Japan Tobacco International announced a €300 million investment to build a new, state-of-the-art factory in Ștefăneștii de Jos, marking its next step after more than 30 years of operations in Romania. In a LinkedIn post, JTI said the facility will add nearly 70,000 square meters of production space and feature advanced equipment, 100% renewable energy operations, expanded waste management, and a dedicated water treatment system, underscoring the company’s long-term commitment to sustainable manufacturing in the country.
Tag: Romania
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Romania Fines PM, Two Others, $31M for Competition Violations
Romania’s Competition Council fined Philip Morris Trading and its distributors, Interbrands Orbico and Mediaposte Hit Mail, a total of RON 135.2 million ($31.1 million) for anti-competitive practices in the heated tobacco products market. The authority found that the companies had entered into agreements to fix resale prices for Philip Morris’ IQOS products, restricting competition. The decision is immediately enforceable.
Philip Morris Trading received the largest fine of RON 79 million ($18.2 million), while Interbrands Orbico was fined RON 52 million ($12 million) and Mediaposte Hit Mail the remainder. Interbrands Orbico admitted breaching Romania’s Competition Law and benefited from a reduced penalty. The investigation concluded that resale prices, promotional discounts, and marketing campaigns were set or approved by the supplier, limiting distributors’ ability to independently determine pricing.
Philip Morris Trading denied any wrongdoing and said its activities comply with Romanian law, adding that it is reviewing options to challenge the decision. Competition Council president Bogdan Chirițoiu said the agreements harmed consumers by undermining free pricing and competition, stressing that companies must set their commercial policies independently.
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JTI to Open New Romanian Factory in 2027
JTI Romania announced it will build a new state-of-the-art factory in Ștefăneștii de Jos, Ilfov County, replacing its space-constrained Bucharest plant. Groundwork is scheduled to begin in the coming weeks, with completion slated for 2027.
The Bucharest facility currently exports 75% of its output to more than 70 countries, making it one of JTI’s key European production hubs. Senior VP Philip Livingston said the investment supports JTI’s drive to optimize its global manufacturing footprint, while factory lead Klaus-Walter Thul highlighted continual upgrades since operations began in 1994.
JTI has invested heavily in Romania, including €25m in 2012 and a €60m program launched in 2021. The company employs 630 staff at the Bucharest factory and more than 1,500 nationwide.
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Cross-Border Ring Dismantled, 25M Cigarettes Seized
Officials seized 25 million illegal cigarettes in western Romania and uncovered a connected clandestine factory in Italy in dismantling a cross-border smuggling network. Romanian and Italian investigators, backed by the European Anti-Fraud Office (OLAF), raided a warehouse and nine homes in Romania, in addition to the Italian factory.
“As a result of the investigations carried out, in cooperation with law enforcement authorities from Italy (Guardia di Finanze), with OLAF’s support, the criminal network was dismantled,” the Directorate for Investigating Organized Crime and Terrorism in Romania) said in a press release.
“Additionally, approximately 2,500 boxes of cigarettes were discovered and seized, while a clandestine factory was found in Italy, which was allegedly produced for the European illegal market and operated by Romanian, Moldovan, and Italian citizens,” the police said.
Romanian prosecutors ordered the detention of two people connected to the searches. They are being investigated for “establishing an organized criminal group and smuggling consisting of the collection, possession, transport, receipt, storage, delivery, distribution, and sale of goods or merchandise that must be placed under a customs regime, knowing that they originate from smuggling or are intended for smuggling.” At least six others were also detained.
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JTI Sets up Tech Hub
Image: Zerophoto Japan Tobacco International has established a technological hub in Romania, reports Romania Insider.
The new center will support the company’s global operations with business technology solutions, analytics and cyber security, among other services. JTI has 36 factories globally and eight research and development centers, according to the company.
“The technology hub established in Romania is one of the most important among the six global technology centers established by JTI worldwide and symbolizes our continued strong commitment to the success of Romania,” said Alexander Pitchka, general manager of JTI Romania, Moldova and Bulgaria.
JTI employs more than 1,400 people in Romania, spread across its Bucharest headquarters, its factory, the recently established technological hub and more than 30 sales offices.
JTI Romania also coordinates the company’s activities in Bulgaria and Moldova.
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Industry Laments Romania’s Vape Tax
Photo: E-Potion Tobacco harm reduction advocates are criticizing Romania’s new excise tax on nicotine-free e-liquids and vapes, saying it will discourage smokers from switching to safer alternatives. Vaping companies, meanwhile, fear the increased financial strain will hurt their business.
“This excise tax increases the cost for consumers who are trying to quit smoking by using nicotine-free alternatives. It also places additional financial burdens on businesses like ours that have invested heavily in the vape market,” said a spokesperson for e-Potion, an e-liquid manufacturer and vape retailer in Sibiu, in a statement.
“While we understand the need for regulation, it should not come at the cost of public health.”
E-Potion said will continue to support its customers and help them adapt to the evolving regulatory environment. The company is exploring various initiatives to mitigate the financial burden on consumers who rely on nicotine-free alternatives to quit smoking.
Additionally, e-Potion is partnering with local health organizations to provide educational resources and support for smoking cessation.
Romania has been cracking down on smoking alternatives in recent months. Earlier this year, its Chamber of Deputies adopted a bill banning advertising of electronic cigarettes and nicotine pouches.
In October 2023, the country banned flavored heated tobacco products, in line with the EU requirement.
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Romania Bans E-cig and Pouch Advertising
Photo: xpable Romania’s Chamber of Deputies adopted a bill banning advertising of electronic cigarettes and nicotine pouches this week, reports Romania Insider.
“It is prohibited to explicitly advertise tobacco products, electronic cigarettes, including vape types, products intended for inhalation without burning from tobacco substitutes, electronic devices for heating tobacco, and products intended for inhalation without burning from tobacco substitutes as well as nicotine pouches for oral use (pouches) broadcast within radio and television programs and on public transport tickets,” the bill states.
The bill also bans advertising for these products within educational institutions and healthcare facilities or within 200 meters of their entrances. Advertising is also banned in publications primarily intended for minors and in theaters before, during and after performances intended for minors. Ads are banned that target minors, depict minors consuming these products, suggest these products have therapeutic properties or have a stimulating, sedative effect or can solve personal problems, give a negative image of abstinence or do not contain warning inscriptions in Romanian.
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Romania Bans Flavors for Heated-Tobacco Products
Image: Dancing Man Last month, the Romanian government enacted Governmental Ordinance No. 23/20.07.2023 amending and supplementing the Romanian Tobacco Law (GO 23). The move bans all flavored heated-tobacco products.
The law takes effect on Oct. 23, 2023.
Prior to enacting GO 23 under the framework of Romanian Tobacco Law, only cigarettes and roll-your-own tobacco were subject to the prohibition of characterizing flavors and containing flavorings in any of their components, such as filters, papers, packages, capsules or any technical features.
The aim of GO 23 is to extend this prohibition to heated-tobacco products and to impose more restrictive requirements on packaging and labeling of such heated-tobacco products, according to media reports.
For the first time, GO 23 enacts a legal definition of “heated-tobacco products,” which refers to “a novel tobacco product that is heated to produce an emission containing nicotine and other chemicals, which is then inhaled by user(s) and that, depending on its characteristics, is a smokeless tobacco product or a tobacco product for smoking.”
This definition will include any type of vaping devices that entail heating of tobacco in view of obtaining an inhalable emission containing nicotine and other chemicals.
Heated-tobacco products with any type of “characterizing flavor,” such as menthol, fruits, etc., will no longer be allowed in the Romanian market.
Additionally, each unit of and any outside packaging of heated-tobacco products must carry the mandatory message: “Tobacco smoke contains over 70 substances known to cause cancer.”
GO 23 also states that each unit packet and any outside packaging of heated-tobacco products for smoking must carry combined health warnings that observe all the requirements set out in art.
All producers and importers of heated-tobacco products in Romania must notify the Romanian Health Ministry within 90 days after the enactment of GO 23.
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Industry Concerns Over Romanian Tax Plans
Image: Tobacco Reporter archive Romania’s finance ministry plans to increase excise duties on tobacco and nicotine products this year in addition to the excise calendar that has already been approved, causing tobacco firms concern, according to The Romania Insider.
“The moderate five-year timetable for increasing excise duty adopted less than 12 months ago should have provided the fiscal predictability needed to combat illicit trafficking,” said Jorge Araya, director of the southeast Europe area for BAT. “It should not be forgotten that illicit trafficking also means decreasing revenues to the state budget, financing criminal networks and uncontrolled access to products that do not meet quality or hygiene standards.”
Excise duty was previously increased in April of this year. Excise duties and cigarette prices in Romania are the highest in the European Union in relation to purchasing power.
Araya argues that the tax increases make smuggling very profitable because cigarettes can be bought in neighboring countries at around half the price of those in Romania.
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Romania to Hike ‘Sin Taxes’
Photo: Maksym Kapliuk Romania’s government will increase tobacco and alcohol excise duties as of Aug. 1, aiming to boost public revenue, reports SeeNews. The measure will be followed by a 10 percent tax hike on sugary drinks effective Jan. 1, 2023
The excise duty on tobacco and alcohol has been unchanged since 2015.
The European Union requires member states to impose an excise duty of at least 60 percent of the weighted average retail selling price of cigarettes.
The Romanian government expects the measures to boost budget revenues by RON1.2 billion ($242 million) this year and RON10.57 billion in 2023.