The Center for the Study of Democracy organised a roundtable on the driving factors and trends in the use of corruption and the illicit market of tobacco products. The roundtable took place on 15 January 2020 and saw the presence of the relevant state institutions: Ministry of Interior, the Customs Agency, the National Revenue Agency, as well as representatives of all of the major tobacco companies. During the event, a review of the corruption practices used in the illicit market in Bulgaria and in the region was made, as well as an analysis of the reasons for the sharp contraction of the share of illegal cigarettes between 2014 and 2019.
Tihomir Bezlov, senior analyst at the Center for the Study of Democracy, presented the latest trends in the illegal market for tobacco products and outlined its contraction in Bulgaria which the end of 2019 reached the lowest level among EU 28. Despite the apparently unfavorable environment, the Bulgarian institutions have managed to set a trend towards a stable decrease of the illegal cigarettes share. Up until 2014, the Bulgarian market was dominated by a local manufacturer, producing the so-called internal illicit whites. However, this dominant position was weakened through the introduction of a permanent physical monitoring of all cigarette factories in Bulgaria. As a result, the illegal cigarettes trade on the local market declined to 3.3 % in the third quarter of 2019. Possible reasons for the contraction of corruption practices were outline within the discussion are: the involvement of several institutions with control functions and capacity in the combat with illegal trade, effectively limiting the possibility for establishing “protection”; a change in the reporting and controlling mechanisms of all institutions involved, with a more comprehensive set of data being gathered since 2014; the “political recognition” in 2015 of the empty pack survey, and priority shift in regional police directorates work toward countering illegal cigarettes trade.
The event was held under the initiative “The ITTP Along the Balkan Route: Addressing Institutional Gaps and Corruption” and is funded by PMI IMPACT, a grant award initiative of Philip Morris International.