The Growing Popularity and Illegal Trade of E-cigarettes in Russia

According to data from the Federal Tax Service and data from the Union of Industrial Enterprises for Nicotine Products (SPINI), the electronic cigarette market in Russia has grown 49.3 times from 2018 to 2021, increasing from 28.5 billion rubles to 1.4 trillion rubles. In 2021, a total of 67 million electronic cigarettes and 9-1 million liters of refillable liquid were sold nationwide.

At the same time, if earlier these types of products were mainly purchased by people under the age of 35, today electronic cigarettes are becoming increasingly popular among older generations. Additionally, electronic cigarettes are not subject to as many restrictions as traditional cigarettes and emit pleasing aromas. This appears to be pure enjoyment without compromising health.

Russian counterfeits.

According to a study by SPIN, one-seventh of electronic cigarettes and one-tenth of e-liquid will be illegally produced in Russia by 2021. Labor unions believe that the proportion of illegal circulation of e-cigarettes and their liquids is at an extremely high level. These products are all domestically produced or imported through gray channels.

Perhaps some of the products are safe, but they are being sold without being properly taxed. However, their improper storage conditions are affecting the quality of electronic cigarettes. According to SPINIE, 49 million fake electronic cigarettes were sold on the internet last year, totaling 25 million rubles.

The College of Economics has discovered that 99.9% of electronic cigarettes sold last year were illegal. Out of 67 million cigarettes sold, only 15,000 were taxed. Additionally, 68% of the supplements for electronic cigarettes and e-liquids were not taxed.

Against this backdrop, the industry association is requesting that the government quickly assign an OKVED code (All-Russian Classifier of Types of Economic Activities) to the e-cigarette industry by the end of this year. Currently, the industry lacks both OKVED and OKPD codes, which makes it difficult for the industry to be subject to taxation, customs, and statistical records. Furthermore, the industry is calling for the swift implementation of digital labels, which is a tool to combat illegal products and has already been implemented on many goods.

The introduction of mandatory labeling for electronic cigarettes is expected to reduce the number of counterfeit products on the market. However, it will not have an impact on the number of smokers. The labeling experiment will begin on February 15, 2022 and is planned to run until March 1, 2023. However, the Ministry of Industry and Information Technology has proposed accelerating the implementation, with mandatory labeling to be introduced as early as November 1. The Ministry believes that mandatory labeling is the only effective way to quickly identify and crackdown on the illegal circulation of such products.

Furthermore, it will provide support to legitimate producers of such products by "reducing unfair price competition from illegal manufacturers." In turn, this will lead to an increase in tax revenue for Russia.

The significance of the markings.

Electronic labeling may help combat counterfeit products and generate additional funds for budget purposes. However, it will not reduce the number of smokers or make cigarettes and e-cigarettes any healthier for the body. This opinion was expressed by Yaroslav Nilov, chairman of the Labor, Social Policy, and Veterans Affairs Committee and a representative of the Liberal Democratic Party in the Russian State Duma.

The Ministry of Health shares the same view that electronic cigarettes should not be provided for free. If electronic cigarettes are not banned, it will be impossible for the country to achieve its goal of cracking down on tobacco and nicotine consumption. This was expressed by Marine Gambaryan, head of the National Center for Prevention and Control of Tobacco Consumption, who works for the Russian Ministry of Health's Treatment and Prevention Medical Research Center, in an interview with RIA Novosti.

The electronic cigarette market is currently almost entirely unregulated. Prior to the enactment of regulations for nicotine-containing products, tobacco products had only a single, universal set of regulations. Pavel Shapkin, Chairman of the National Consumer Rights Protection Alliance, stated that private companies are currently verifying compliance with established requirements, and a positive result will be sent remotely via email for a fee of 3000 rubles.

If a recommendation is made to bring a new plant growth stimulant or insecticide to the market, it requires years of testing. Registering a new drug is a time-consuming process. However, when it comes to e-cigarettes, no such testing is conducted and they are simply labeled as potentially harmful to their packaging. Where is the logic in that? Sandberg asks. He believes that additional restrictions should be introduced for e-cigarettes instead.

What is the extent of harm caused by e-cigarettes?

Doctors are calling for a ban on the sale of e-cigarettes, as they are said to be ineffective in helping smokers quit. Marine Gambaryan notes that e-cigarettes contain synthetic nicotine, which is absorbed into the bloodstream through the aerosol inhaled into the mouth. This method of nicotine delivery can actually be faster than smoking regular cigarettes, leading to quick addiction formation.

Pavel Shapkin is not only dangerous, but substances like glycerin used in e-cigarettes can produce vapors that enter the body and cause heart problems and other negative consequences. Earlier this year, the National Academy of Sciences released a study on the health effects of e-cigarettes, which revealed disappointing results. The conclusion was that e-cigarettes may contain potentially harmful substances apart from nicotine.

Finally, electronic cigarettes can explode, causing burns and injuries. Their use can lead to seizures, hypoxia, vomiting, and even death. For example, in early summer this year in Yekaterinburg, a teenager had an electronic cigarette explode in his mouth. As a result, his lips were injured, his teeth were knocked out, and his forearm was burned.

The situation in other countries.

Many countries in Europe and Asia are implementing various restrictions on the sale of electronic cigarettes. Argentina and Brazil have already banned the import, sale and promotion of e-cigarettes. Distribution and advertising of e-cigarettes have been banned in Belgium, Canada, Denmark, Netherlands and Norway. In Brunei, selling e-cigarettes could result in a $10,000 fine. In Austria, a medical license is required to purchase e-cigarettes. In Australia, nicotine is classified as a poisonous substance, prohibiting any circulation in the country. In Hong Kong, e-cigarettes are also considered poisonous - you can go to jail for selling them.

In Thailand, electronic cigarette users not only face fines but also prison time for consuming, importing, using, or carrying e-cigarettes. However, in New Zealand, vaping is seen as a viable option for quitting traditional cigarettes and the government is actively promoting it.

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