JTI pays 10 million euro to ''bring cigarette packages to life''

The Health Ministry in Romania proposed a series of 14 pictograms, representing lung diseases and people sick or dead because of smoking, which have to be visible on all cigarette packages as of 2008.  

‘‘According to our estimates, the cost of changing packaging will amount to €600-800 million for each assortment,’‘ Gilda Lazar, Corporate Affairs Manager at JTI Romania, told Business Standard.

JTI was the first international tobacco company which invested in Romania, in 1993, and is currently one of the main cigarette producers in Romania. JTI Romania sells brands such as Camel, Salem, Winston, Monte Carlo, Winchester, More, Sobranie, Ronson, Sovereign, Saint George, LD and Smart.

The Romanian cigarette market is worth about €1.4 billion and will reach €1.7 billion before the end of 2007. Main players are British American Tobacco, with a 37.15 percent market share, Philip Morris, with 29.52 percent, JTI, with 24.05 percent, and Gallaher with a 5.54 percent market share. The international cigarette producer Gallaher was acquired in 2007 by JTI. The newly-formed company will keep the name of JTI Romania, according to Gilda Lazar. ‘‘Together, JTI and Gallaher have a 29.59 percent market share, placing our company second on the market,’‘ said Gilda Lazar.

JTI Romania posted RON 239.39 million (approximately €75 million) worth of net sales in the first quarter of 2007, a 26.5 percent increase from Q1 2006. Last year, the company had net sales worth RON 950.6 million (about €300 million), and RON 794 million (some €245 million) in 2005.The sin tax brought revenues worth €150 million in the first five months of 2007.

This figure represents 35 percent of state budget revenues from excise taxes on alcohol and tobacco products, which totaled RON 1.35 billion (some €0.41 billion), according to data supplied by the Ministry of Economy and Finance. 

Cigarette prices have been increasing since the beginning of 2007, following a decision by producers to raise these gradually to make the July tax increase easier for consumers to bear.  There have already been two price hikes in the January-June period, and the total price rise for cigarettes in 2007 will amount to RON 0.7 (about €0.21), added Gilda Lazar.

On average, Romanians smoke 1,392 cigarettes per capita, according to statistics provided by the World Health Organization (WHO), while per capita consumption in Bulgaria and Hungary amounts to 2,793 and 2,152 cigarettes, respectively.