Cigarette smugglers have become a major player on the market, with a whopping 36.2% share of the market. The illegal tobacco sales have increased dramatically as rising excise taxes have created strong incentives. Tobacco smuggling is expected to cost government over €1 billion in uncollected taxes.
A Novel Research study indicates that bootleg cigarette sales will make up for 36.2% of the total in Romania in February 2010, from 22% in the last quarter of 2009.

The price of a smuggled pack of cigarettes averages 5.9 lei, 4 lei below the legal price.

The country’s largest tobacco companies, British American Tobacco Romania, Japan Tobacco International Romania and Philip Morris Romania have seen their profits and market shares go up in smoke. In January, BAT had a share of 32.5%, 6% below 2008 level, JTI – 15.6% (-4.6) and PMI - 14.5% (-7.3%).

The country’s smuggling blackspots are Moldova, Maramures and Banat. Cigarettes are usually smuggled out of Moldova (32.3%), duty-free shops (27.4%), Ukraine (22.8%) and Russia (4.4%).

According to tobacco companies, 1% of illegal cigarette sales cost state around €30 million, of which €25 million in uncollected excise duties and €5 million in uncollected VAT.

In 2009, tobacco industry fed around €2-2.2 billion to state budget.

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