Wednesday, 30 June 2021

New Croatian Tobacco Producer Association Formed as Growth Desired

June the 30th, 2021 - A new Croatian tobacco producer's association has been formed with the aim to better the overall conditions of Croatian tobacco production.

As Poslovni Dnevnik writes, the goal of establishing this association is to gather together the country's numerous tobacco producers in as many numbers as possible, because the association's iniators believe that better association will provide their members with better and safer conditions for tobacco production.

''We want a secure future for our investments and our work in production,'' stated Mihael Colak, the president of Tabacum, a new association of Croatian tobacco producers which, as he claimed, saw as many as 57 Croatian tobacco producers join, all of whom work to cultivate about 667 hectares of tobacco areas in the Podravina and Slavonia areas.

Noting that Tabacum will bring together producers who have a contract with the largest organiser of production and buyer of tobacco in the country - Hrvatski duhani, Colak said that the association is going to primarily be focused on more intensive dialogue with the Ministry of Agriculture, the Croatian Chamber of Commerce, the Croatian Chamber of Agriculture and aim for a much more stable and better situation for them here on the Croatian market.

"Given that tobacco is one of the most profitable agricultural crops in all of Croatia, where the annual value of production exceeds 100 million kuna, we believe that in our efforts we will be supported by counties in which tobacco is primarily produced.

We're convinced that the further strengthening of production is in the interest of all Croatian tobacco producers,'' stated the president of the Tabacum association, which will work hard to promote continued investment in new technologies, which will reduce the need to hire additional labour, increase productivity and ensure survival of the nation's tobacco production.

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Friday, 26 February 2021

Price of Croatian Tobacco Products to Rise as of Monday

February the 26th, 2021 - Croatian tobacco is set to see a price hike once again on the 1st of March, 2021 following a recent government session during which the matter of Croatian tobacco products and their excise duties was discussed.

As Poslovni Dnevnik writes, at a recent government session, a decree was readily adopted which will increase excise duties placed on Croatian tobacco and related tobacco products from March the 1st this year, which will naturally lead to an increase in prices for the end user''The specific excise duty in the amount of 400 kuna per thousand cigarettes is increasing (when compared to the previous 370 kuna). The minimum excise duty will be increased to 888 kuna compared to the current 824 kuna.

The amount of excise duty for fine-cut tobacco is set to increase to 860 kuna per kilogram compared to 800 kuna, which is what it is now. Excise duties on heated tobacco products is what is set to increase the most - from the existing 800 kuna to as much as 1,400 kuna.

Excise duties placed on e-liquids aren't going to change price-wise,'' explained Finance Minister Zdravko Maric when discussing the upcoming Croatian tobacco product price increases. He also stated that the decision on the final price for consumers lies with the producers themselves, but also that according to the calculations of the Ministry of Finance, a pack of cigarettes should not increase by more than two kuna for the end consumer.

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Monday, 14 September 2020

British American Tobacco Closure Threatens Croatian Producers

As Darko Bicak/Poslovni Dnevnik writes on the 13th of September, 2020, the announcement of the closure of the British American Tobacco (BAT) factory in Kanfanar and the departure of the aforementioned company from Croatia could harm as many as 400 Croatian producers.

BAT's decision to shut up shop has been surrounded by many rumours. The closure comes due to, as has been speculated, unfavourable business conditions, primarily the excise policy, and the absence of government moves promised by Prime Minister Andrej Plenkovic after a meeting with the company's management back in late June.

The consequences of the company's departure and the cessation of tobacco production in Istria's Kanfanar would be felt primarily by their workers, about 500 of them, but also by the local and regional self-government units there due to the absence of taxes and other benefits. However, nervousness is also growing among Croatian producers of tobacco, of which there are about 400, and 350 of them are BAT subcontractors organised through the subsidiary Hrvatski duhani. Croatian tobacco makes up more than 80 percent of the total tobacco production in Croatia, with a total annual value of around 100 million kuna.

Tobacco is an agricultural crop with extremely high added value, and the continuity of production could be seriously disrupted by the closure of the tobacco factory and the withdrawal of the global tobacco giant from Croatia.

Slaven Krapac, a Croatian producer from Turnasica near Pitomaca, who cultivates nineteen hectares of tobacco along with his family, pointed out that he is currently satisfied with his position on the market and his cooperation with BAT, ie Croatian Tobacco.

"I've been dealing with tobacco for 25 years and all sorts has happened on the market. The worst period was 2011-2015. when fuel and gas prices were at a record high, and tobacco purchase prices were low - going for only 8.2 kuna. Last year, our purchase price was 14 kuna, which is the highest so far. In addition, since I've been associated with Croatian tobacco for the last ten years, I'm satisfied with the relationship we have - the purchase price becomes known in February, they buy up all of the production, they co-finance the purchase of the machines, which is especially important today when there is no labour, and they generally give us a business security framework,'' Krapac explained.

“Croatian tobacco financed my production and mechanisation. They've invested a lot in us Croatian producers and it would certainly not be good for them to leave,'' concluded Krapac. Every year, Croatian tobacco invests two thirds of its production value, around 66 million kuna, into supporting Croatian producers in procuring the necessary raw materials for tobacco production, financing energy costs, human labour, insurance policies and other necessary costs.

This was also confirmed by Mihael Colak from Balkic near Slatina, who grows tobacco on his family farm which stretches across 26 hectares. "I need 500 to 700 thousand kuna to prepare for the season, for which I'm now credited with by Croatian tobacco, who are guaranteed to buy the entire production. A large part of the producers wouldn't be able to finance the production without that help,'' said Colak.

He added that he doesn't care when he hears speculations that the factory in Kanfanar is closing and that BAT is leaving Croatia.

In addition, the purchase price of tobacco at Croatian Tobacco is continuously growing. Last year, they paid a record average purchase price for Virginia-type tobacco of almost 14 kuna per kilogram, paying Croatian producers a total of 3.5 million kuna more than the year before. The average price for Virginia tobacco has risen by nine percent in the last three years alone, and by more than 20 percent in the last five, which, as producers claim, is a rarity in domestic agricultural production.

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