HUNGARY
State tobacco monopoly spurs black market

Trade in illicit cigarettes is booming after the government established national tobacco shops six months ago, a move that slashed the number of stores and cut availability of legal outlets for many smokers, according to AFP.

Only 5,300 shops were allowed to join the new state monopoly, compared with 42,000 licensed cigarette outlets doing business prior to last July, the news agency said.
Cutting the number of shops by 90 per cent has eliminated outlets in many sparsely populated areas of the country, which AFP said is another inducement to buy black market goods. Critics say the government monopoly is a tool to put money in the pockets of ruling party supporters by creating lucrative concessions, AFP said.
Anecdotal evidence from black marketeers who spoke to the news organisation and an increase in cigarettes confiscated by the government indicate illicit trade has grown considerably. Confiscation through 10 months of this year at 85 million sticks is more than 68 million sticks reported for all of 2012.

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