Sunday, 13 June 2021

Illegal Tobacco Market Costs Croatia €186m

ZAGREB, 13 June, 2021 - An estimated potential loss for the Croatian budget due to the illegal tobacco market in 2020 was HRK 1.4 billion, according to findings of a survey conducted by the Croatian Employers' Association (HUP) and the Ipsos pollster.

The findings of the survey, conducted on a representative sample of 1,344 households with a total of 3,299 respondents, show a marked share of untaxed cigarettes and tobacco products used by consumers.

As many as 28.1% of adult Croatians are tobacco consumers, and 17% of tobacco products consumed in a year are illegal products, with illegal cut tobacco accounting for the largest portion.

As a result, in 2020 Croatia lost 1.4 billion kuna in tax revenue due to tobacco smuggling, HUP main economist Iva Tomić said last Wednesday at the presentation of the survey's findings.

Nearly 3 in 10 Croats aged over 18 are smokers

Davor Tolić of the Ipsos pollster said that 28.1% of adult Croatians consume tobacco products and they mainly smoke cigarettes, followed by cut tobacco.

The consumption of e-cigarettes, cigars and pipe tobacco and cigarillos amounted for less than 1% of the total consumption.

(€1 = HRK 7.5)

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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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Friday, 19 February 2021

Quarter of Smokers in Croatia Smoke More Because of Pandemic and Earthquakes

ZAGREB, 19 February, 2021 - One in four smokers in Croatia smokes more than before as a result of the coronavirus pandemic and last year's devastating earthquakes, a survey conducted by Ja Trgovac magazine and the Hendal market research agency shows.

The survey of tobacco consumption habits in Croatia was carried out in January on a nationally representative sample of citizens aged 18 and over.

A quarter of smokers interviewed, namely 26%, said they smoked more, while 18.5% said they smoked less. On the other hand, 56% said that the coronavirus outbreak did not affect their smoking habits.

Most of smokers (41.5%) spend up to HRK 200 (€26.5) a month on tobacco products and 32.8% up to HRK 500 (€66.5)). 22% spend up to HRK 1,000 (€133) and 3.7% more than HRK 1,000.

33.9% of respondents said they used tobacco products (cigarettes, electronic cigarettes, new generation products such as IQOS and glo, cigars or rolling tobacco), while 66.1% said they did not use tobacco products.

The survey revealed that cigarettes were the most popular tobacco product, used by 76% of consumers, ahead of rolling tobacco (22.9%), new generation products (13.2%), e-cigarettes (12.2%), cigars (1.4%) and chewing tobacco (0.4%). 1.4% of tobacco product consumers said they used something else.

70.4% of smokers buy tobacco products at newsagents', 46.1% do so at petrol stations, 42.5% at supermarkets, 36.4% in local shops and 16% in specialised tobacco shops. On the other hand, 9.1% buy tobacco products on the black market.

Monday, 31 August 2020

From October You Can Bring Only 2 Packs Of Cigarettes Into Croatia

August 31, 2020 – From October, you'll only be able to bring 2 packs of cigarettes or 50 grams of tobacco into Croatia from countries outside the EU, say new proposals. Day trips across the Bosnian or Serbian border for cheap smokes will be a lot less cost-effective.

Croatians who smoke and who live within easy driving distance of the Bosnian or Serbian border have had it good for quite a while. They've been able to skip across to the other side, pick up their smokes for the week, and save a lot of money by doing so.

This wasn't really illegal, but these golden days will be over from October 2020. Under new proposals, you'll only be able to bring 2 packs of cigarettes into Croatia from any non-EU country. The new proposals reduce the amount previously considered personal luggage by five times. You can currently carry 10 packs (200 cigarettes) across the border. 2 packs (40 cigarettes) is considerably less and will make the journey much less cost-effective.

The new proposals also extend to rolling tobacco in the same percentages. Instead of the current 250 grams of tobacco you're currently permitted to bring into the country from outside the EU, the amount will be reduced to just 50 grams.

Annual cigarette consumption in Croatia is a lot bigger than 2 packs of cigarettes. It is estimated at more than 300 million packs. The latest estimates say that around 7% of consumption uses non-taxable cigarettes. Such non-taxable tobacco products usually carry the tax stamp of Bosnia and Herzegovina, sometimes Serbia, and sometimes no stamp at all. This non-taxable section of the total is estimated to be worth between 500 and 600 million kuna.

Last year, the Croatian state budget collected 5.11 billion kuna from tobacco excise duties. In more than 16.2 billion of total excise revenues, only those from petroleum products are higher.

Although it is calculated that smoking in Croatia is decreasing in popularity, thanks, in part to anti-smoking health campaigns and rising prices, state revenues from tobacco excise duties have actually grown over the past five years.

Between excise duties and VAT, the Croatian state budget collects close to six and a half billion kuna from the sale of cigarettes and tobacco. This is almost 8% of the total tax revenues of the state budget.

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Monday, 29 October 2018

Economic Boost: BAT Considering Moving Production to Croatia?

As Darko Bicak/Poslovni Dnevnik writes on the 29th of October, 2018, in neighbouring Bosnia and Herzegovina, more than 40 percent of tobacco products end up being exported outside of the legal trade framework, and the main culprit for such a situation is poverty and disproportionately high yields on cigarettes and tobacco products. Could a potential move of production to Croatia provide a welcome economic boost for the country?

Even though British American Tobacco (BAT) have denied media speculation that they already started with the move of the production of their cigarettes from Bosnia and Herzegovina to their plants in both Croatia and in Serbia, they haven't gone as far as to totally exclude such a possibility in the forthcoming period.

Namely, the media in Bosnia and Herzegovina have announced that BAT's management board has decided that Aurora, Code and Diva cigarettes will be moved away from production in Sarajevo to neighbouring countries.

BAT, on the other hand, told Poslovni Dnevnik that producion at the Sarajevo Tobacco Factory (FDS) hasn't stopped.

"As BAT has bought FDS's brands, it is following the policy of producing and selling according to the smokers' preferences and in accordance with market conditions,'' they stated from the company.

Unfortunately, due to the large disturbances on Bosnia and Herzegovina's market caused by an increase in excise duties and the concerning collapse of the legal market by more than 35 percent in just three years alone, the sale and distribution of FDS former brands are not compromised, but all of BAT's other brands and other competitors on the market have been, and they therefore continue to face numerous unwanted challenges in this regard.

''On the illegal market itself, more than 80 illegally produced brands have appeared. Because of all of this, the future of production, the former brands of FDS, and of all the other legally produced brands on the Bosnian market is questionable,'' BAT explained.

They added that the black tobacco market is a major problem for this whole region, especially Bosnia and Herzegovina, where it exceeds a worrying 40 percent of the total market value. The main reason for this is the high tax burden because Bosnia and Herzegovina has the highest cigarette retail selling taxes in Europe, with the total costs representing 91 percent of the price of the cigarettes themselves.

Because of this, people in Bosnia and Herzegovina pay by far the most for cigarettes compared to the general standard of living in the rest of Europe, naturally leading them into a very tight corner, and then onto the illegal market, meaning that the economic repercussions of Bosnia's black market problems are dire, to say the very least.

BAT has estimated that Bosnia and Herzegovina's budget loses more than 230 million KM (about 115 million euro) per capita each year due the strong presence of the country's illicit tobacco market.

While Serbia, a non-EU country has been mentioned, could the safety of a European Union member state like Croatia be of some comfort to BAT and provide jobs and a possible economic boost to the domestic market if production was to be moved here?

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Click here for the original article by Darko Bicak for Poslovni Dnevnik

Wednesday, 5 September 2018

Alcohol and Tobacco Prices Have Risen by More Than 100% in Last 20 Years

While the price of alcohol and cigarettes have shot up, costs relating to the healthcare service have increased alongside them.

Wednesday, 8 August 2018

More Ease of Access for Croatian Tobacco on Foreign Markets?

Welcome news for Croatian tobacco producers as a new law being prepared will enable them to organise their sales themselves.

Tuesday, 2 May 2017

Dubrovnik! A Smoke-Free Place! Well, Almost

This one should not be taken lightly, as it comes by someone who has rolled God knows how many cigarettes in his long life.

Monday, 10 August 2015

New Rules for Cigarettes Users and Producers in Croatia

Some changes in the cigarette industry in Croatia.