Tobacco products in Russia are getting more expensive

#industry news

Prices for tobacco products in the Russian Federation are growing, chewing tobacco is becoming more expensive.

As the Center for the Development of Advanced Technologies (CRPT, the operator of the Honest Sign labeling) told Interfax, this was shown by the results of the quarterly review "Tobacco and nicotine-containing products" prepared by the CRPT together with the National Research Center for Competencies in the field of Combating Illicit Trafficking in Industrial Products.

Thus, the cost of chewing tobacco in the first quarter of this year increased by 35% compared to the same period last year, from 488 rubles to 660 rubles per conditional package.

The prices of cigarettes have increased significantly (by almost 25%, to 247 rubles), tobacco-free hookah mixture (by 17%, to 174 rubles per package) and cigars (by 13%, to 1,668 rubles per package). At the same time, the most popular tobacco products such as cigarettes and sticks were becoming more expensive at a slower pace. Thus, the average price of cigarettes increased by 8% (to 173 rubles per conventional package), sticks - by 6.5% (to 179 rubles).

According to the review, the supply of products in this market is also growing, and nicotine-containing products are growing at the highest rate. If the market of cigarettes and cigarettes (production and import) in the first quarter of this year increased by 1% compared to the same period last year, to 2.3 billion conventional packages, then imports of nicotine-containing products jumped fivefold, to 8.8 million packages, domestic production - by 9%, to almost 275 million packages.

According to Yevgeny Fedotov, head of the Fedotov Group tobacco consulting agency, whose opinion was conveyed by the CRPT press service, tobacco prices are rising due to objective factors. "The key aspect is an increase in excise rates, as well as an increase in the cost of raw materials and a change in logistics chains," he said.

As for the increase in supply, according to him, this indicates that legal importers and manufacturers are beginning to occupy a large market share.

The CRPT recalled that an earlier market study of nicotine-containing products (vapes and liquids for electronic nicotine delivery systems) for the fourth quarter of 2023 also showed a decrease in the share of counterfeit goods.

"Indeed, the tobacco market is gradually being whitewashed, and it is becoming more difficult for "gray" players to sell illegal goods. The positive effects of the introduction of labeling in the tobacco market have been observed for several years: in 2023, the work of 15 illegal tobacco enterprises was suspended, 45 of them were identified during the labeling, - said Kirill Volkov, head of the Department of excisable commodity groups of the CRPT, quoted by the press service. "The increase in the share of legal players is also confirmed by the fiscal effect: an additional 245.9 billion rubles were received by the budget."

Labeling of products on the tobacco market of the Russian Federation began in 2019. Its final stage was December 1, 2023 - from that date, the turnover of unmarked vapes, liquids for them and disposable electronic cigarettes is not allowed in the Russian Federation.