ZAGREB, 13 June, 2021 - An estimated potential loss for the Croatian budget due to the illegal tobacco market in 2020 was HRK 1.4 billion, according to findings of a survey conducted by the Croatian Employers' Association (HUP) and the Ipsos pollster.

The findings of the survey, conducted on a representative sample of 1,344 households with a total of 3,299 respondents, show a marked share of untaxed cigarettes and tobacco products used by consumers.

As many as 28.1% of adult Croatians are tobacco consumers, and 17% of tobacco products consumed in a year are illegal products, with illegal cut tobacco accounting for the largest portion.

As a result, in 2020 Croatia lost 1.4 billion kuna in tax revenue due to tobacco smuggling, HUP main economist Iva Tomić said last Wednesday at the presentation of the survey's findings.

Nearly 3 in 10 Croats aged over 18 are smokers

Davor Tolić of the Ipsos pollster said that 28.1% of adult Croatians consume tobacco products and they mainly smoke cigarettes, followed by cut tobacco.

The consumption of e-cigarettes, cigars and pipe tobacco and cigarillos amounted for less than 1% of the total consumption.

(€1 = HRK 7.5)

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ZAGREB, 12 May, 2021 - During a visit on Wednesday by Prime Minister Andrej Plenković to the British American Tobacco (BAT) factory in Kanfanar, BAT revealed an investment of HRK 200 million in the production of a new category of heated tobacco products (HTP), underlining the importance of the new logistics centre in Rijeka.

"By expanding production in Kanfanar and opening a hub in Rijeka, we are continuing with BAT's significant investments in Croatia. With the introduction of production lines for new product categories, Croatia is additionally strengthening its position on the global map of production sites in the tobacco industry. We are continuing to expand our selection for consumers in Croatia," BAT Adria director Zvonko Kolobara said in a statement to the press.

He added that the increased capacity in Kanfanar would help BAT meet growing demands for HTP in Europe and northern Africa.

Kolobara thanked the government and Prime Minister Plenković for their efforts in creating an investment climate that stimulates further investments.

Plenković expressed satisfaction that BAT is continuing with its investments in Kanfanar and ensuring jobs. BAT's announcement of the investment comes after its announcement that it could leave Croatia due to unfavourable business conditions.

Plenković underlined that the new investment was an example of a good business climate and that BAT did not exert any pressure on the government to meet its demands to continue doing business in Croatia.

"The new, HRK 200 million investment in new products means a new impetus, enthusiasm and a new generator of business and with that, a contribution to Croatia's economy. The company employs 1,600 people and another 800 cooperate closely with BAT and make a living that way. The investment plans have been coordinated with their headquarters in London and all the employees at the factory will be satisfied while the entire economy of Istria County will benefit from BAT's operations," said Plenković.

He noted that the government was open to large global investors.

"It is excellent that BAT has established a hub in Rijeka for products from China that are distributed throughout Europe. That is additional confirmation of Rijeka's attractiveness as an exceptionally important transport and commercial port in the country. As far as BAT's staying is concerned, the government took account of the Croatian economy and creating conditions for all foreign companies doing business in Croatia and investors to have the same treatment. It is obvious that BAT has decided that the Kanfanar factory is important and that it wants to invest and that Croatia is important to it. There was never any pressure," said Plenković.

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August 31, 2020 – From October, you'll only be able to bring 2 packs of cigarettes or 50 grams of tobacco into Croatia from countries outside the EU, say new proposals. Day trips across the Bosnian or Serbian border for cheap smokes will be a lot less cost-effective.

Croatians who smoke and who live within easy driving distance of the Bosnian or Serbian border have had it good for quite a while. They've been able to skip across to the other side, pick up their smokes for the week, and save a lot of money by doing so.

This wasn't really illegal, but these golden days will be over from October 2020. Under new proposals, you'll only be able to bring 2 packs of cigarettes into Croatia from any non-EU country. The new proposals reduce the amount previously considered personal luggage by five times. You can currently carry 10 packs (200 cigarettes) across the border. 2 packs (40 cigarettes) is considerably less and will make the journey much less cost-effective.

The new proposals also extend to rolling tobacco in the same percentages. Instead of the current 250 grams of tobacco you're currently permitted to bring into the country from outside the EU, the amount will be reduced to just 50 grams.

Annual cigarette consumption in Croatia is a lot bigger than 2 packs of cigarettes. It is estimated at more than 300 million packs. The latest estimates say that around 7% of consumption uses non-taxable cigarettes. Such non-taxable tobacco products usually carry the tax stamp of Bosnia and Herzegovina, sometimes Serbia, and sometimes no stamp at all. This non-taxable section of the total is estimated to be worth between 500 and 600 million kuna.

Last year, the Croatian state budget collected 5.11 billion kuna from tobacco excise duties. In more than 16.2 billion of total excise revenues, only those from petroleum products are higher.

Although it is calculated that smoking in Croatia is decreasing in popularity, thanks, in part to anti-smoking health campaigns and rising prices, state revenues from tobacco excise duties have actually grown over the past five years.

Between excise duties and VAT, the Croatian state budget collects close to six and a half billion kuna from the sale of cigarettes and tobacco. This is almost 8% of the total tax revenues of the state budget.

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ZAGREB, October 25, 2018 - Finance Minister Zdravko Marić announced on Thursday an increase in excise taxes on cigarettes in Croatia, as a result of which cigarette prices would go up by up to two kuna by the end of the year.

While the price of alcohol and cigarettes have shot up, costs relating to the healthcare service have increased alongside them.

Welcome news for Croatian tobacco producers as a new law being prepared will enable them to organise their sales themselves.

The announcement was made by the Finance Minister following the need to adjust to EU tobacco taxing directives