The Russian Ministry of Industry and Trade has announced that the mandatory labeling of e-cigarette liquids, originally scheduled for November 1, will now begin on December 15.
Labels are required for e-cigarette cartridges, pods, and liquid, which are part of disposable e-cigarettes. Labeling measures are necessary because currently 95% of the e-cigarette liquid market is illegal.
Maxim Korolev, a member of the board of directors of the professional alliance for participants in the electronic cigarette market in Nizhny Novgorod, Russia, emphasized the legal position, stating that they had successfully conducted label experiments at the beginning of 2022. He stated that all of these had been tested and resolved, and that manufacturers had proposed expediting the introduction of these standards to the Ministry of Industry and Trade. The main issue in the electronic cigarette market, according to Korolev, is the prevalence of illegal products making it difficult for legitimate businesses to operate amidst high taxation rates. Discussions are ongoing regarding the possibility of further substantial increases.
To put it concretely, the introduction of labels does not affect the final price, but it may have a serious impact on reducing the share of illegal markets. In this case, prices will naturally rise, but not because the products themselves become more expensive, but because the tax-free share decreases.
If we only talk about importers and manufacturers and ignore retail delays, the quality of the market will not improve drastically. Additionally, if labeling becomes mandatory for retailers, prices will increase even more significantly, and there are two reasons for this.
Firstly, all levels of trade are starting to incur new costs. Secondly, some individual players who may be engaging in illegal online activity may also exit the market, resulting in fewer retail outlets and naturally causing prices to rise. All levels of trade are starting to incur new costs.
Experts have stated that the introduction of mandatory liquid labels could lead to a doubling of prices for e-cigarettes. This assessment was conducted as an initial study of the e-cigarette consumption market.
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