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Tobacco industry challenges new EU rules

  • The tobacco industry continues to challenge the necessity of new European Union rules which require governments to impose supply chain tracking on manufacturers.
  • The group thinks its current track and trace system can be adapted, instead of adopting costly third-party solutions.
  • One goal of an industry-wide tracking system is to cut down on the illegal trade of cigarettes.
  • Related stocks: RAI, LO, MO, PM, BTI, ITYBY, ITYBF
Comments (3)
  • maalem666
    , contributor
    Comments (7) | Send Message
    The Tobacco industry, as well as all Government Budget authorities are severely affected by the contraband business which has proven to be so lucrative for traffickers that recent estimates mention a volume of more than 150 bio cigarets.
    This volume impact not only official and legal sales of producers but also Government receipts through the so called Excise Tax which can be as high as 80% of the cigaret retail public price in some countries.
    Other issue affecting Budget receipts, is the emergence of e-cigarets which are not taxed as high as conventional tobacco cigarets. The explosive growth of this segment is "forcing" Governments to slowly impose the same public smoking regulations and overall same taxation in order to recuperate the lost income.
    18 Jun, 09:11 AM Reply Like
  • ScooterSC
    , contributor
    Comments (30) | Send Message
    Is this contraband from China?
    18 Jun, 02:32 PM Reply Like
  • maalem666
    , contributor
    Comments (7) | Send Message
    In fact contraband is twofold.
    You have
    (a) genuine cigarets manufactured by the original producers that you can buy Duty Free in Amsterdam or Rotterdam and then which are introduced illegally in a country and the benefits are huge. The tax that the trafickers do not pay is used to bribe police and customs people and to pay the distribution network. The traffickers can make about 150'000 $ per container.
    (b) Genuine cigarets retailed officially in a country at a retail price so low that anybody can buy them and introduce them illegally in a country with a much higher excise tax.
    (c) Counterfeited cigarets introduced illegally as in section(a) and generating much higher profits because much cheaper to buy than genuine cigarets.
    And Yes, these cigarets come mainly from China where they are manufactured in hundreds of small underground factories.
    Today counterfeiters have made so much money than they are able to manufacture cigarets so perfectly that the consumers cannot make the difference with the real products.
    The number of 150 bio units is related to counterfeited cigarets only.
    Volumes for contraband of genuine products are probably much higher.
    18 Jun, 03:36 PM Reply Like
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