The Honest Shop project will be expanded to chain retail

#industry news

The head of the Association of Small-format Trade announced the expansion of the Honest Shop project.

The federal information and educational project Honest Shop, created by the Association of Small-format Trade in 2019 to combat illegal trafficking in tobacco products, will be expanded to online retail in the nearest future. This was stated by the head of the Association of small-format Trade Vladlen Maksimov.

Within the framework of the Honest Shop program, law-abiding trade representatives inform consumers about the risks of illegal cigarettes and place information materials on the main tools for checking cigarettes for legality in sale points. Over the past three years, the program has been extended to traditional trade: first in the regions with the highest share of illegal trafficking, and today thousands of representatives of small-format trade in more than 80 regions of the country are participants of the program.

"Today we have come to the next stage of the program — with the support of the Ministry of Industry and Trade of Russia, the program goes into chain retail. The involvement of retail chains as the largest channel for informing consumers will make it possible to increase the scale of the information campaign against illegal trade in tobacco products. Thus, we expect an early reaction from the chain retail and their connection to the program to inform consumers about ways to check the legality of cigarettes," Maximov said.

Yulia Yudina, Head of the Department for the circulation of certain types of Goods of the Department for the Development of Domestic Trade of the Ministry of Industry and Trade of Russia, stressed that "the dissemination of information through the Honest Shop program is a very important step."

The purpose of the program is to inform the business community and consumers about the problem of illegal tobacco trafficking in Russia, the unified minimum price for cigarettes, set annually by the Ministry of Agriculture of Russia, as the most understandable and transparent criteria for determining the legality of the product for the consumer, and about digital methods of checking cigarettes for legality, as well as responsibility for violation of legislation in the field of turnover tobacco products.

Since 2015, the share of the illegal tobacco market in Russia has grown by a thousand percent to 12.1 percent by 2022 and continues to grow. In quantitative terms, the volume of illegal cigarette turnover in the country this year will exceed 1.3 billion packs. According to experts, in 2022, the damage to the federal budget from illegal cigarettes will reach 113 billion rubles, of which 88 billion rubles of under-collected excise taxes and 25 billion rubles of under-received VAT.

Today, the main prerequisite for the growth of the illegal cigarette market is the difference in excise rates (and, accordingly, in cigarette prices) in Russia and the EAEU countries, the industry notes. The moratorium on unscheduled inspections of small and medium-sized businesses, which has led to a sharp decrease in the number of control measures carried out, also contributes to the growth of the illegal market, experts believe.

According to Vladislav Zaslavsky, deputy director of the system of digital marking of goods and legalization of product turnover of the Ministry of Industry and Trade of Russia, in the second quarter of 2022, due to the moratorium, not a single control purchase was carried out in 77 regions of Russia. Inspections were carried out 3.5 times less, and protocols on offenses were drawn up 4.5 times less.

"The availability of illegal cigarettes for the population remains high," Zaslavsky summed up.

The lifting of the moratorium on business inspections in relation to excisable goods could improve the situation on the market, the industry is confident.