Russian Vape Ban May Boost Cigarette Sales

[Author：Vladimir Vorotnikov]The lower house of Russia’s Federal Assembly may consider a bill this month [March] banning vapes, reports Izvestiya. Originally proposed by the Communist Party, the legislation would amend Article 19 of the federal law "On the Protection of Citizens' Health from the Effects of Second-Hand Tobacco Smoke, the Consequences of Tobacco Consumption or the Consumption of Nicotine-Containing Products" to prohibit the retail and wholesale trade of nicotine-containing and nicotine-free liquids, as well as devices for their delivery. If approved, the new law could take effect as early as Sept. 1, 2025, according to Parlamentskaya Gazeta.

While proponents believe the bill will help curb the growing popularity of vapes, especially among young people, critics fear it will boost sales of more harmful combustible cigarettes, which have already been rising in Russia.

In 2024, the Russian cigarette market grew by 18.9 percent compared with the previous year, according to the Center for the Development of Advanced Technologies (CRPT). Last year, Russians spent RUB1.4 trillion ($16.1 billion) on conventional cigarettes against RUB1.2 trillion in the previous year, official data indicated.

As before, cigarette consumption per capita remained the highest in the Russian Far East, a relatively isolated part of the country, where a substantial share of cigarettes is imported from Asia. Magadan Oblast and Kamchatka Krai appeared to be leaders in cigarette consumption, which was close to 120 packs per capita, significantly higher than in the regions of the European part of Russia.

The general upward trend in the Russian cigarette market can be attributed to several factors, as reported by the Russian regulator. The volume sales of cigarettes climbed by 9.8 percent compared to the previous year, a growth not necessarily indicative of increased smoking rates. Russian authorities are confident that improved track-and-trace measures played a significant role in driving a portion of the cigarette sales out of the shadow, where they were previously invisible to government agencies.

"Five years ago, [when the government embarked on the reform], the share of illegal sales in the Russian cigarette market was close to 15.6 percent. In the third quarter of 2024, this figure dropped to 10.8 percent," the CRPT estimated.

"This factor has driven the legal sales of cigarettes up," the Russian regulator asserted.

The government's efforts to make cigarettes more expensive have also fueled the value of the cigarette market.

From Jan. 1, 2023, the minimum price of cigarettes in Russia was set at RUB119 per pack against RUB112 per pack in the previous year. From early 2025, the figure was further raised to RUB135 per pack.

During the first nine months of 2024, Russian cigarette factories saw a 6.8 percent rise in output to 7.59 billion packs of cigarettes, the National Scientific Competence Center in the Sphere of Combating Illegal Trafficking of Industrial Products calculated.

Shadow Segment Persists

Despite claims of progress, Russian government officials and independent analysts remain concerned about the persistence of the illicit cigarette business.

During a government meeting in 2024, Finance Minister Anton Siluanov warned that the shadow segment of the Russian tobacco market was inflicting pain on the national budget.

The finance minister calculated that the problem costs the Russian budget around RUB150 billion in annual tax payments.

"This is a significant volume of financial resources that we need now," he said, referring to the high cost of Russia’s ongoing conflict with Ukraine.

In some parts of the country, the picture is particularly grim. The National Scientific Competence Center in the Sphere of Combating Illegal Circulation of Industrial Products has estimated that in some regions, the share of illegal sales may be as high as 30 percent.

Illegal sales are primarily driven by smuggling from other countries in the Eurasia Economic Union, a trade bloc that includes Belarus, Kazakhstan, Kyrgyzstan and Armenia.

"The illegal tobacco products trade did not exceed 1 percent a decade ago," Alexey Chikov, corporate affairs manager at Philip Morris Sales and Marketing, told local press.

However, when the Russian government started gradually increasing the excise rate on tobacco products, cigarettes produced in the neighboring countries became noticeably cheaper by comparison.

The difference in the excise rate has also driven the share of illegal sales in the nicotine-containing liquids segment to 75 percent, Alexey Sinitsyn, a member of the Russian Parliament, unveiled during a parliamentary session in 2024.

Combustibles’ Comeback

Official sales of combustible cigarettes will likely receive another boost from the planned prohibition of vapes, which appears to enjoy broad backing. In a recent poll conducted by State Duma Chairman Vyacheslav Volodin, 74 percent of more than 265,000 respondents expressed support for the proposed vape ban.

The initiative aims to protect children and teenagers who do not smoke conventional cigarettes, Sergei Leonov, the head of the State Duma Committee on Health Protection, explained.

"This is an epidemic that has captured children. Our measure is the only possible solution to protect children from this infection. The effects of smoking vape in some cases are much worse than from smoking cigarettes," he asserted, contradicting findings that vaping is significantly less harmful than smoking.

Some lawmakers are concerned that vapes could be used to consume prohibited substances.

"A teenager could be walking next to you smoking electronic cigarettes, and they will not contain a simple liquid with nicotine, but a liquid with, for example, tetrahydrocannabinol—that is, one of the components of cannabis," Viktor Zykov, deputy head of the department for the prevention of risk factors in healthcare stated.

The World’s Highest Tax Rates

Lawmakers unveiled their plan to ban vapes only months after subjecting e-liquids to extraordinarily high taxes.

Under a new system, which also set the minimal price for liquids, the average market price of liquids jumped nearly fivefold, the Russian Libertarian Party estimated.

"For a regular vaper who consumes about 120 ml of liquid per month, which is equivalent to four 30 ml bottles, the current costs of vaping are approximately RUB2,000. Following the introduction of the minimal retail price, this figure jumped to RUB9,800," the party representatives warned.

A surge in the price of vapes in Russia was one of the key reasons driving up the sales of conventional cigarettes in the country up in 2024, Russian newspaper Vedomosti reported, citing market players.

"Such a sharp increase in the cost of vaping will inevitably lead to a significant proportion of consumers simply giving up on e-cigarettes. However, instead of giving up nicotine, they may return to cheaper alternatives, such as regular cigarettes," the Libertarian Party said.

In fact, Russia has subjected vapes to the world's highest tax, the Libertarian Party claimed.

In 2023, sales of vapes in Russia reached RUB170 billion, NeoAnalitics, a Moscow-based think tank, calculated. Over the past few years, the market has experienced a meteoric rise, and at one point the number of stores selling e-cigarettes in Russia exceeded that of outlets for conventional cigarettes. It is not entirely clear to what extent the introduction of the minimum sale price hindered sales in 2024.

In a bid to keep prices low, some liquid manufacturers may partly sacrifice product quality by switching to cheaper and potentially more harmful components, the Libertarian Party claimed.

In the face of a looming ban, the thousands of vape shops opened in Russia over the past few years are bracing for closures and layoffs in 2025. Only a few vape shop networks shared plans to convert their business to selling alcohol, sweets or other products.

Hookah Ban: In the Heat of the Moment

As the anti-vaping campaign in Russia gains momentum, Russian authorities have also set their sights on other forms of tobacco consumption.

In February 2024, Sultan Khamzaev, a member of the State Duma, proposed banning the production and sale of hookahs in Russia.

The lawmaker emphasized that the hookah is a "mass-consumption inhaler" that often is not properly sterilized. He added that one hookah can be used by dozens of people during the day, exchanging bacteria through the tube.

"There is a high risk of infection with staphylococcus, pseudomonas aeruginosa, COVID-19 and other infectious diseases that can have serious consequences for health," Khamzaev warned.

Khamzaev is known for making radical proposals related to the Russian tobacco market. In January 2024, he suggested nationalizing all internationally owned cigarette factories operating in Russia.

Over the past few years, the Russian authorities have imposed a series of restrictions on the use of hookahs in public places. However, observers believe the chance that hookahs will be completely banned in the country in the foreseeable future is close to zero.