The German Reemtsma tobacco concern, one of the largest players on the Polish market, has threatened that unless the government increases import taxes on tobacco then it will ceasing sourcing in this country. The company now has reserves for two years although this new move could give it even more problems with the agricultural sector.
Last year sales of cigarettes were 74.4bn sticks, up from 73.1bn in 2000 but down from 88bn in 1999. Smuggling is believed to account for an extra twenty percent on top of this. Last year the government tried to aid the production of the cancer forming tobacco industry by subsidising it by PLN2.30 per kilo of tobacco that it buys from the producers. The cigarette companies were paying farmers around PLN14 per kilo. This cost the state PLN60m.