remarkable growth of 17% to 19% has been registered in the cigarette excise tax revenues in the past quarter.

According to Vanyo Tanov, this is BGN 220 to BGN 230 million more in cigarette excise tax revenues so far in 2015 and this sum is expected to go up to BGN 250 million.

Tanov commented the Customs Office was preparing, including technically, for the increase in excise taxes on cigarettes in 2016, which will make the illegal trade in tobacco products more appealing to organised crime.
Negotiations are underway on an X-ray system for checks on trains, Vanyo Tanov announced.

The latest market research done in the second quarter of 2015 shows the consumption of illegal cigarettes makes up a 13.4% share of the total cigarette consumption in Bulgaria.

The research has been annually done in the past 8 years by an independent agency using the method of analysis of empty packages of cigarettes collected in 14 big Bulgarian cities and towns.

The research has been done twice a year since 2010 – in the second and fourth quarter of each year.

It is ordered by the five tobacco companies that are part of the “Initiative for counteracting the illegal trade in cigarettes” – British American Tobacco EOOD, Bulgartabac Holding AD, Japan Tobacco International Bulgaria EOOD, Imperial Tobacco Bulgaria EOOD, and Imperial Tobacco Bulgaria EOOD.

The significant drop of 4.7 percentage points compared to the previous research conducted in the fourth quarter of 2014 (18.1%) is due to the government’s determination and political will and the stepped-up measures to fight the illegal trade in cigarettes taken since the beginning of the year.

The good results conform to the public data on an increase in excise tax revenues in 2015.

Irrespective of the improvement, the companies believe there is more potential to reduce further the illegal trade in tobacco products – cigarettes and cut tobacco