JTI declares about the risk of counterfeit cigarettes increase in case of expansive growth of excise tax
Expansive growth of excise tax on tobacco products in Georgia country increases risk of counterfeit products appearance. All the more, in neighbor Armenia is not planned increase of excise tax rate what will increase the difference between prices on cigarettes even more in retail net of Georgia and Armenia.
Corporate Affairs and Communications Director in Caucasus at Japan Tobacco International (JTI) - Nikoloz Mchedlishvili considers that when developing measures of tobacco control is important coincidence with excise taxes of neighbor countries with the goal of minimizing appearance of situation that stimulates border trade and risk of contraband.
"For today in Armenia the price of cigarettes is lower as compared to Georgia. For example, one pack of Winston cigarettes in Armenia costs 90 cents but in Georgia - 1.2 USD. From September after excise tax increase by 25 %, price difference will be even higher, it increases the risk that cigarettes will be illegaly imported from Armenia what will reduce budget revenue" - considers Nikoloz Mchedlishvili. According to his opinion excise tax on tobacco products should be increased gradually what will ensure keeping of availability and stable increase of taxes.
JTI-Caucasus offers authorities collaboration in order to avoid illegal trade.
JTI already introduces in the Companies that they own new system for controlling their products TRACK & TRACE. Particularly each carton of cigarettes and external pack will have special bar-code that will provide the Company and controlling authorities with opportunity to control process of cigarettes' transportation and selling manufactured by Company but it will further identification in the net of counterfeit products.
It is remarkable that Georgia receives JTI products: Winston, Mevius (Mild Sevel), Camel, Sobranie, Glamour and LD from Ukraine. Factory, equipped with modern technology produces 25 billion cigarettes a year. During the manufacturing process products go through quality control in few stages.
According to decision of Georgian government, increase of excise tax on cigarettes by 25 % is planned from 1st September 2013.