The setting of a 30 percent mark-up for cigarettes proposed by MP Oleh Kanivets will affect all tobacco market players, British American Tobacco Ukraine has said.
“The size of mark-up is subject to agreement between economic entities which does not require regulation by the state. The state regulation of this indicator could affect all market players,” corporate manager at British American Tobacco Ukraine Iryna Kurinna told Interfax-Ukraine.
Imperial Tobacco said that the initiative of fixing the mark-up for tobacco at 30 percent is anti-competitive, which is lobbying for the business interests of large tobacco chains.
“The initiative puts cigarette producers in unequal conditions of doing business compared to producers of other FMCGs, creating preferences for retain tobacco chains. The 30 percent restriction of the upper retail price is absolutely not a reasonable figure. 30 percent is four times higher than the existing mark-up and almost 10 times higher than the average European indictor,” public relation manager at Imperial Tobacco in Ukraine Natalia Mykolayenko said.
She said that according to the minimum calculations if the draft law is passed, a large specialized chain with 100 stores would earn an additional Hr 2.5 million a month, and the expenses will be passed on to the consumer.
As reported, has proposed that the size of upper retail prices of tobacco is calculated taking into account a 30 percent mark-up. The requirement is stipulated in draft law No. 4233A on amendments to the law on the state regulation of production and turnover of ethyl, cognac and fruit spirit, alcohol and tobacco registered in the parliament on July 3, 2014.
Ad valorem tax of 12 percent applied to the upper retail price of cigarettes in Ukraine.
