Cigarettes were given a chervonets: tobacco will become more expensive, but will remain counterfeit

Officials hit prices on illegal nicotine again

Bad habits are becoming more and more expensive. Next year, the minimum cost of cigarettes will increase by ten rubles – up to 129 rubles per pack. The increase in tobacco prices is aimed at combating illegal products, since a product sold below the level established by officials is automatically “outlawed.” But, as practice shows, despite the regulation of tariffs on smoking, the volume of counterfeit goods in this market remains impressive and every seventh cigarette in Russia is a fake.

From January 1, 2024, the cheapest cigarettes and cigarettes in Russia will rise in price by about 8.5%: from 119 to 129 rubles per pack. According to the Ministry of Agriculture, which determined the price level, the calculation is based on the minimum tobacco excise tax rate, value added tax and increasing coefficient.

The noble goal of regulating the retail price of cigarettes is the state’s concern for the health of the nation. True, officials show such attention with a certain amount of slyness, because if a merchant demands less than the amount required by law for a pack, then his product is undoubtedly illegal and the smoker himself must be responsible for its quality. While fighting the shadow sector, the state does not forget about replenishing the federal budget. The unified price for tobacco products in our country is calculated from April 2021. This year alone, the minimum cost of cigarettes was increased twice: from January 1 (to 117) and from March 1 – to 119 rubles.

Now for the cheapest pack you will have to pay at least 129 rubles. However, it is almost impossible to find products in demand by consumers at such relatively cheap rates, since in the most affordable retail segment the cost of cigarettes exceeds 150 rubles, and the price of the most popular product is 200-220 rubles.

Setting a minimum price point is not the only method used by the government to counter “gray” smoking. Since September, the law “On state regulation of the production and circulation of tobacco products…”, aimed at regulating trade in “unhealthy” products, has come into force in Russia. The document obliges manufacturers and importers of nicotine products and raw materials not only to license their activities, but also to register their main factory equipment. The instructions also provide for the forced seizure and destruction of illegal tobacco products and factory machines in illegal circulation.

Until recently, the tool used by officials to combat counterfeit products raised doubts and was criticized. Despite the measures taken, the illegal trade in tobacco products in Russia, according to Philip Morris, has grown over the past ten years from 1% to 13%. The consequences were disastrous: in 2022 alone, the federal budget of our country, according to various estimates, received less from 80 billion to 100 billion rubles. This year, according to preliminary forecasts, at least 130 billion rubles will pass through the cash register. According to the executive director of the All-Russian public movement “For the Rights of Smokers” Andrei Loskutov, in a number of Russian regions, in particular those bordering Belarus, where a fair share of smuggling comes from, a pack of cigarettes can cost less than the amount of taxes that need to be paid for it – only 65- 80 rubles.

The rise in price of tobacco, which, although not included in the list of essential goods, is nevertheless a “bad habit” that ordinary people are the last to give up, also has a rather weak effect on the health of the population. According to a VTsIOM survey, in our country almost every third citizen can be called a heavy smoker. On the one hand, compared to 2013, the “nicotine army” decreased by 8%; on the other hand, compared to 2013, it remains quite impressive, and the payment of taxes by smokers brings tangible financial support to the state treasury – excise taxes stuck on packs alone can provide up to 1 trillion rubles annually.

Obviously, an increase in the minimum price of tobacco will stimulate an increase in the price of the entire line of smoking products, the prices of which, according to experts, will increase by at least 8.5%. In turn, whether the state’s tax steps will serve as a reliable barrier to counterfeit goods entering the market is an open question. According to Ivan Samoilenko, managing partner of B&C Agency, in the context of declining real incomes and deteriorating living standards, many citizens would rather save on products, but would not deny themselves the consumption of smoking.