PARI DAILY: BULGARTABAC CASE WILL BE THE FIRST TEST FOR THE NEW KING`S GOVERNMENT

Views on BG | June 25, 2001, Monday // 00:00| Views: | Comments: 0

AFTER Bulgaria was kicked out of the huge Soviet tobacco market by estern tobacco companies, following the 1989 events, the evaluation
of the company has been permanently declining.
From a company, whose exports exceeded domestic sales 5 times,Bulgartabac was reduced to the domestic company it is today. The loss of the markets in favour of the western rivals is the only reason for which it has not been privatised until now. The perspective for Bulgartabac is to be sold out in pieces for coins. One of the strongest Bulgarian companies was left without strategy and today it lacks even a distribution network. It sells products to middlemen at its entrance door, instead of making a little effort to build a distribution on the domestic market. Only 34 companies have been licensed to buy cigarettes, but many more buy and then
distribute the products though their own networks, reaping millions of dollars.
Any of the governments in the last ten years had to ignore its interests by privatising what has been left of Bulgartabac. The Bulgartabac Holding AD is currently a structure possessing several
buildings, the rights on the trade marks on the Bulgarian market and the Plovdiv-based Tobacco Research Institute. Here we come across
one of the most striking paradoxes. Why is it so, that one entity produces a product, another entity holds the trade mark right on the
same product? No investor will be willing to buy a manufacturing entity, which has no rights on the trade mark of its own product. The Bulgartabac privatisation will be test for the government of the NMS II. If the Movement appoints its own people at the distribution exits, it will do just what the previous governments have been doing so far. If NMSII want to preserve the ruins of the Bulgarian tobacco industry and revive it, it should give the chance
to the cigarette makers to build their own distribution networks, to get up on their feet again and to start making profits . Only after
this stage they could be possibly sold for a decent price.

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