Bulgaria is to receive the first three license payments for Russia-made Bulgarian cigarettes by the end of this year under contracts the Bulgarian tobacco giant inked with the Russian association of tobacco distributors Grandtabak in a bid to increase tobacco supplies and tighten control on the Russian market.

This would be the first time that Bulgaria is paid for the production of Bulgarian brands of cigarettes and not tobacco supplies.

The supplies of Bulgarian tobacco are to be restored by the end of this year. In 2004 they are scheduled to overshoot several times the imports from previous years.

Bulgartabac includes twelve processing factories and nine cigarette factories. It also runs five cigarette factories in Russia and one each in Ukraine, Romania and Yugoslavia.

Three world tobacco companies - Phillip Morris, British-American Tobacco and Gallagher - have officially stated their interest in the piecemeal sale of Bulgaria's tobacco monopoly, it transpired last week.

At the beginning of October, the government okayed the new strategy for the privatization of Bulgartabac, which envisages the piecemeal sale of the cigarette production companies and tobacco processing subsidiaries. The move followed the failed bulk deal to sell the tobacco monopoly to a Deutsche Bank-led consortium for EUR 110 M.