Without smoke and flame: a turning point has come for the Russian tobacco market
The State Duma approved in the first reading the introduction of mandatory licensing of wholesale and retail sales of cigarettes and nicotine-containing products. It will be introduced in stages from March 1, 2026, and by September 1, trading without a license will be prohibited. At the same time, entrepreneurs will be given a year, until September 1, 2027, to adapt to the new rules. So far, only the production, export, and import of such goods have been licensed, but not the sale. The possible consequences of the initiative, both positive and negative— are causing heated discussions in society and among experts. Details can be found in the Izvestia article.
Full control of the entire production and supply chain
The State Duma approved in the first reading the introduction of mandatory licensing of wholesale and retail sales of cigarettes and nicotine-containing products. So far, only the production, export and import of such goods have been licensed.
According to the press service of the Ministry of Finance, the initiative should help quickly identify the points of sale of illegal goods, since permits for retail and delivery trade will be issued separately for each retail facility or vehicle.
"The licensing requirements will include, among other things, the absence of tax arrears of more than 3 thousand rubles, the presence of license applicants in ownership, economic management, operational management or lease of a commercial facility with an area of at least 5 square meters, payment of duties," the ministry explained. Also among the necessary requirements is compliance with the prohibitions and restrictions already established by law in the field of protecting citizens' health from exposure to ambient tobacco smoke, the consequences of tobacco consumption or consumption of nicotine—containing products.
The fee for issuing an annual retail license is proposed to be set at 20 thousand rubles per outlet. The fee for issuing a license for wholesale turnover will be issued for a period of five years and will amount to 800 thousand rubles. Regions will be able to set additional restrictions on retail locations, as well as increase the minimum size of a retail facility, but not more than 10 square meters. m.
The press service of Rosalokoltabakcontrol (RATK) noted that wholesale licenses will be issued by the agency itself, and retail licenses will be issued by the authorities of the constituent entities of the Russian Federation. A similar approach has already been implemented earlier in the alcohol market and has proven its effectiveness: the share of illegal products in licensed alcohol retail has decreased to zero.
— Licensing of wholesale and retail links in the tobacco market will ensure full control of the entire chain from production and supply, right up to the sale of products to the end consumer. The new rules will whitewash the tobacco market and enable consumers to purchase authentic and legal products manufactured in compliance with all mandatory requirements, the RATK says.
Izvestia sent requests to the Ministry of Industry and Trade and Rospotrebnadzor.
In parallel with licensing tobacco sales, the government has prepared amendments giving Russian regions the right to ban the retail sale of vapes. For example, in the Saratov region, children will not be allowed to enter stores that sell cigarettes, vapes and hookahs. This law was adopted by the local regional duma, fines for violations are up to 20 thousand rubles.
How will licensing affect the level of the illegal market in Russia
The importance of this step is very high: for the first time, the entire chain — from raw materials to the final consumer — will come under state control, which will significantly reduce the illegal turnover of tobacco and nicotine.
The State Duma expects that licensing will become a powerful tool specifically for combating counterfeiting," says Artyom Kiryanov, Deputy Chairman of the State Duma Committee on Economic Policy.
— Currently, the volume of illegal products reaches 9.5% in cigarettes and almost 70% in the field of electronic nicotine delivery systems (EDS). Violators face heavy fines and up to five years in prison. This will create conditions under which entrepreneurs will not want to risk their business," he notes.
Another goal of the deputies is to reduce the sale of cigarettes and vapes to minors to zero, as well as to enforce other restrictions on trade in tobacco and nicotine—containing products, the State Duma deputy emphasized.
This opinion is supported by the expert of the "Popular Front" Roman Chikun. He emphasizes that the introduction of mandatory licenses and digital labeling "Honest Mark" create a powerful barrier to illegal activities and comply with WHO international standards for combating tobacco smuggling.
— For legal businesses, the introduction of licensing means leveling the competitive field and eliminating price dumping by illegal players. This will create predictable business conditions," says Roman Chikun.
Kirill Kuznetsov, Head of the Excisable Goods Committee at Opora Russia, draws attention to the fact that the process of obtaining licenses is time-consuming and costly. According to him, as a result, therefore, after the introduction of licensing, small and medium-sized entrepreneurs will be afraid of losing their license and the right to trade due to violations of the law.
— Government control will become much stricter. This will make it possible to fight illegal trade even more effectively and accelerate the whitewashing of the market," Kirill Kuznetsov notes.
However, as Vladimir Poklad, director of the management consulting department of the Business Profile Group, notes, at the first stage, a temporary increase in the illegal market is possible due to financial and administrative barriers for small businesses.
— Small businesses are particularly vulnerable: they will either leave the market or merge. At the same time, large retailers will gain an advantage, and trade will consolidate in formalized channels. The full—fledged effect of licensing can be expected with digital support, as in the EGAIS in the alcohol market," says Vladimir Poklad.
The balance between regulation, business and consumer rights
Modern regulation should take into account the balance of interests of the state, business and citizens' rights.
"From the point of view of public health, any measures that complicate the availability of tobacco and nicotine theoretically reduce their consumption," says Alexander Milykh, Director of Communications at the Fomin Clinic network. — But the key risk is the growth of the illegal market and the widespread appearance of dangerous counterfeit products with unknown ingredients.
Alexey Koitov, Chairman of the Consumer Union of the Russian Federation, emphasizes that licensing support is extremely important, because it helps to combat illegal products.
— The growth of the illegal market is driven by demand and government control measures. The main thing is to work with the public, to form a negative image of vapes and tobacco. Strengthening control and the inevitability of punishments is the way to achieve goals," says Alexey Koitov.
Experts emphasize the need for smart rather than prohibitive regulation. As Kirill Kuznetsov explained, historically, real bans do not produce positive results, but only make the market completely shadowy.
Experts urge the government to proceed from the evidence base and focus on comprehensive measures: digital accounting, age control, public awareness.
"Business should participate as a partner, not an object of pressure: large companies are already voluntarily abandoning sweet flavors and investing in educational campaigns,— adds Vladimir Poklad.
At the same time, consumers have the right not only to purchase, but also to reliable information and security.
How do the new rules relate to global trends
The experience of foreign countries and international organizations shows that the fight against illegal trafficking requires a systematic and very balanced approach.
— The EU has strict product notification (TPD) systems, restrictions on nicotine and flavorings, but legal access for adults remains. In the USA, the FDA requires approval of new products without blocking the entire market," explains Vladimir Poklad.
The introduction of new rules in Russia partially complies with these international standards, designed to reduce the harm from the sale of such products. Measures to increase control and reduce access for minors are useful, while bans that form only a shadow market are harmful, experts believe.
The problem with vapes is particularly acute. The experience of Kazakhstan and other countries shows that bans only stimulate the growth of illegal trade.
— After the complete ban on vaping in Kazakhstan, the black market has grown by 120%, and the number of teenagers smoking has not decreased. Consumers switched to illegal suppliers without any control," says Kirill Kuznetsov.
State Duma deputy Artyom Kiryanov says that, unfortunately, the experience of banning vaping in Singapore demonstrates a trend towards the rapid growth of the illegal vaping market and the drug market. At the same time, the increase in vaping among young people was 58%, despite bans and fines, he added. Therefore, some countries that previously imposed a ban on vaping have recently begun to abandon it and return to regulation, the parliamentarian noted.
The International Association for Combating Drug Addiction and Drug Trafficking, in an interview with Izvestia, highlighted the advantages of restrictions, including reducing youth consumption, but warned of the risks: the formation of a black market, increased criminalization and economic problems for small businesses.
Experts agree on the need to combine regulation with extensive awareness campaigns and the development of product quality control.
— After all, it is so important to limit the access of minors, ensure awareness of the dangers of nicotine and create conditions for a healthy lifestyle, — concludes Alexander Milykh.
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