
The 26th St. Petersburg International Economic Forum was held from June 14 to 17 at the St. Petersburg International Exhibition Center in Moscow, Russia. In the afternoon of June 15, a sub-forum themed "Combating Counterfeiting - A National Common Cause" was held, where government officials, enterprise representatives and industry experts from the Russian alcohol and tobacco industry held a dialogue to discuss the regulatory direction, future challenges and solutions of the Russian alcohol and tobacco industry. 2FIRSTS participated in the forum as invited media.
90% of E-Cigarettes are Illegal, The Law is Moving from Formulation to Enforcement
Ekaterina Priyesheva, Deputy Minister of Industry and Trade of the Russian Federation, noted that it is important to find a balance in the fight against counterfeit and illegal products. She said that the current government of the Russian Federation supports the development of business and inspection actions against peculiarities are decreasing, which makes inspection activities more effective and prevents the inflow of counterfeit and illegal products into the market.

Sergei Katasonov, co-chairman of the Russian State Duma Expert Committee on the Circulation of Nicotine Products, gave an update on the progress of Russia's tobacco regulation bill. He said that the regulation of the tobacco sector in Russia has come a long way and is moving from the development of laws to their implementation.
According to him, the Russian tobacco regulation bill has been signed by President Vladimir Putin, which includes the introduction of a licensing system, the establishment of a new regulatory body for the tobacco market, and the registration of equipment for the production of tobacco products.

Sergey Katasonov stressed that a major focus of the current tobacco market is on new nicotine products, especially e-cigarettes. Currently 90% of e-cigarettes on the Russian market are illegal products. He believes that the key to combating illegal nicotine products is to strengthen regulatory measures.
In addition, he believes that it is important for countries in the Eurasian Economic Union to strengthen the harmonization of laws in the field of tobacco. Governments should negotiate laws in order to reduce differences. He also mentioned the need to unify tobacco excise tax rates and stressed that countries should maintain the stability of tobacco tax rates, for example, if Russia raises tobacco excise tax rates, other countries should adjust their rates accordingly, and if Russia lowers its rates, other countries should limit the growth of their rates to keep them at a stable level of 13 percent.

Not a small percentage of the gray market needs to be combated in conjunction with digital technology
Oleg Balvin, General Director of British American Tobacco (BAT) Russia, shared the results achieved in the fight against illegal cigarette products in Russia. He said that up to 2 billion illegal cigarette products were confiscated in Russia in 2022, a 100% year-on-year increase, the total number of criminal offences related to illegal cigarettes was 2.5 times higher than this indicator in 2021, and the total amount of fines related to illegal cigarettes grew to 5 times higher than in 2021. He believes that although some results have been achieved in the fight against illegal cigarette products, there is still a gray market of 20-30%.
Oleg Balvin suggested that the government should, first of all, classify tobacco as a strategic national material and implement a tracking and navigation system to prevent illegal products from entering the country; secondly, it should include retail networks in its supervision and take appropriate regulatory measures to prevent offline retail outlets from "bypassing" national laws and regulations and continuing to sell illegal products.

In response to the proposal, Mikhail Dubin, chairman of the board of directors of the Center for the Development of Advanced Technologies (CRPT), the company that operates the Honest Label, noted that the Honest Label system can effectively regulate the behavior of merchants included in the system, and past irregularities in the store's practices will be entered into the system, creating a collection of company qualifications and information.

According to the data, there is an objective demand for honest labels, which are effectively used in different areas such as milk products, tobacco products, and water products. The honest labeling system effectively reduces the sale of illegal products to one twelfth of what it was before the system was applied, and reduces the number of counterfeit products by 164%.
