South-East Europe: Albania, Bosnia & Herzegovina, Bulgaria, Croatia, Greece, Kosovo, Montenegro, North Macedonia, Romania and Serbia
February 2026: Factory Closures Turn Bosnia’s Tobacco Sector into an Import-Dependent Market
Bosnia & Herzegovina’s tobacco industry, established in the late 19th century, was once a pillar of domestic manufacturing. Over the past two decades, transition, privatization and fiscal policy shifts have led to the complete shutdown of industrial cigarette production. The country has moved from a producer with established national brands to a market overwhelmingly reliant on imports.
The decline unfolded through the closure of the country’s three major factories. The Sarajevo Tobacco Factory (FDS), founded in 1880 and long regarded as a symbol of industrial development, was sold to British American Tobacco (BAT) in 2016, with production in Sarajevo ending in 2019 and manufacturing relocated abroad. Its flagship brand, Drina, is now produced in Poland and imported back into the domestic market. The Mostar Tobacco Factory (FDM) ceased operations in 2007 following privatization, and the Banja Luka Tobacco Factory shut down production in 2018.
With domestic manufacturing eliminated, Bosnia and Herzegovina now imports around 4.7 million kilograms of cigarettes annually, valued at around US$67 million, primarily from Serbia and Croatia. The shutdown of factories also dismantled the upstream supply chain. The last tobacco station in Bosnia & Herzegovina closed in 2012, ending the organized purchase of domestic tobacco and effectively collapsing traditional cultivation in the country. A once vertically integrated national industry has been replaced by an import-driven market structure.