Bulgarian Tobacco Producers Suspect Tobacco Buyers Cartel

Business | November 13, 2012, Tuesday // 17:47
Bulgaria: Bulgarian Tobacco Producers Suspect Tobacco Buyers Cartel Photo by dariknews.bg

Bulgarian tobacco producers have complained that the start of the purchasing campaign is being delayed despite the fact that the 2012 harvest is of the highest quality for the past 10 years.

Bulgaria's National Association of Tobacco Growers – NAT-2010 explained Tuesday that the purchasing of Virginia tobacco usually started at the end of summer and ended in end-October, while this year it had just begun.

Tsvetan Filev, Deputy Chair of NAT-2010 and Asen Kyuchukov, Deputy Chair of the Association, voiced doubts about a cartel agreement, stressing that five companies were buying tobacco at identical prices.

The two representatives of the Association informed that the Commission for Protection of Competition (KZK) had not been alerted to the matter because the purchasing campaign was showing signs of starting.

Industry representatives claimed that purchase prices were even lower than last year's regardless of the increased cost of electricity, fuel, etc.

Tobacco producers said that tobacco types Kaba Kulak and Burley were purchased at rates of BGN 3.5 – 4.1 per kg and BGN 2.8 – 3.1, respectively, while the real prices were supposed to be BGN 5.1 and BGN 4 per kg, respectively.

As regards Basmi variety group tobacco, the purchase price was BGN 5.5 – 6 per kg compared to the normal rate of BGN 7 – 8, NAT-2010 representatives argued.

Tobacco producers insisted that the discrepancy could not be compensated by the BGN 73 M earmarked for national additional payments in 2012.

Industry representatives called on tobacco buying companies to take into account the quality of the harvest, threatening to declare a "zero year" if their calls remained neglected and purchase prices were not increased.

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Tags: tobacco producers, tobacco, National Association of Tobacco Producers, cartel agreement, Commission for Protection of Competition, KZK
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