– Today the Cabinet of Ministers and the power structure in general is changing in Moldova, and the predictability of the political course is very important for investors. How do you assess the election results and the political situation?
– For us, as a Western investor, the key factor is the consistency of the European vector. The electors voted for the continuation of the path chosen four years ago, we perceive it positively and believe in Moldova’s European future. This is the basis for business stability and business process planning.
– Philip Morris is a major investor: over the last 5 years you have invested over 43 billion euros in the EU economy. What are the investments in the Moldovan market?
– The EU region is really very important for PMI, and in our organization Moldova belongs to this region. I would like to point out that the investment of 43 billion euros in the EU economy has led to an economic impact of 290 billion euros. In five years, from 2019 to 2023, PMI has contributed to the creation of 1 million jobs, invested €19.6 billion in suppliers (SMEs) and €2.3 billion in research and development to stimulate innovation and scientific progress in the region.
We are expanding and continuing to invest in the Moldovan market. In the last two years alone, we have managed to launch local production, introduce the latest version of the IQOS Iluma tobacco heating device to our smoke-free portfolio, and this year we introduced the new Iluma i version.
To support and serve consumers, we opened another brand store in Chisinau and have expanded the infrastructure. In the smoke-free category alone, our investments over the last two years amounted to about $3 million.
We also continue to expand our team and develop partnerships with local companies. In total, we cooperate with 580 organizations (distribution, rental of premises, consulting, printing, waste collection and recycling), and our payments under these contracts exceeded 430 million lei last year.
I would like to mention that in 2024 we paid about 2.6 billion lei in taxes (including excise and VAT). This is about 40% of all revenues generated by the tobacco industry in Moldova. That is why we maintain our position as the market leader both in terms of volumes and investment activity.
– What are the current global trends, and how are investments in the smoke-free product category materializing?
– We are seeing growth in almost all 100 markets where PMI with the smoke-free category is present, but the key region for the company is Europe. It has become the “engine” of our transformation: in a number of countries in the region, 70-80% of our revenue is already generated by smoke-free products, and globally their share has reached about 41%. This is also reflected in our production base: today only 4 out of 19 production facilities in Europe produce cigarettes. The company is actively developing, opening new lines for alternative products, including nicotine pouches. This is the “re-industrialization” of the tobacco business: investments, jobs, exports.
– With this approach, is Philip Morris ready to give up its legendary Marlboro for IQOS?
– We explicitly say: all cigarettes should take their place in a museum. It’s a natural evolution. Already now, revenue from smoke-free products exceed Marlboro sales on a global level.
– If you compare our market with Romania, Ukraine, Poland, etc., what are the fundamental differences?
– Consumers everywhere are similar: if they have access to information and choice, they switch from cigarettes to alternatives that do not burn. The difference in Moldova is in the regulatory policy: it has some of the toughest restrictions in Europe. The legislation prohibits virtually any form of communication with consumers. We cannot call a store “IQOS”, although it is a registered trademark. In most EU countries, including neighboring Ukraine, such things are allowed. In Moldova, the consumer’s access to information about alternatives is limited, which ultimately, in our opinion, affects the informed choice and affects the efficiency of investments.
In addition to the ban on communication, Moldova has a ban on some smoke-free products, including nicotine pouches. The nicotine industry today is much broader than it was 5-10 years ago. In Europe, there is a whole range of legal products such as heating tobacco, e-cigarettes, nicotine pouches, to which smokers are switching. And the fact that these alternatives are banned in Moldova raises a big question.
– Why is this surprising to you? “The less tobacco, the healthier the nation…”
– Because the actual effect is the opposite of the declared goals. For example, in Sweden nicotine pouches have existed for more than 50 years and there is the lowest level of smokers in Europe: according to the Eurostat – less than 5% against 25%, on average, in the region. In our country, this product is banned, so the consumer is deprived of choice, the state loses its tax base, and the economy loses investments and jobs. For comparison: even in my native Ukraine, where the category of nicotine pouches is still small, in 2025 the budget will receive about 16 million euros in excise taxes. When legal players leave, demand goes into the shadows, which means quality risks and zero traceability.
Regarding “health of the nation,” the percentage of smokers is much lower in most EU countries that do not have such strict restrictions. According to the WHO, Moldova is one of the few countries in Europe where smoking rates continue to rise. This is a signal: excessive restrictions with a lack of balance in communication do not achieve the stated goals.
– What is the situation with illegal trade? Is the shadow market in Moldova growing or falling?
– According to IPSOS research, the level of illegal cigarette trade in April-May 2025 amounted to 7.9%, decreasing by 1.9 p.p. compared to September-October 2024. Cigarettes of unknown origin (3.8%) most often fall into the shadow turnover. The share of cigarettes without excise stamps is another 3.4%. The trend is positive for legal business and the state: it is close to the European level of 5% and proves the effectiveness of fiscal state policy.
– So Moldova’s excise policy is correct?
– Yes, consistency is the key element. When the total market volume is falling (about 4-5% per year), the budget revenues from tobacco grow by about 10%. When excise rates are raised gradually and predictably, it does not provoke a price shock for a legal product and does not push consumers into the shadows. We expect the practice of a three-year excise calendar to continue: the current rates are approved until the end of 2026, and it is important to adopt the next schedule for at least three years in advance. The most acceptable benchmark for the rates is inflation and nominal income growth: if incomes grow by about 10%, a comparable step in excise rates is economically justified.
– In 2023, you placed the production of key cigarette brands at Tutun-CTC. How do you assess this partnership now?
– It is successful and aligns exactly with our expectations. The quality of the products meets PMI global standards and the positive feedback from the consumers prove that we are moving in the right direction.
We continue to invest in our partnership. For example, in April 2025, our company, together with Tutun-CTC, completed the installation of equipment for the Track and Trace tobacco tracking system, which provides full traceability of finished goods from the point of production to the retail level. This will allow to effectively control the product at the point of sale and be sure that the revenues reach the state budget. The equipment installed and infrastructure created brings us closer to state regulation of “Track and Trace”. The next step is for the regulator, with the preparation of technical aspects for the launch of the national system and its testing.
According to the regulations adopted in 2023, 36 months were allocated for the implementation of “Track and Trace”, of which one year was allocated for the development and publication of the Technical Regulation, and two years for the implementation of the project. However, the whole process has taken longer than predicted. The launch date set for early 2026 is not quite realistic, so we are asking the authorities to bring it forward by a year – focusing not on the calendar date, but on when the specification was received, plus 12 months, leading to the start of 2027. This will improve the quality of project implementation and the efficiency of system operation.
– What brands do you already produce in Chisinau and why them?
– The Moldovan factory produces Marlboro, L&M, Chesterfield and Bond – the most marketable brands in our portfolio. We had a strategic goal – to gradually transfer to local production all formats that can be produced on the equipment – brand by brand, without imported exceptions. This shortens supply chains and increases the speed of reaction to changes in the market.
– Are you planning to export to the nearest countries or are you targeting the local market?
– At the first stage we need to cover the local demand in a stable and qualitative way, refine processes, retrofit production, implement “Track and Trace”. At the same time we are finalizing the analysis of export scenarios: the Moldovan market is small, and it is logical to look for scaling up through export, but this is a question of tariffs, agreements and logistics. We are working in this direction – we are analyzing all the components of this process. Tutun-CTC’s production capacity allows us to significantly increase volumes, and our positive experience of production for the local market shows that the factory meets all international quality standards.
– Coming back to your special date. What has been fundamentally important for you during your 30 years on the market?
– It is not just a period of time: in fact, it is the whole history of independent Moldova. We have gone through different cycles and crises together with the country and today we are more than sure that we want to continue investing – in localization and modernization, in smoke-free products, in infrastructure and people. The bet on Moldova was the right one, and the European course confirmed by the country only strengthens our confidence in the future.
