Hungarian tobacco growers are sounding the alarm: tax increases, black market and uncertainty are squeezing the sector

By: Trademagazin Date: 2025. 08. 29. 10:54

🎧 Hallgasd a cikket: Nyelv: Sebesség: 1.05×

Domestic tobacco growers are in an alarming situation: while demand in the European Union is stable and growing, in Hungary it is becoming increasingly difficult to make a living due to tax increases, the strengthening of the black market and the uncertain regulatory environment. According to the farmers, if quick and well-considered decisions are not made, tobacco growing could become a symbol of survival. At stake is not only the income of the growers, but also the future of thousands of rural families and entire settlements – writes Index.

Ófehértó: consultation held in the traditional center

The National Association of Hungarian Tobacco Growers (MADOSZ) held a consultation in Ófehértó, where growers, members of parliament and the Ministry of Agriculture were also represented. Tamás Tarpataki, Deputy Secretary of State responsible for the agricultural market, highlighted that in addition to the good quality and high content of Hungarian tobacco, the sector’s role in creating jobs is also decisive. About 11,000 people work directly on tobacco fields, so the sector plays a key role in the rural population retention power.

However, cultivation requires large investments, while weather extremes and European regulatory tightening also make operations difficult. Since 2020, the government has been trying to prevent land abandonment with various programs, and subsidies primarily focus on employment.

Tax increase: breeding ground for the black market

The biggest problem is the intertwining of excise tax policy and black trade. The European Commission has proposed a drastic tax increase to curb consumption, but in practice, smokers do not quit, but rather turn to cheaper, often illegal sources.

The size of the black market in Hungary is currently around 15 percent, but during the tax increases after our accession to the EU, it already climbed to 27 percent. According to Continental, another large increase could even double the share of the black market. In the current situation, the tax is 1,550 forints out of the 2,000 forints price of a legal cigarette, while a pack can be purchased on the black market for 1,500 forints, tax-free.

The extra profits of illegal operators are staggering: they can earn 15 million forints per hour with a single packaging machine, and the EU proposal is estimated to increase this amount by another 10 million. “This would not only cause a budget deficit, but also a social shock, which would lead to a wave of layoffs from farms to factories,” the tobacco company warned.