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BAT Says East Europe Currency Slide Will Fuel Tobacco Smuggling  

The plunging values of some Eastern European currencies probably will lead to more cigarette smuggling as tobacco becomes cheaper in those countries, British American Tobacco Plc Chief Executive Officer Paul Adams said.

“There is a real danger that illicit trade will increase,” Adams said on a conference call today. He added that cross-border shopping has increased between Germany, Poland and Ukraine. “There is a fear that depending what happens to exchange rates, there will be an increase in contraband, in central Europe particularly.”

Smuggled and counterfeit cigarettes cost governments worldwide about $20 billion in lost tobacco tax, according to the London-based maker of Kent and Pall Mall cigarettes. Ukraine’s currency has lost 40 percent of its value against the dollar in the past year and the Polish zloty has declined 35 percent.

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