In 2023, more than 150 million smuggled cigarettes, with a black market value of almost 110 million lei (€22 million), were seized in Romania as a result of a significant effort by the authorities to stop illegal trafficking. Seizures last year were up almost 40% compared to 2022, the highest level of illegal cigarette seizures in 5 years, according to synthetic data from www.stopcontrabanda.rothe only real-time centralizer of seizures of contraband cigarettes on the territory of Romania.

• In 2023, Romania recorded the largest amount of seizures of illegal cigarettes in the last 5 years, according to data centralized at StopContrabanda.ro. For comparison, in 2018, Romanian authorities confiscated a total of 112 million cigarettes.

• In 2023, Romanian authorities seized more than 150 million contraband cigarettesand their total value on the black market was almost 110 million lei (22 million euros).
• Compared to 2022, the catch volume is increasing by almost 40%.when authorities seized more than 110 million contraband cigarettes.
• Last year, there were 2 revisions of the excise tax on tobacco and nicotine products in a row, in conditions where excise duties and cigarette prices in Romania are the highest in the EU in relation to purchasing power*. In countries neighboring Romania, cigarettes can be bought even about twice as cheap, and smuggling is very profitable.
• Counterfeit goods and illegal trade in packaged tobacco continue to grow. And in 2023, about 25% of cigarettes consumed on the illegal market in Romania are counterfeit. In the second half of last year, the authorities uncovered smuggling networks that were going to illegally sell more than 30 tons of tobacco, and the volume of counterfeits detected last year tripled**.
• The goal of BAT, the initiator of the Stop Contrabanda platform, is to build a better future (A Better Tomorrow™), including through ongoing information campaigns and ongoing support for anti-trafficking activities.

For comparison, in 2022, the authorities seized more than 110 million contraband cigarettes, and 5 years ago, in 2018, the annual volume of seizures was 112 million cigarettes***.

According to the latest data from Novel Research, in 2023, the average annual volume of smuggling increased in Romania by more than one percentage point, to 8.2%. This comes after the average annual smuggling rate fell significantly to 7.1% in 2022, the lowest level in 15 years, which implicitly also meant higher revenues for the state budget.

In 2023, the average annual volume of cigarette smuggling in Romania corresponds to the European average in 2022, according to the KPMG study, which is estimated at 8.2%. Last year there were 2 consecutive revisions of the excise tax on tobacco and nicotine products in the context that the excise tax and cigarette prices in Romania are the highest in the EU in relation to purchasing power*. In Romania’s neighboring countries, cigarettes can even be bought for about half the price, which makes smuggling very profitable. Also, Romania has a 2,000 km border with non-EU countries, where tobacco prices can be three times lower.

“The trend towards an increase in the level of smuggling of tobacco products, as well as the significant prevalence of counterfeit products, indicate serious risks that remain for the safety of communities and economic development, as well as for the revenues of the state budget. On the other hand, the significant level of seizures of illegal cigarettes in 2023 shows once again that the pressure of the illegal market is increasing, which requires that the fight against illegal trafficking remains a priority. The project of the Ministry of Finance to equip customs with 26 new scanning systems in the near future, we are convinced that the continued efforts of law enforcement agencies will significantly contribute to the strengthening of efforts in the fight against illegal trafficking. Of course, these efforts must be supported by balanced and predictable fiscal measures that support a legal and sustainable business environment and trade in legal, regulated and fairly taxed products.

As BAT has been operating in Romania for over 25 years, we are delighted to be part of this joint effort. BAT Romania remains one of the country’s largest taxpayers, with approximately 10.5 billion lei paid to the state budget in 2022, and a reliable partner of the authorities in supporting anti-smuggling efforts through information and awareness projects, as well as through the donation of necessary equipment to border of the country, as part of the “Stop Smuggling” campaign.,” said Ileana Dumitru, director of corporate and regulatory affairs for the Central and Southern Europe region of BAT.

In 2023, 3 counties registered more than half of the total annual catch

In 2023, on the western, southeastern, and northeastern borders of the country, in the region Arad (the largest volume of cigarettes destined for the black market, more than 36 million cigarettes), Constanta (over 28 million cigarettes) and Suceava (over 21 million cigarettes), according to data centralized on StopContrabanda.ro.

The black market value of just the catch registered last year in these 3 counties is over 52 million lei.

Counterfeiting is on the rise. Significant seizures of loose tobacco

Illegal trade in counterfeit goods is alarming, given that in 11 months of 2023, the authorities discovered 1,116 acts of a criminal nature, more than 3 times more compared to the same period in 2022, when 356* was discovered. Furthermore, approximately 25% of cigarettes consumed on the illegal market in Romania are counterfeit, according to the results of laboratory analyzes carried out by manufacturers participating in the study of the illegal cigarette market.

In fact, according to the latest report from the World Customs Organization****, internationally there has been a significant increase in the number of detentions of goods infringing intellectual property rights at EU borders. The number of seizures reported by authorities increased by approximately 34% in 2021 compared to 2020, with the majority of these seizures being cigarettes. The World Customs Organization also notes a marked increase in related seizures illegal online traffic.

At the same time, the illegal trade in cheese is growing. In the last months of last year, Romanian authorities destroyed smuggling networks that were going to illegally sell more than 30 tons of loose tobacco. The largest catch recorded between September and December 2023 took place in the counties of Constanta, Calarasi, Ilfov, Dolj and MuresHere, law enforcement officers seized more than 33 tons of loose tobacco and hookah tobacco intended for illegal consumption.

Data on the development of cigarette seizures in Romania can be viewed in real time on the www.stopcontrabanda.ro platform, a BAT initiative aimed at supporting the efforts of the authorities by centralizing seizures throughout the country, as well as by informing consumers about the effects of cigarette smuggling on society. The campaign is carried out in partnership with the Romanian Police, the Romanian Border Police, the National Agency for Tax Administration (ANAF) and the Romanian Customs Service. The Stop Smuggling campaign was launched by BAT in 2017 to create a one-stop shop for information on cigarette smuggling.

About cigarette smuggling in Romania

• Romania has the highest level of cigarette smuggling in Eastern Europe and, at the same time, the highest level of cigarette prices in the EU relative to purchasing power, according to the Nanny State Index 2023.
• Romania has a 2,000 km border with non-EU countries where tobacco prices can be three times lower.
• Illegal cigarette traffic costs the Romanian state approximately 2 billion lei annually, which is equivalent to 500 km of modernized national roads. 1
• Each container of illegal cigarettes means a million euros in profit for smuggling networks. Interpol data shows that the illicit traffic in cigarettes is a catalyst for drugs, weapons, people and even terrorist activities.
• In 2022, cigarettes will account for the majority (50%) of the global catch2

About BAT in Romania

• BAT is one of the largest contributors to the Romanian state budget. Against the background of a decrease in the level of cigarette smuggling, BAT had a total cumulative contribution to the state budget of about 21.5 billion lei in 2022 and 2021 in the form of taxes and excises.
• BAT is the leader of the Romanian tobacco market with a share of more than 50%.
• BAT employs more than 3,000 people and creates another 30,000 jobs in the distribution and supply chain.
• BAT launched the glo device in Romania in December 2017, the company’s most innovative product, which heats rather than burns tobacco.

About BAT worldwide

BAT is a leading consumer products company whose strategic goal is to build A Better Tomorrow™ and reduce health impacts by providing consumers with low-risk, enjoyable adult product options.

The company clearly states that cigarettes are a major health hazard and that the only way to avoid this is to quit smoking. BAT encourages those who continue to smoke to switch completely to scientifically proven, lower-risk alternatives*. To achieve this, BAT is transforming itself into a truly consumer-centric multi-category FMCG business.

BAT’s aim is for 50 million consumers to choose tobacco-free products by 2030, and to generate £5bn of revenue from new categories by 2024. BAT has set a number of ambitious sustainability targets, such as becoming carbon neutral for Goals 1 and 2 by 2030, eliminating the use of unnecessary single-use plastics and making all packaging reusable, recyclable or compostable by 2025.

BAT has more than 50,000 employees. BAT Group’s 2022 revenue was £27.65bn and operating profit was £10.5bn.

The company’s strategic portfolio includes its global cigarette brands and the category of reduced-risk tobacco and nicotine products*, as well as traditional smokeless tobacco products. The portfolio includes products such as e-cigarettes, tobacco heating products, modern oral products including tobacco-free oral nicotine products, and traditional oral products such as snus and moist snuff. In the first half of 2023, 24 million consumers chose new BAT product categories that do not involve burning tobacco, an increase of 1.5 million compared to 2022.

* Based on existing data and assuming full transition from smoking to these products, which are not without risk and addiction.

Article supported by BAT