[Intl-tobacco] Iran: 35bn Cigarettes Smuggled Annually

[Robert Weissman]

35bn Cigarettes Smuggled Annually
by TEHRAN TIMES ECONOMIC DESK
Source: Tehran Times, Sunday, 8/12/01

TEHRAN Based on statistics published by the Health Ministry, about 30 to
35 billion cigarettes, worth $1 billion are being smuggled into the
country every year, announced the Managing Director of Iran Tobacco
Company (ITC), Abbas Khaje-Piri on 5 August 2001.

 Mr. Khaje-Piri added that 15 billion cigarettes are produced
domestically, earning Rls900 billion ($112.5 million) for the country. The
official noted that 40 to 45 billion cigarettes per year are consumed in
the country. He referred to smuggling as one of the major problems of the
country's tobacco industry.

 Mr. Khaje-Piri said that although the police are in charge of halting the
illicit trade, certain problems and wrongheaded policies have weakened
their efforts. He noted that 800 million contraband cigarettes were
uncovered last year (ended 20 March 2001) with road transit being the most
common smuggling route.

 The official said that increasing domestic production and competitiveness
with foreign brands is one way of crimping smuggling.

 The official said the abundance of the smuggled product in the market
plus the Rls600 (8) tax on each packet of domestic cigarettes have hurt
the competitiveness of domestic brands.

 He noted that based on industry projections 26 billion cigarettes should
have been produced in 2000 but because of the above-mentioned problems,
only 15 billion were made.

 Khaje-Piri further added that drought reduced the tobacco crop by 30%
during the last two years.