The tobacco market in Bulgaria: A landscape report

This study assesses the current state of Bulgaria's tobacco economy and analyses its recent trends from the viewpoint of tobacco control. First, it examines the national supply of tobacco and tobacco products along the value chain: farmers, processors, a cigarette factory and retail employment. Next, it analyses the demand for tobacco products in a country with particular consumption habits and elevated prevalence rates coinciding with a substantial increase in tobacco affordability in the last decade. The study examines Bulgaria’s tobacco tax structure and the revenue generated from tobacco taxes. A macroeconomic model that utilised data on cigarette consumption, disposable income and cigarette prices yielded coefficients of -0.81 for the price elasticity of cigarette demand and 0.59 for the income elasticity of cigarette demand. Among the recommendations for strengthening the national tobacco control policy, the annual inflation indexation of the tobacco excise rates warrants attention.

Keywords: Excise, Taxation, Tobacco, Smoking

JEL classification: H23, I12, I18, L66

Countries covered: Bulgaria

The study was first published by the Smoke-Free Life Coalition in Bulgaria.