Three Major Changes In The Russian Market

December 19, 2023

I. Tightening policies, compliance is imperative

As we all know, the global e-cigarette market has entered the era of strong regulation, the past loose policy environment no longer exists, and actively embrace regulation to comply with the business trend.
This may be a head-on blow to companies that used to focus on "gray pass" products, but it is a good thing for the industry. After all, a market that drives out good money is not healthy.
We can get a glimpse of this from the following pieces of news:

On June 13, 2023, Russian President Vladimir Putin signed Federal Law No. 203-FZ "On State Regulation of the Production and Circulation of Tobacco Products, Tobacco Products, Products Containing Nicotine and Raw Materials for Their Manufacture," following the official entry into force of the "Honest Labeling" on April 1; and on April 11, at the plenary session of the State Duma, a series of laws were adopted on e-cigarettes. At the plenary session of the State Duma on April 11, a series of bills on the regulation of e-cigarettes were passed, including a ban on the addition of substances to e-cigarettes "in order to increase their attractiveness and/or increase the addictive properties of nicotine", a ban on the sale of e-cigarettes on-line and the display of e-cigarettes off-line, and an increase in the minimum price of e-cigarettes, among other major regulatory actions for e-cigarettes.

Beginning March 1, 2024, Russia will implement a regulation banning the sale of flavored e-cigarette products.

As of December 1, Russia will no longer allow the circulation of unlabeled e-cigarettes, e-liquids, and disposable e-cigarettes, the Center for the Development of Advanced Technologies (ЦРПТ), which operates Russia's national labeling system "Honest Labeling," TASS reported on December 1, according to the company.

The Russian government has proposed that the production, storage and supply of cigarettes, tobacco and e-nicotine products be subject to state licensing, according to a report by Russian media outlet pnp.

II. Economy Breaks Through Sanctions, Achieves Steady Recovery
Russian President Vladimir Putin said at the "annual stocktaking" event held in Moscow on the 14th to summarize the situation of the country's economic development, the Russian gross domestic product (GDP) is expected to grow by 3.5% in 2023.
In 2022, the Russian economy will shrink by 2.1 percent.
Putin said that the Russian economy has enough affordability to support its development. Both industrial production and manufacturing in Russia have grown, and the unemployment rate has fallen to 2.9 percent for the first time.
In addition, the size of Russia's national foreign debt has fallen from $46 billion to $32 billion. Putin said, "The fact that the country's foreign debt is falling is proof of both macroeconomic stability and the stability of the financial system."
Perhaps no one would have imagined that as the Russian-Ukrainian conflict enters the end of its second year, Russia's major economic sectors would still be able to recover steadily from unprecedented Western sanctions, and in some cases, have even fully recovered to near pre-war levels ......

III. A Multicultural Society Capable of Literature and Martial Arts
Russia is a country with a multicultural and multi-ethnic population, which has led to a very high level of demographic diversity.
Demographically, Russia's population is very widely distributed, with different regions having different ethnic and cultural backgrounds.
Culturally, Russia is a multicultural country. Russia has a long history and cultural heritage, and these cultural elements permeate all aspects of folk dance, music, literature, and art.
The percentage of nicotine-dependent Russians who smoke e-cigarettes has almost tripled over the past few years, the
Representatives of 500 companies and 2,500 economically active Russians participated in the study.
21% of respondents used only e-cigarettes, while 16% smoked both e-cigarettes and regular cigarettes. 2019 saw a decrease in such people - 8% and 12%, respectively. More women (33%) than men (14%) use e-cigarettes, with e-cigarettes being the most popular among those under 34.
Russians over 45 smoke traditional tobacco products - cigarettes, cigars and pipes.
On September 4, a survey by Romil showed that Russians are ready to buy illicit tobacco if the price of cigarettes increases.

The results of the survey showed that 61% of respondents were ready to switch to illicit products if the price of cigarettes increased by 10%.

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