“Domestic consumption will not be enough to cover the impact of new prohibitions. We are already seeing a shift towards alternative solutions, such as the sale of electronic cigarettes and other nicotine-containing devices. It is not excluded, considering the context of prohibitive measures that will start with March, to witness a need of rethinking the promotion of consumption cigarettes, by developing alternative spaces, outdoor, which comply with the law,” KeysFin analysts said.
The tobacco industry in Romania was severely hit by all the restrictions imposed in recent years. According to the Trade Registry and Finance Ministry data, the turnover of cigarette producers and retailers in Romania halved in the last four years from RON2.26 billion in 2010 to RON949 million in 2014.
Nevertheless, the sector’s profitability followed a completely different trend. While the 15 companies registered in Romania reported a profit of RON31.4 million in 2010, in 2014, the 17 companies which reported financial data announced a level of profitability of RON48.8 million.
According to KeysFin’s analysts, this situation can be explained by developments in the price of cigarettes and measures for business efficiency, taken by producers and traders in the last 4 years.
KeysFin analysis show that the major tobacco companies in Romania are JTI International Manufacturing SA, British American Tobacco, Philip Morris Romania SRL, China Tobacco International and Ital Rom SRL.
The tobacco industry is the second largest tax payer in Romania after the oil industry.