TIRANA, Nov. 30 – More than a decade after the closure of the last tobacco manufacturing plant in the country, an Albanian-owned company has opened a new plant in the northern region of Shkodra, known for its massive tobacco cultivation.
The modern technology plant at the Gur i Zi village, an investment of Albanian-owned IGLA company, collects, processes and packages tobacco at a capacity of 1,000 kg a hour, being one of the Balkans’ biggest.
The company previously engaged in cigarette rolling paper will also serve to producers in the Elbasan region, central Albania, where tobacco is also massively cultivated.
The plant employs some 20 people from the local area.
“The investment will have a positive impact on the increase of collection and manufacturing capacities which will also benefit the Cerrik area [central Albania] by processing part of the tobacco produced in that area,” said Economy Minister Milva Ekonomi.
The company produces for several European markets including Italy.
Currently, the country’s main tobacco producers are offered average prices of 220 lek (€1.6)/kg, which is 60 percent lower compared to what farmers in Greece or Bulgaria are offered for the same quality of tobacco, the country’s Competition Authority has unveiled following a probe into Greek-owned Mika Korà§a company which has been operating under monopoly conditions as the country’s sole collector of domestically produced tobacco. The price offered for one kilo of tobacco is even lower compared to the average price of a 20-cigarette pack in the local market.
Once a huge tobacco producer under communism with several local brands, Albania has had no tobacco manufacturing plants since more than a decade.
Domestic tobacco production during the past decade has ranged from 900 tonnes in 2007 to 3,000 tonnes in 2014, when it met 38 percent of the country’s needs, according to data published by Open Data research centre.
Tobacco importers say there has been a shift toward hand-rolled unprocessed tobacco which is mainly sold on the black market and mostly produced in the mountain areas in the northern region of Shkodra and the central Albanian region of Elbasan.
In its 2017 fiscal package, the government has proposed the excise rate on imported tobacco will remain unchanged but sharply reduce by 45 percent to 2,500 lek/kg (€18) for domestically produced tobacco. Earlier this year, the government set a maximum tax-free quantity of 25 kg of domestically produced tobacco for personal use.
The measure comes in a bid to discipline the market by offering lower taxes after police have often seized illegally sold domestic tobacco from street vendors in the past couple of years.
The cigarette excise rate has been kept unchanged for next year, following consecutive annual hikes in the previous years, sharply reducing tobacco imports and leading a considerable number of smokers to shift to cheaper hand-rolled domestically produced tobacco, commonly traded informally. The excise rate on a 20-cigarette packs currently stands at 110 lek (€0.77) while retail prices for the most popular brands range from 200 lek to 300 lek (€1.4 to 2.1) per packet.
