At the end of 2024, experts recorded the minimum level of illicit tobacco trafficking in the Southern Federal District in recent years. In an interview with Rossiyskaya Gazeta, the director of the National Scientific Competence Center for Combating Illicit Trafficking in Industrial Products told about the fight against the illegal cigarette market in the southern regions Irina Bushina.
Irina Alexandrovna, tell us about the current situation in the Russian Federation and the southern regions with illegal tobacco trafficking.
Irina Bushina: The research conducted by the National Research Center over the past year has recorded a decrease in the share of illicit cigarette trafficking in Russia - from 12.6 percent (in the 4th quarter of 2023) to 10.8 percent (in the 3rd quarter of 2024). This happened, among other things, due to the improvement of the situation in the northwest, Siberia and the south. In the Southern Federal District, the level of illegal trafficking fell from 20.3 to 15.8 percent over the same period, but it still remains above the national average.
Starting in 2021, ANO NSTCC conducts all-Russian research on the tobacco market to determine the share of illicit trafficking. By the end of 2024, it was possible to reduce the level of illegal cigarette trafficking in the Rostov region (to 17.2 percent), in Crimea (to 12.6 percent) and in Kalmykia (to 11.3 percent). Considering that, for example, in the Don region, this share reached 40 percent a few years ago, progress is noticeable. However, it is still premature to talk about a victory over the shadow market.
What is the economic effect of whitewashing the tobacco market?
Irina Bushina: Success in countering the illegal sector leads to an increase in the legal market and revenue from taxes and excise taxes to the federal budget. According to the NSCC, in 2023, the minimum damage to the federal budget from the sale of illegal tobacco in the Southern Federal District amounted to 18.2 billion rubles, and for 9 months of 2024 - 13.4 billion.
For 9 months of 2024, the greatest damage in the district was recorded in the Rostov Region (4,126 billion rubles) and the Krasnodar Territory (3,706 billion rubles). For comparison, this figure, for example, in the Don region by the end of 2022 was 7.4 billion rubles. As you can see, the economic effect of reducing illegal cigarette trafficking is measured in billions of rubles across regions, and these are even more significant figures at the national level.
Why are there fewer illegal cigarettes?
Irina Bushina: In short, thanks to an integrated approach to counteraction at the federal and local levels in all regions of the Southern Federal District. Local control and supervisory agencies and law enforcement agencies are working to combat the illegal trafficking of industrial products. In the 3rd quarter, there was a sharp increase in the number of points in the Southern Federal District where violations were detected, with the increase coming at the expense of the Rostov Region. In addition, illegal products are actively withdrawn from circulation. Among the southern regions, the Rostov and Volgograd regions, as well as the Republic of Crimea, are the leaders in this indicator.
As for the structure of illicit trafficking in the South, the largest decrease in the third quarter of 2024 was in products illegally imported from the EAEU. Because of this, illegal trafficking in the country as a whole and in the south in particular has decreased (with the exception of Kuban and Adygea, where, on the contrary, there is an increase).
Another segment where illegal trafficking in the southern regions has decreased is counterfeit cigarettes: a downward trend has appeared in almost all subjects of the Southern Federal District, except Kuban and Adygea, where the share of counterfeit products has increased compared to the first half of 2024.
Which illegal cigarettes are detected more often in the South?
Irina Bushina: The products of Belarusian brands dominate: 63.3 percent of all illegal products from the EAEU member states. Next came cigarettes illegally imported to the south from Armenia and Kazakhstan. The share of tobacco products from non-EAEU countries is growing. Cigarettes are illegally shipped from the UAE, Germany and Serbia.
Previously, the regions of the Southern Federal District were anti-leaders in tobacco trafficking in the Russian Federation. What places do they occupy in the final ranking of the 3rd quarter of 2024?
Irina Bushina: The regions are assessed based on 18 indicators, each of which is rated. Each of them is given different weight coefficients, depending on the degree of influence.
The most significant are the share of illegal turnover in the region and minimal damage from non-payment of excise taxes and VAT to the federal budget. Special attention in the methodology is given to indicators of the involvement of civil society in countering illegal products. The Krasnodar Territory is among the top subjects of the Russian Federation with the most effective public control - administrative and criminal offenses are often detected at points of sale based on appeals from Southerners. At the same time, we are assessing the impact of the results of control and supervisory activities on the state of the market.
Kuban and Adygea occupy the highest positions in the rating among the regions of the Southern Federal District, while Kalmykia, Volgograd and Rostov Regions are at the bottom of the rating.
The regions are showing interest in their positioning in the ranking. Therefore, the NSCC has created a service for the regions, through which the authorities of the regions, as well as organizations and departments, will be able to independently calculate how a change in a particular indicator affects the position in the rating. In 2025, access to a calculator for calculating the subject's position in the all-Russian rating will be opened on the website of the ANO "NSCK".
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