To reduce the market share of black market cigarettes, increase budget revenues, and strengthen the regulation of goods containing smoked tar, the Russian Tobacco and Alcohol Administration (RTA) proposes to introduce a system of licensing of tobacco retailing. MPs have suggested creating a unified register of tobacco stores and developing an application to monitor illegal sales.
Proposed Tobacco Retail Licensing System
Igor Alyoshin, head of Russia’s Tobacco and Alcohol Administration, has said there is a need to introduce a licensing system for the retailing of cigarette goods, DK.RU reported on 23 July.
- “Cigarette retail control is one of the most important issues. We propose to authorize licensed points of sale and, similarly, to hand over regulatory functions to local governments in the Russian Federation. This will not only bring additional revenue to the budget but also immediately reduce the proportion of black market cigarettes on the market.”
As of March 1, 2024, tobacco industry licensing is introduced by the state law controlling the production and distribution of tobacco countermeasures, tobacco products, nicotine-containing products, and their raw materials, and manufacturers must be licensed and register key equipment. While licenses for retail tobacco products are not required, there are already some restrictions on their packaging, movement, and labeling.
According to Aleshins, as of July, 225 market participants have been licensed, of which 190 are manufacturers and the others are buyers.
- “We have seen that the tobacco industry licensing system has had a positive effect, with production increasing, excise tax revenues (including e-cigarettes) rising, and the market becoming more regulated. Once production is found to be in an unregistered device, the license can be lost. Manufacturers don’t want to take that risk.”
Strengthening Regulation of Products Containing Nicotine
The chief said that controlling the sale of traditional tobacco is much simpler than vapes because most tobacco is sold in stores that have a license to sell alcohol.
Effective Sept. 1, 2023. The former Alcohol and Tobacco Control Department’s responsibilities have been expanded to include control of tobacco and tar products. The service has been renamed the department of tobacco and alcohol control.
Meanwhile, representatives of the Federal Parliament joined the discussion. Senator Ayrat Gibatdinov told RIA Novosti that Russia needs to create a unified register of tobacco stores.
- “I think it is necessary to create a unified register of tobacco stores, assign them unique numbers, and put them in every cabinet, display case, and cash register. Using it will allow for identifying the points of sale of products containing smoking tar. At the same time, it is necessary to develop an application (similar to the one that records traffic violations). With this application, every citizen can record and transmit data on violations in the sale of such goods.”
The MP said that he had contacted Anna Popova (АннеПоповой). The head of the Russian Federal Transportation Agency (FTA), to ask for consideration of this proposal.
In addition, deputies of the Russian State Duma said that they will continue to fight against vapes. Currently, they are considering a bill on a total ban on the sale of smoking tar and smokeless tar devices in Russia.
