JTI asks Lower House to reject anti-tobacco law initiative as harmful to legal market & state budget

Representatives of tobacco company JTI are calling on the Chamber of Deputies to reject the anti-tobacco legislative proposal PL-x 587/2019 for amending a set of tobacco product regulatory acts, arguing that the ban on the display of cigarette packs "harms the legal market and the state budget".

"Among others, the initiative provides for a ban on the display of tobacco products in stores, on sponsorships by tobacco companies of all events and activities, on smoking in public places, etc," the document reads.

In the official letter sent today to the Chamber's Budget & Finance Committee, JTI cautions that "hiding cigarette packages in cabinets, except for shops specializing in the sale of tobacco products, such as tobacconists - a category that is limited to only a few stores in major cities out of a total of about 70,000 that also sell cigarettes - will pave the way for under the counter sales of smuggled or counterfeit products inclusively, a practice that is already widespread in neighborhoods, small towns and rural areas."

The JTI representatives explain that a similar amendment was rejected by the European Parliament plenary at the adoption of the Tobacco Products Directive 2014/40/EU transposed by Law No. 201/2016.

"The same proposal was rejected by the Parliament of Romania in 2016, as it was deemed to distort the market and create significant barriers to the entry of new brands on the market, as the point of sale is the only place where the brand can be made known to consumers, a standpoint that was also shared by the Competition Council," the statement reads on.

According to Eurostat, Romania is the EU's third-largest tobacco producer. The country's tobacco industry is the second-largest contributor to the state budget, with about 3.2 billion euros annually, and also counts to the top investors, with ongoing investments of over 1.5 billion euros; direct employees stand at 5,000-plus and indirect employees are about 60,000.

According to the latest announced budget execution, revenues from tobacco excise duties registered a significant advance of 40.34 percent in the first four months of 2020 (year-over-year).

JTI started its activity in Romania in 1993 under the name of R.J. Reynolds, and was one of the first multinational companies to invest locally.