In the Kurgan region, the shadow tobacco market is shrinking, but it is not giving up

#industry news

The Kurgan region was included in the list of regions with a high level of illicit trafficking in tobacco products. The situation with counterfeit goods here is worse than in Russia and the Ural Federal District generally. Consumers risk their health by buying dubious goods, the budget loses enormous funds, law-abiding businesses suffer from unfair competition, but it is not possible to defeat the gray market yet.

According to the assessment of the National Scientific Center of Competencies in the Field of combating Illicit Trafficking in Industrial Products (NCCR), the state may not receive 113 billion rubles this year due to illegal cigarette trafficking. Plus, the falling revenues of regional and local budgets are primarily income tax, personal income tax, insurance premiums of shadow firms and their employees.

- In the first quarter, the budget losses of the Kurgan region amounted to 160 million rubles, in the second - 178.5 million, - First Deputy director of the National Research Center Baysolt Khamzatov clarified at a round table organized by the "Expert-Ural" magazine and the "Expert" AC.

He noted that over the past year, the Kurgan region has significantly improved its position in the rating of the effectiveness of the work of control and supervisory authorities in the field of combating illicit trafficking in industrial products, rising from 82nd to 56th place. At the same time, according to the results of citizens' appeals, the region moved from the 29th place in the first quarter to the fourth in the second, and in detecting violations in legal points of sale - from the 51st to the second.

"The tobacco industry ranks second in Russia after the oil and gas sector in terms of budget revenues," reminds Artem Kovalenko, editor-in-chief of the Expert-Ural magazine. - The Kurgan region is a border region, therefore, in fact, it acts as a protective shield against counterfeiting.

The situation may worsen in the nearest future, because cigarettes have risen in price by a quarter since January last year.

It should be said that the problem of illicit tobacco trafficking is by no means local or even Russian - it is relevant for the whole world. In Russia, the largest "contribution" to illicit trafficking is made by cigarettes illegally imported from the EAEU member states. Their share in the total volume increased from 6.7 percent in 2021 to 7.5 percent in 2022. Traditionally, this segment is dominated by products of Belarusian origin (92 percent of all illegal tobacco coming from the EAEU countries).

The fight against counterfeiting is carried out everywhere, but with different degrees of success. In the Trans-Urals, the results are still modest, but they are there: the share of illicit trafficking in tobacco products decreased by 1.5 percent over the year, although it still remains too high. According to Yevgeny Kafeev, Chairman of the Economic Policy Committee of the Kurgan Regional Duma, in order to eradicate the evil, it is necessary to solve at least two problems: to stop the growth of excise taxes and transfer part of the proceeds from tobacco excise taxes from the federal budget to the level of the subject in order to interest regional and local authorities in the fight against illegal immigrants. True, we have been talking about this for two years, but the necessary decisions have not been taken.

The cost of cigarettes is the hottest topic. By raising the price, the state apparently expects that due to the high cost of products, smokers will quit smoking. But this does not happen, because there is cheap illegal tobacco on the market, and smokers make a choice in its favor. And there are more than four million people in Russia, according to Igor Cherkassky, head of the department for combating illegal trade of the BAT group of companies.

- Two thirds of the cost of legal cigarettes (67 percent) is tax - excise duty and VAT, - the expert emphasizes. - The average price of illegal cigarettes is even slightly lower than the size of the tax component in the cost of legal ones.

Of course, it is almost impossible to compete with the same Belarus, where the price per pack starts from 30 rubles, whereas in Russia it is 112 rubles. According to Igor Cherkassky, the situation may worsen significantly in the nearest future due to the fact that cigarettes have already risen in price by a quarter since January last year, and double-digit inflation this year. Everything is going to the fact that people with a small income will not be able to afford legal cigarettes and will buy cheap ones from under the floor. It turns out that the state, struggling with smoking, actually created a shadow market itself, which did not exist a few years ago.

According to Roman Troshkin, manager for work with government authorities at JTI Russia, unscrupulous competitors are actually displacing products from official manufacturers from the market, and retail suffers as a result. Meanwhile, the Kurgan FAS has not yet received a single appeal regarding unfair competition in the sale of counterfeit tobacco products. However, the head of the department, Tatiana Sobolevskaya, understands perfectly well: the absence of appeals does not mean that this phenomenon does not exist. And encourages players to fight more actively for the purity of the market.

Experts emphasize that enough tools have been created in Russia to combat illegal tobacco trafficking: mandatory digital marking of products has been introduced, a single minimum price for cigarettes has been established, limits on the movement of unmarked tobacco products across the state border of the Russian Federation and fines for their violation have been introduced, fines for the turnover of unmarked cigarettes have been increased. However, no matter how perfect the legislation is, everything depends on its application on the ground.