OREANDA-NEWS. Belarus' Grodno-based Neman tobacco factory is likely to reduce Belarusian-made cigarette supplies for the inland market in 2014 by 31.7% to 14.9 billion units because of the expansion of the grey market of tobacco products.

A forecast to this effect was made by the National Academy of Sciences' Sociological Institute: Belarus' tobacco market is likely to witness a return of the early 2000's, when the grey market would cause domestic tobacco factories to reduce output.

Neman cut cigarette supplies for the domestic market by 15% in 2013. In Jan-Apr 2014 cigarette supplies reduced by 24% year on year. The tobacco factory struggles to stay afloat by promoting exports. Otherwise they would have been forced to reduce 300 personnel members, Neman General Director Yuri Chernyshev told a press conference.

The tobacco factory fears lest the domestic market should be flooded with smuggled cigarettes.

Neman was founded in 1861 and transformed into a joint-stock company with all shares controlled by the state in December 2007. Neman had its cigarette production quota for 2012 raised to 25.5 billion units.

Production quotas apply solely to cigarettes produced for Belarus' home market, while tobacco goods manufactured under export contracts are not subject to any regulations and are not included into the overall quota.