Bulgaria's largest tobacco producer Bulgartabac Holding (BH) is trying to stabilise its share on the domestic market and to increase exports, while awaiting a political decision on its future.

BH is currently listed for privatisation, Bulgarian language daily Dnevnik reported on October 22. Unlike previous attempts, the difference this time is that since the beginning of 2007 the cigarette market has been liberalised and local factories are competing with big multinational companies.

Economy and Energy Minister Petar Dimitrov said a decision on the privatisation would be announced after the October 28 municipal elections. It is not yet clear whether the state Privatisation Agency would offer investors the whole holding, would sell separately the factories and production would be concentrated in one factory, which could remain state-owned.

BH management's initial intention was to list on the stock exchange the four factories in Sofia, Plovdiv, Stara Zagora and Blagoevgrad. However, for this to happen, changes were needed to the Privatisation Act, and the Cabinet has not yet approved such changes.

BH suggested that increases in excises be put into effect in three stages - equally for every year to 2010. If the Finance Ministry approves this proposal, the price of Victory cigarettes would go up by about 0.50 leva. BH executive director Hristo Lachev said that in 2008 the company should aim at preserving its market share but not at profits.

Market analysis shows that BH holds about 70 per cent of the domestic market.

"In the past four months there has been stabilisation of the market share and we think that it will stay at the same level to the end of the year," Lachev said.