In Russia continues the growth of illegal cigarette market, the study showed

© RIA Novosti / Vladimir Travelanthrpist cigarettes. Archival photoIn Russia continues the growth of illegal cigarette market, the study showed© RIA Novosti / Vladimir Trefilov

Russian market of illegal tobacco products is far from abbreviations: a new study by Nielsen, which is available on RIA Novosti shows that the illegal sale of cigarettes in Russia in 2018 increased in comparison with the previous year and made up 8.36% at the end of the third quarter of 2018.

The study was commissioned by the largest tobacco companies — British American Tobacco (BAT), Imperial Tobacco, Japan Tobacco International (JTI) and Philip Morris International (PMI). Market analysis based on the study of empty cigarette packs that were collected in the Russian cities from late June to early August 2018. Sample — 15 thousand packs of the 89 cities, both large and small.

The results of the study are talking about growth of the share of illegally sold in Russia cigarettes in recent years. If in the second quarter of 2015, compared to 1.09% in the third quarter of 2016, the share rose to 2.45%, in 2017 — 4.5%, and by the end of July-September this year to 8.36%. The indicator considers as illegally imported to Russia products, and counterfeiting, as well as cigarettes intended for sale in duty free.

Where firewood

Belarus remains the main source of illegal cigarettes in Russia: according to Nielsen, it is of 36.66% of the illegal market. Armenia is 5,36% of the illegal market, Kyrgyzstan — 5,3%, Kazakhstan — 3%. Counterfeiting is only 6.64% of the illegal market.

According to the study, cigarettes with Russian warning labels, but suspicious of excise stamps is 12,38% of the illegal market; products whose origin could not be identified, but which contains Russian warning labels — of 11.51%. In the total volume of the market of such products in General is 2% (previous year — 0,68%).

Among the major cities the largest share of illegal cigarettes is fixed in Rostov-on-don (32,24%, and a year ago the figure was only 14,69%), Novokuznetsk (21,49% versus 4.96 per cent), Penza (to 15.65% vs of 1.74%), Omsk (of 15.12% versus 8,14%), Yaroslavl (14,29% against 2.26 percent), Chelyabinsk (14,18% vs 2.3%) and Barnaul (of 10.07% versus 5,76%).

In Moscow it is 4.05 per cent (a year ago to 1.54%), in St. Petersburg — 3,06% (compared to 2.79%). If we talk about cities with fewer residents, a high proportion of illegal cigarettes is observed in Rubtsovsk (Altai Krai, 58,75%), Klintsy (Bryansk oblast, 38,33%), Mines (Rostov region, 34%), Roslavl (Smolensk region, of 32.73%).

The share of illegal products is also great in Taganrog (Rostov region, of 30.67%), Mineral waters (Stavropol region of 28.33%), Novoaltaysk (Altai Krai, 23,33%), Berdsk (Novosibirsk region, 22,86%), Magnitogorsk (Chelyabinsk region, 22,38%), Bryansk (20,48%) and Smolensk (20%).

The share of Serbian manufacturer Monus (cigarettes Fast) in the tobacco market in the third quarter of 2018, is 0.21%. In addition, the market is still possible to meet and quite exotic brands of cigarettes, for example, bell (producer Bulgartabac), Greek (Sekap, 0.2 percent) or cigarettes from the United Arab Emirates.

The views of the industry

The results of the study were announced at the forum «Antikontrafakt-2018», which takes place in Moscow.

«Data from the study Nielsen we see that for the past three years, the share of illegal cigarettes in Russia is increasing annually by half. Today, every 12th pack of cigarettes sold without payment of excise duty and other taxes to the state budget», — said Vice-President of JTI, corporate Affairs and communications Russia Sergey Golovko, whose words are reported leading tobacco company.

«In order to halt the growth of the market in illegal tobacco products in Russia requires a set of measures, including tougher sanctions for the production and marketing of illegal products and improving the efficiency of law enforcement practice,» — said the Vice-President, corporate Affairs PMI in Russia Sergey Slipchenko.

«The introduction of the mandatory system of digital marking of tobacco products on the territory of the EAEU countries, allowing to control the production and payment of excise duty by the manufacturers, will help prevent entry in the market of illegal cigarettes, including products at prices below the minimum possible» — said Slipchenko.

In turn, the head of «BAT Russia» (the Russian structure of the BAT) to combat illegal trade Maxim Kurgan pointed out that the market has come to a critical point where the distribution of illegal products takes uncontrolled. «The only way to solve is to make the fight against the illegal trade of national priority and to ensure the inevitability of punishment for criminal activity,» said Kurgan.

«The package of measures should include curbing the prices of legally produced in Russia tobacco products to eliminate price attractiveness of cigarettes illegally imported from the CU. This can be done mainly by slower growth in excise tax rates on tobacco products in Russia, as well as accelerating the process of reaching agreement on the alignment of excise duty rates on cigarettes within the Customs Union», — said the Director for legal and corporate Affairs, Imperial Tobacco in Russia and Central Asia George Austin.In Russia continues the growth of illegal cigarette market, the study showed© Fotolia / wasansrisawatУченые called the best way to quit Smoking

The issue price

Market participants have repeatedly noted that one of the main reasons for the increase in illegal tobacco market in Russia is the gap between the cost of cigarettes in Russia and in the countries of the Eurasian economic Union (EEU), where tobacco products are cheaper.

Currently the excise rate on cigarettes and cigarettes in Russia is 1,718 thousand rubles per thousand pieces, plus 14.5% of the estimated cost, which is calculated from the maximum retail price, but not less than 2,335 thousand rubles per thousand pieces.

If you take the rate of excise duty to 2,335 thousand rubles per thousand cigarettes and to calculate the amount of excise tax per pack (of 20 cigarettes), it will make up 46.7 ruble. In addition to the excise tax, cost of a pack is included, including VAT (18% of the final value).

In Russia continues the growth of illegal cigarette market, the study showed© RIA Novosti / Michael Voskresenskiye in fotobanka prices and the illegal market: the risks from the increase in excise duty on sigaretnyj words, even if we assume a situation in which production, logistics and all other types of costs associated with the production and promotion of tobacco products are zero, a legal pack of 20 cigarettes, which was paid to excise and VAT in the Russian market can not be less than 55 rubles.

«The average cost of a pack of cigarettes in the low price segment in Belarus is about 31 rubles per pack, which is almost 2 times less than the tax component (excise and VAT) to the price of a pack in Russia, or almost 3 times less than the average cost of a pack of cigarettes in our country. In the absence of customs borders such a price gap encourages illegal trade,» — said the head of the JTI.

In Russia continues the growth of illegal cigarette market, the study showed© RIA Novosti, Integratiebeleid in fotobanka happens if you quit Smoking

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