Romania has one of the largest external border of the EU – more than 2,100 km. Some of our neighboring countries are not EU members, and have different taxation systems where a cigarette pack is cheaper than local prices. This creates ideal conditions for the criminal gangs behind the black market in cheap, illegal tobacco.
About 75% of the price of cigarettes is tax. This means that tobacco companies like JTI depend on the government’s fiscal policies and the regulatory environment, as well as the capability of enforcement authorities to reduce the black market. Examples demonstrate the importance of dialogue between the tobacco sector and government: the massive excise increases in 2009 resulted in a corresponding price increase, which encouraged contraband because of the disparity in cigarette prices between Romania and its non-EU neighbors.
JTI is proactive in working with the authorities to tackle the black market. JTI works with Romanian Law Enforcement Authorities to reduce the illegal trade and to clarify the relevant legislation. We have signed cooperation agreements with the Police General Inspectorate, National Agency for Fiscal Administration (Customs) and the Border Police. As part of the partnership with Customs more than 60 dogs trained to detect tobacco products, cash, drugs and ammunition are active in customs points all over the country. In partnership with the authorities, we run public campaigns aimed at increasing awareness on the negative effects of the illegal trade with cigarettes. These campaigns have been successful, leading to reductions in the illegal cigarette trade during the periods in which they've been run.