Potential Ban on E-cigarette Sales in Russia Sparks Concern

Key Points:

The Russian Parliament is currently discussing a bill that could potentially restrict or even ban the sale of e-cigarettes.

The ban could lead to small businesses closing down, causing a detrimental impact on the local economy.

Experts recommend optimizing market policies to prevent minors from accessing and illegal selling.

According to a report from kp.ru on March 31, the Russian Federation government and State Duma are currently discussing several bills that would significantly increase the difficulty of selling e-cigarettes, potentially leading to a complete ban. This series of policies has raised concerns among industry experts who believe that such restrictions could drive e-cigarettes into the underground market and potentially lead to illegal distribution through online channels.

Last week, Deputy Chairman of the State Duma Economic Policy Committee Artem Kiryanov and First Deputy Chairman of the State Duma Budget and Tax Committee Sergey Katasanov organized two expert committee meetings to review proposed amendments to relevant laws. Kiryanov emphasized that a blanket ban without solving the issue may actually lead to an increase in black market activities.

Currently, there are approximately 170,000 registered shops in Russia selling tobacco and e-cigarettes, with small businesses being particularly affected. Sergei Borisov, the chairman of the National Association of Small Businesses in Russia, stated that over 150,000 small and medium-sized companies may not be able to continue selling due to the ban, especially in inland urban areas.

The main bill is drafted by the Ministry of Finance and includes strict restrictions on store size, location, and storage requirements. However, many experts believe that these proposals are outdated and lack a practical basis. Authorities should consider reducing the economic burden and avoiding small businesses being forced to transition to illegal trading.

In addition, the bill grants regions the power to impose additional restrictions, which may lead to market confusion. Gennady Spirchagov, chairman of the Ulyanovsk provincial government, stated that many regions lack the financial resources to establish new regulatory bodies, making enforcement of regulations difficult.

However, not everyone is against regulating the e-cigarette market. Starting in December 2023, e-cigarettes will be included in the "Honest Labeling" system. Despite a decrease in illegal trafficking, experts point out that the market share of compliant products remains low. An investigation by the Russian Consumer Protection Agency revealed that some stores are not registered and are facing penalties.

Currently, legal and illegal products coexist, with vastly different prices impacting consumer choices in the market. Industrial Association member Vladimir Mishelovin suggests lowering taxes, reducing demonization of the market, promoting legal transactions, and protecting market health.

Since September, Russia has banned the sale of e-cigarettes to children. On a technological level, facial recognition payment systems may be used to confirm the age of tobacco purchasers, but legal restrictions currently prevent this functionality from being implemented.

If e-cigarettes are banned, experts predict that underground trading will increase. Konstantin Kuntz, a member of the Public Committee of the Russian Ministry of Health, warns that tobacco dependence is a disease, and if legal products become less accessible, it could exacerbate the demand for other addictive substances.