The government will set minimum prices for NСP

#industry news

The Russian government has received the right to determine the minimum prices for disposable vapes with liquids, sticks, tobacco-free mixtures for hookahs and liquids themselves for electronic means of nicotine delivery.

At the end of April, Russian President Vladimir Putin signed a law banning the sale of vapes to minors, which also provides for a ban on the open display of vapes in stores and discounts on them. According to the document, nicotine-containing products cannot be sold below the minimum price for it, and the minimum price must be determined in accordance with the procedure established by the government. Also, the Cabinet of Ministers will be able to create a list of substances and additives, with the addition of which the sale of vapes will become impossible. In addition, the law equates nicotine-free liquid to nicotine-containing products.

"The change is the minimum prices for nicotine-containing products, that is, for sticks, liquids and tobacco-free hookah mixtures. ... On September 1, 2023, the government will have the right to determine these minimum prices. According to the government's schedule, which was reviewed by Fedotov Group, it is planned to publicly present minimum prices by November 1. It is not yet known when they will start acting," Yevgeny Fedotov, head of the tobacco consulting agency Fedotov Group, told RIA Novosti.

The agency also clarified that this will also affect disposable electronic nicotine delivery systems (ESDS) with liquids. Fedotov believes that there may be a small transition period so that all participants in the turnover have time to close current transactions and adjust to new prices, as well as for unmarked products to finally leave the shelves.

"I will note a number of important nuances. Firstly, in the current version of the project, minimum prices apply to the entire chain of turnover. That is, these are not minimum retail prices, as many people think, but prices that apply to manufacturers, wholesale suppliers, and retail stores. This means that we can expect a serious change in prices for products that fall under the minimum price, and above all, for nicotine-free liquids for ESDS, which are sold in vials," the expert said.

According to him, the minimum prices for liquids with nicotine and without are calculated according to the same formula, where the excise rate of liquids with nicotine is used, so the minimum cost of these liquids will be the same, whereas now options with nicotine are more expensive, because the main price of the product is the excise tax and nicotine itself. "I think for many companies, the release of nicotine-free liquids will lose its meaning, although the product is unlikely to disappear completely from the shelves - nicotine-free liquids have their own audience. Prices for other products will rise, but much less significantly when compared with liquids," concluded Fedotov.