Azerbaijan, Baku, Feb. 7 / Trend N.Ismayilova /
Azerbaijan is considering the possibility of reducing the volume of imports of tobacco products by increasing local production, Deputy Agriculture Minister Bahram Aliyev told Trend.
"Demand and prices for tobacco products on world markets are growing, but we are not considering a significant increase in production volumes, because tobacco is harmful to human health. However, we have ideas for increasing local production areas to compensate for the decrease in imports," he said.
The price increase on tobacco products at 0.15-0.2 manat for a pack of imported cigarettes in Azerbaijan since the beginning of 2011 is associated with external factors. Given that Azerbaijan provides only 50 percent of the needs in tobacco products at the expense of domestic production provides, the price increase in world markets affects the production imported by the country.
The total demand in the local market for cigarettes is about 10 billion pieces of cigarettes, or 900,000-1.1 million boxes, each with 500 packets of cigarettes, per year, while 2,600 tons of cigarettes were produced domestically last year.
Due to the rapid economic development and the population's growth in terms of prosperity, the Azerbaijanis have shown preference towards global brands for many commodities. This applies to alcoholic beverages, cigarettes and other tobacco products, motor vehicles etc. Azerbaijan imports cigarettes mainly from Russia, Britain and the United States.
Meanwhile, due to maintaining low prices for cigarettes based on the availability of local tobacco products, importers of foreign brands of cigarettes may not significantly inflate their prices in Azerbaijan.
European Tobacco Baku is the sole producer of cigarettes in Azerbaijan. The company exports its products only in the free economic zones like Dubai and Turkey, due to the increase in the number of tobacco companies in other countries.
Annual production and sales of European Tobacco in the domestic market is around 240,000 -270,000 boxes.
European Tobacco Baku was privatized in 1999 by Sorex Management Incorporated. The right of ownership over the 92.5 percent stake in the tobacco plant was transferred to the investor in 2000.