UKRAINE
The Ukrtiutiun Association has warned that cigarette manufacturers are considering the possibility of reducing their investment programs in Ukraine in connection with the establishment of a trade margin on cigarettes.
In a letter to President Volodymyr Zelenskyy, Ukrtiutiun asks Zelenskyy to apply the veto to bill 1049, which provides for the regulation of the trade margin on cigarettes. and return it for reconsideration.
According to the association, the production of cigarettes in Ukraine in the context of the proposed distribution of income between the manufacturer and the trade enterprises becomes economically unjustified. It was also noted that if these provisions come into force, competition will be significantly limited both between manufacturers and importers, and between retailers, the proposed norm will also become an additional factor in the rise in price of tobacco products, and that together with other factors, it will additionally stimulate the growth of illegal trade.
The association also said that by adopting this bill, the Verkhovna Rada obliged manufacturers and importers of tobacco products to sell their products to wholesalers at prices not exceeding 80% of the established maximum retail price, including VAT and excise duty, by January 1, 2021.
The Ukrtiutiun Association believes that the decision adopted by the Verkhovna Rada will lead to an increase in cigarette prices by an average of 18% in 2020.