Anti-Illicit Cigarette Trade Initiative Bulgaria Results ... Spark Finance 4.3% CT Hubei Industrial 2.7% JTI 2.0% Unknown 1.6% Imperial Tobacco 1.3% Ray Tobacco 0.9% Monus D.O.O. 0.8%

1

Main Sample

Main Sample: 14 cities > 71,000 citizens / 41.2% coverage of total population

Survey conducted by ACNielsen – following assignment from BAT, BT, ITG, JTI, PMI

2

Focus Sample

Additional Focus Sample: 12 towns mostly in border areas (ranging from 19,400 to

70,800 inhabitants)

6.8% population coverage, not proportional to city size or geographical distribution


3

Main Sample – Non-Domestic Incidence Evolution

14.3% 14.2%17.6%

34.5%

23.3%

15.3%18.0% 18.8%

19.8%

0%

10%

20%

30%

40%

2007 2008 2009 May 2010 May 2011 May 2012 Oct2012

Apr2013

Oct2013


4

Main Sample – Non-Domestic Incidence

Note: All historic non-domestic data has been recalculated using the sticks equivalent of the packs collected, due to the existence of packs with 10 sticks.

Participating / Non-participating companies

13.1%

8.2% 7.1%5.0% 5.2% 4.9%

3.0% 4.0%

21.4%

14.1% 16.2%

15.6%

10.1%13.0% 15.7%

15.8%

34.5%

22.3% 23.3%

20.5%

15.3%

18.0% 18.8%19.8%

0%

50%

2010 Q2(98,251)(5,000)

2010 Q4(95,406)(5,000)

2011 Q2(94,732)(5,000)

2011 Q4(92,474)(5,000)

2012 Q2(91,521)(5,000)

2012 Q4(91,281)(5,000)

2013 Q2(91,948)(5,000)

2013 Q4(93,380)(5,000)

Non-participating companies

Participating companies

N (sticks):

(packs):


5

Main Sample – Origin of Non-Domestic Cigarettes

Growing tendency of DF labeled cigarettes reaching highest level since 2010.

• Unspecified origin – cigarettes packs with no specific market or Duty Free labeling

• Duty Free – cigarette packs with Duty Free labeling

18.1%

9.7% 10.1% 9.8%7.5%

11.7%13.4%

14.8%

11.0%

9.3% 8.8%6.9%

4.1%

2.7%

2.6%2.0%

2.0%

1.7% 1.8%

1.1%

1.6%

0.9%0.6%

0.6%0.4%

0.1%

0.4%0.2%

0.6%0.4%

0.6%

0.7%0.4%

0.6%

3.4%

1.6% 2.5%

2.0%

1.4%

1.5%1.5%

1.2%

34.5%

22.3%23.3%

20.5%

15.3%

18.0%18.8%

19.8%

0%

35%

2010 Q2(98,251)(5,000)

2010 Q4(95,406)(5,000)

2011 Q2(94,732)(5,000)

2011 Q4(92,474)(5,000)

2012 Q2(91,521)(5,000)

2012 Q4(91,281)(5,000)

2013 Q2(91,948)(5,000)

2013 Q4(93,380)(5,000)

Others

Kosovo

Iraq

Serbia

Unspecified

Duty Free

N (sticks):

(packs):


6

Main Sample – Non-Domestic Cigarettes – Share by brand/company

Packs bearing brands registered as TMs for the Bulgarian market by Finansconsult EOOD represent

more than 1/3 of the total number of non-domestic packs

Corsair12.1%

Diva6.7%

Karelia6.5%

Bestman5.5%

Velvet5.4%

Palladium4.5%

Merilyn3.5%

Raquel3.4%

Torro3.4%

My Way3.4%

Eva3.0%

Assos2.8%

Marble2.7%

3 Bohemi Nouveau

1.9%

Muratti1.9%

President1.8%

Ome1.6%

Gracia1.5%

Don1.5%

Famous1.4%

Victory1.4%

Gold Classic1.2%

MM1.2%

Monus1.2%

Marlboro1.1%

The King1.1%

Marlboro (PM USA)1.1%

Marlboro (PMI)

Eve1.0%

Others**15.1%

Finansconsult EOOD 25.2%

Finansconsult EOOD (manufactured by King's Tobacco) 10.1%

R.C. Rodlan Corporation N.V. 10.0%

PMI 9.6%

Karelia Tobacco 8.9%

Spark Finance 7.4%

Bulgartabac 6.0%

Explosal 4.5%

Hongta 3.4%

Unknown 2.4%

BAT 1.8%

Monus D.O.O. 1.8%

Imperial Tobacco 1.5%

JTI 1.2%

PM USA 1.1%

Others

(Tabacus Int'l, TDR, Sekap, Midkismet, Tutun-

CTC, Medditerranean star,

European Tobacco, KT&G

5.10%


7

Main Sample – Non-Domestic Cigarettes – Share by company

R.C. Rodlan Corporation

N.V.27.4%

Karelia Tobacco

18.2%

Finansconsult (manufacturer Kings Tobacco)

8.5%

Finansconsult7.5%

Bulgartabac6.6%

PMI5.8%

Explosal5.0%

Spark Finance4.3%

CT Hubei Industrial

2.7%

JTI2.0%

Unknown1.6%

Imperial Tobacco1.3%

Ray Tobacco0.9%

Monus D.O.O.0.8%

Kaanee / London Tobacco

0.7%

KT&G0.7%

Hongta0.6%

BAT0.5%

Others5.0%

Q2 2013 Q4 2013

The share of the non-domestic packs of each company out of the total non-domestic sample of packs collected

FinansconsultEOOD25.2%

Finansconsult (manufacturer

Kings Tobacco)

10.1%

R.C. Rodlan Corporation

N.V.10.0%

PMI9.6%

Karelia Tobacco

8.9%

Spark Finance7.4%

Bulgartabac6.0%

Explosal4.5%

Hongta3.4%

Unknown2.4%

Monus D.O.O.1.8%

BAT1.8%

Imperial Tobacco

1.5%

JTI1.2%

PM USA1.1%

Others5.1%


8

Main Sample – Non-Domestic Cigarettes – Share by brand

Karelia16.0%

My Way11.6%

Palladium8.7%

Turquoise5.1%

Raquel5.0%

Eva4.8%

Merilyn4.8%

Corsair3.9%

RGD2.7%

The King2.6%

Velvet2.2%

3 Bohemi Nouveau

2.1%

Assos2.1%

Torro2.1%

Famous2.0%

Ome1.7%

LD1.7%

Victory1.3%

Bestman1.2%

Don1.0%

Muratti1.0% Others

16.6%

Q2 2013 Q4 2013

Corsair12.1%

Diva6.7%

Karelia6.5%

Bestman5.5%

Velvet5.4%

Palladium4.5%

Merilyn3.5%

Raquel3.4%

Torro3.4%

My Way3.4%

Eva3.0%

Assos2.8%

Marble2.7%

3 Bohemi Nouveau1.9%

Muratti1.9%

President1.8%

Ome1.6%

Gracia1.5%

Don1.5%

Famous1.4%

Victory1.4%

Gold Classic1.2%

MM1.2%

Monus1.2%

Marlboro1.1%

The King1.1%

Marlboro (PM USA)1.1% Philip Morris

1.0%

Eve1.0%

Others**15.1%


9

Main Sample – Non-Domestic Incidence by City


Red marking indicates NDI above main sample average – 19.8%

Non-Domestic Cigarettes Survey October 2013


10

Main Sample – Non-Domestic Incidence by City



Non-domestic Incidence*

City 2010 Q2 2011 Q2 2012 Q2 2012 Q4 2013 Q2 2013 Q4

Haskovo 47.3% 61.6% 31.6% 36.7% 36.9% 44.4%

Pazardzik 56.8% 32.9% 30.1% 28.8% 25.3% 38.5%

Sliven 32.6% 19.7% 35.2% 39.5% 36.6% 25.7%

Varna 29.6% 24.6% 7.7% 16.7% 18.0% 25.2%

Plovdiv 44.6% 24.7% 22.0% 12.9% 11.0% 24.7%

Jambol 40.3% 21.8% 22.7% 26.9% 18.9% 21.6%

Sofia 31.4% 18.5% 13.2% 16.5% 20.5% 18.6%

Ruse 34.6% 23.2% 5.1% 13.0% 15.8% 17.8%

Pleven 43.9% 31.4% 12.7% 23.7% 14.0% 17.2%

Burgas 28.0% 13.6% 12.2% 11.0% 16.2% 17.0%

Stara Zagora 32.6% 43.4% 23.0% 34.2% 23.7% 9.1%

Pernik 50.8% 32.6% 18.3% 14.2% 13.8% 8.7%

Dobric 14.8% 23.2% 13.1% 8.8% 15.0% 7.0%

Sumen 27.8% 5.0% 5.0% 6.2% 2.4% 4.0%

Total Bulgaria 34.5% 23.3% 15.3% 18.0% 18.8% 19.8%

• Overall tendency by city remains similar to previous waves

• Haskovo, Pazardjik, Varna, Plovidv – show a considerable increase

• Sliven, Jambol – still very high level


11

Focus Sample – Non-Domestic Incidence by City


Red marking above focus sample average – 24%



12

Focus Sample – Non-Domestic Incidence by City



Non-domestic Incidence*

City 2010 Q2 2011 Q2 2012 Q2 2012 Q4 2013 Q2 2013 Q4

Svilengrad N/A 46.4% 90.5% 84.8% 81.2% 64.1%

Kjustendil 56.9% 43.8% 51.5% 54.0% 53.5% 46.0%

Sandanski 32.1% 11.4% 45.8% 41.4% 34.1% 29.9%

Montana 42.1% 27.0% 7.6% 8.5% 15.0% 29.0%

Gabrovo N/A 27.6% 13.9% 17.9% 24.9% 26.4%

Blagoevgrad 42.5% 23.8% 43.1% 22.3% 22.6% 24.4%

Razgrad 42.2% 18.5% 9.6% 11.3% 11.8% 19.9%

Vidin 50.2% 29.4% 32.6% 40.4% 23.1% 19.1%

Lom N/A 20.9% 30.2% 22.4% 32.2% 18.0%

Veliko Tarnovo N/A 26.1% 3.7% 23.6% 15.2% 13.7%

Svishtov N/A 13.6% 7.2% 1.1% 6.6% 10.5%

Silistra 30.7% 20.6% 11.1% 6.2% 4.3% 3.0%

Total FOCUS sample 43.4% 25.9% 26.2% 25.7% 24.5% 24.0%

• Overall tendency – stable high NDI in Focus cities

• Svilengrad, Kyustendol, Sandanski – traditionally high NDI cities have shown a decrease,

but the level is still very high

• Montana, Gabrovo, Razgrad – show an increase


13

R.C.RODLAN CORPORATION N.V.

• R.C. Rodlan Corp. N.V. is with a registered address in Curacao (small Antilles)

• R.C. Rodlan Corp N.V. has registrations for 17 TMs under class 34 (tobacco) in the Bulgarian Patent Office for the

Bulgarian market

• R.C. Rodlan Corp N.V. has a local IPR representative (Vasya Germanova - same as the IPR representative of TMs

registered by Finansconsult EOOD for the Bulgarian market)

Source: Public data available on Bulgarian Patent Office official website and TMVIEW


14

FINANSCONSULT EOOD

• Finansconsult EOOD has registered numerous TM in class 34 (tobacco) and 33 (alcohol) for the Bulgarian

market, including the brands registered for products manufacture and trade on the domestic market by King’s

Tobacco, such as The King, Merilyn, Bestman, Corset.

• Gracia brand, whose TM owner has been previously unidentified, has now appeared as a brand registered by

Finansconsult EOOD for the Bulgarian market.

• The company’s IPR representative is Vasya Germanova - for tobacco and alcohol TM registrations in the BG

Patent office

Source: Public data available on Bulgarian Patent Office official website

New


15

SPARK FINANCE

• The company is registered in the Seychelles

• The company has registered these TMs as combined (figurative TMs) for the Bulgarian market, while the “word” TM

is registered by Finansconsult EOOD.

• The company has a local IPR representative (Vasya Germanova, same as for Finansconsult EOOD and Rodlan Corp.

N.V.

Source: Public data available on Bulgarian Patent Office official website


Anti-Illicit Cigarette Trade Initiative Bulgaria Results ... Spark Finance 4.3% CT Hubei Industrial 2.7% JTI 2.0% Unknown 1.6% Imperial Tobacco 1.3% Ray Tobacco 0.9% Monus D.O.O. 0.8%

Documents