Illegal tobacco will lead to "article"

#industry news

Is it necessary to tighten responsibility for the sale of counterfeit cigarettes?

The Ministry of Finance proposed to introduce criminal liability for the production and sale of counterfeit cigarettes. For the absence of a license, you can face up to three years in prison or a fine of up to 1 million rubles, it follows from the bill prepared by the department. The document notes that state regulation will protect the economic interests of the country, as well as reduce the possible harm to smokers. It will take place by analogy with the way the authorities now control alcoholic beverages.

According to estimates of tobacco industry participants, in 2022 the share of the illegal cigarette market increased to 13% against 1% in 2015. In reality, the indicator may be higher, admits Maxim Korolev, editor-in-chief of the Russian Tobacco news agency.

However, the amendments of the Ministry of Finance are unlikely to radically change the situation, the interlocutor of Kommersant FM believes: "When crossing the border with large volumes of contraband products, criminal liability is already threatened. We are talking about an addition to the legislation, which will not fundamentally change anything.

The reason for the emergence of the illegal market lies in economic factors. Inflated excise taxes are especially affected. If at best 1% of the real illegal market is delayed, then this percentage will be affected by the new measure. And excise taxes will give a profit of 99%.

According to official data, the volume of the illegal market is 12%. But independent retail auditors no longer work in the domestic tobacco segment, so speculative estimates reach up to 30%. Can the initiative make up for budget losses from illegal turnover? I am skeptical that this measure will help in some way, because the increase in excise taxes has been adopted in three readings. It turns out that an additional incentive has already been created for the growth of the illegal market. At the same time, in the package of laws that are being discussed from 2021, one of the measures in particular is curbing the growth of excise taxes. And now, instead of deterrence, an additional increase."

The Ministry of Finance assumes that the introduction of criminal liability will lead to a gradual decrease in the share of the illegal tobacco market. And as a result, in 2024 it will be 10%, and by 2028 — 5%. At the same time, already in 2024, the budget will receive an additional 34 billion rubles. And in the following years, the indicator will grow.

But along with this, legal products will also become more expensive, and in parallel with the increase in excise taxes, believes tobacco industry expert Vadim Zhelnin: "The main producers in Russia are international companies. There are four of them, and they scrupulously follow all the laws, everything is honest and clean with them. When new rules are introduced, they comply with them.

Naturally, these are both organizational and labor costs. The more additional control measures, the more expensive legal products become, and the more the margin of illegal immigrants grows. In Europe, all this has been observed for many years. As soon as excise taxes began to rise there, all these processes began. The illegal market flourishes when the cost of cigarettes starts to make up about 10% of the household budget."