Tag: Russia

  • Russia goes for DIY tobacco

    Russia goes for DIY tobacco

    Russia’s economy started growing this year after two years of recession, but many people aren’t feeling any richer yet and this is something that is reflected in the cigarettes they are smoking, according to a qz.com story.

    Apparently, some smokers have turned to smoking cigarettes made with home-grown tobacco; so that while official figures indicate that smoking in Russia fell by about 20 percent between 2013 and 2016, the reality is probably somewhat different.

    Russians’ real disposable income fell for the fourth month in a row in October – a 1.3 percent drop from that of the same month of last year.

    In September, real wages were 13 percent lower than they were in 2014, when, according to Moscow’s Higher School of Economics, the recession started.

    Meanwhile, tobacco tax hikes have caused cigarette prices to nearly double since 2013 – a challenge to one of Europe’s heaviest-smoking populations.

    Hence the interest in growing tobacco at home.

    “Several governors have told me that last year people started planting tobacco in their dachas and gardens,” Sergei Ryabukhin, the head of the Russian Senate’s budget and finance committee said last week.

    “When you go to a region, you realize with horror that people have turned to growing tobacco or shag. According to official statistics [tobacco production] has fallen 21 percent and people are smoking less. But in reality it’s not like that.”

  • Vaping bans on way

    Vaping bans on way

    Russia’s Health Ministry is preparing a bill that, if passed, would regulate vaping and hookah smoking in the country, according to a Pravda Online story.

    The bill, which is set to be drafted by February, is expected to include a ban on vaping and hookah smoking in bars and restaurants throughout Russia.

    Ministry officials were quoted as saying that the general idea behind the bill was that vaping should be regulated in the same way that tobacco smoking was regulated.

    The officials said that, currently, a lot of adolescents used both hookahs and vaping devices, and that these products were not regulated.

    Reportedly, the bill will limit the sale of hookah and vaping devices to people over the age of 18.

    The story said – though it wasn’t clear whether this had come from the officials or not – that it was worthy of note that ‘US scientists found deadly toxins in vaping smoke, where the concentration of dangerous substances exceeds maximum permissible indicators’.

    ‘Those making up to 250 puffs per day with 3.8-4.8-volt devices, inhale acrolein, formaldehyde and diacetyl in above the mark quantities,’ the story said.

    ‘The concentration of harmful substances in the rooms where vaping is allowed exceeds admissible indicators as well.’

  • PMI investing in Russia

    PMI investing in Russia

    Philip Morris International intends to invest 2.49 billion rubles (US$42 million) in modernizing its factory in the Leningrad region of Russia, according to a Construction.RU story.

    Construction.RU said that it had been told on Tuesday by the regional administration’s press office that the work was due to be carried out in 2017-18.

    It said the project would be one of biggest to have been undertaken in the region for years.

    Following completion of the modernization, Russia would follow Italy in becoming a base for the manufacture of tobacco sticks for heated-tobacco products.

    Last month, PMI said that its wholly-owned subsidiary, Papastratos, had begun transforming its factory in Aspropyrgos, a suburb of Athens, Greece, into a producer of tobacco sticks to be used in PMI’s iQOS heated-tobacco product.

    The plan was to use Greece as one of the PMI’s bases to produce sticks for exports to more than 30 countries by the end of 2017.

  • Huge illegal trade in Russia

    Huge illegal trade in Russia

    About 35-40 percent of tobacco products sold on the Russian market are illegally produced, the Russian business ombudsman Boris Titov said in an annual report to the Russian president.

    The report was the subject of a story in Russia Beyond The Headlines quoting TASS.

    According to the most cautious estimates, the share of illicit products had already reached 35-40 percent, which had dealt a serious blow to the budget of the Russian Federation, the report said.

    The report expressed concern also about the ‘quality’ of the illicit products.

    The business ombudsman suggested creating a unified state mechanism to control the tobacco market, similar to the Unified State Automatic Information System (EGAIS) for alcohol products, developed by the Department for the State Regulation of the Economy and the Ministry of Economic Development and Trade.

    This computerized system gathers information about the use of raw materials, such as ethyl alcohol and other related products, as well as production volumes and left-over raw materials.

    Under the Russian law, all manufacturers, wholesalers and importers must register with EGAIS.

    The Russian Finance Ministry said earlier that legislation enabling a similar control mechanism on the tobacco market was to be passed during the parliament’s spring session.

    The government is said to be discussing various projects aimed at enhancing state control of the tobacco industry at all stages of its manufacturing and trade.

  • Sales ban proposal attacked

    Sales ban proposal attacked

    Tobacco companies in Russia believe that a proposal to ban the sale of tobacco products to people born after 2015 would adversely affect consumers, legal producers and retailers, according to an ITAR-TASS story relayed by the TMA.

    The proposal was unveiled recently by the Russian health ministry.

    Such end-game proposals have been discussed extensively elsewhere, recently in Tasmania, Australia; but so far no country has introduced regulations along these lines.

    Commenting on the Russian government’s proposal, Sergey Slipchenko, vice president for corporate affairs at PMI Russia, said it was “superfluous” and unlikely to curb consumption among young people.

    On the contrary, he added, it might lead to adverse consequences – particularly to an accelerated growth in the illegal trade in tobacco products.

    Sergey Kiselev, vice president of corporate affairs and communications at JTI Russia, said such measures “undermine operations of the legal industry, accelerate substitution of legal products by cheaper counterparts from the shadow market and ultimately undermine stability of tax deductions to the budget”.

    And Yana Guskova, BAT Russia’s external corporate affairs director, said there was a need to make an independent comprehensive assessment of the regulatory impact of the proposal. The ITAR-TASS story said the companies unanimously believed that the proposal would adversely affect consumers, legal producers and retailers.

  • End-game policy mooted

    Russia photoThe Russian health ministry has unveiled plans to ban the sale of cigarettes to anyone born after 2015, according to a story by Will Worley for the independent.co.uk.

    Such end-game policies have been discussed extensively elsewhere, recently in Tasmania, Australia; but so far no country has introduced regulations along these lines.

    Although such cigarette purchase prohibitions are fair to existing smokers who are permitted to continue to buy them if they want to, and not unduly unfair on those who have not yet taken up smoking because they are underage, opponents point to the difficulties likely to be encountered in enforcing a prohibition on only a part a community.

    Russia, which was for a long time was tolerant of smoking, has become less so in recent years.

    Citing a report in The Times, Worley said that Nikolai Gerasimenko, a member of the Russian parliament’s health committee, had been quoted as saying that the “…goal is absolutely ideologically correct”.

    But a Kremlin spokesman said such a ban would need serious consideration by and consultation between ministries.

    Worley, citing the Tass news agency, reported that the number of smokers in Russia had dropped by 10 percent last year.

    He said that the country’s smoking prevalence, at 31 percent, was the lowest it had been ‘in years’.

  • Iggesund expands services for Eastern Europe

    Iggesund Paperboard—Europe’s third-largest manufacturer of high-quality virgin fiber paperboard—is expanding its services for Eastern Europe by establishing a new freight terminal in Riga, Latvia, as well as a sales office in Moscow, Russia, to boost Russian sales. Construction of the two new facilities is part of Iggesund’s long-term plan to cultivate its delivery services on a global scale.

    “We need to be near the customer both in terms of deliveries and other services required by today’s customers,” says Rikard Papp, director Asia Pacific & Merchants Europe at Iggesund.

    Iggesund will also take part for the second time in the RosUpack exhibition, which will be held June 16-19 in Moscow.

    “The intense interest we met with last year convinced us that we should establish a sales office for the Russian market. It is a major market that definitely has room for a high-end product like [our flagship product] Invercote,” says Papp.

    Iggesund Paperboard’s terminal in Riga became operation in April, and the sales office in Moscow will be inaugurated in July.

     

     

     

  • China plans to grow tobacco in Crimea

    The Crimean government has announced that a visiting delegation of Chinese businessmen intend to invest in tobacco cultivation within the territory, which was annexed by Russia in March 2014. Chinese equipment and technology would be supplied to the semiautonomous territory, which has been fighting to secure foreign investment amid trade sanctions imposed by Ukraine, the United States and the European Union following Russia’s annexation of the region.

    “Tobacco is in huge demand in China, and Crimea has a suitable climate and soil for tobacco cultivation,” the delegation’s leader, Chen Zhijun, was quoted by news agency TASS as saying at a meeting with Crimean leader Sergei Aksyonov.

    Aksyonov and Chen on June 4 signed a protocol on investment cooperation, according to a press release posted on the Crimean government’s website.

  • PMI and JTI acquire stakes in Russian distribution firm

    Photo: scaliger

    Philip Morris International and Japan Tobacco International are acquiring equity stakes of 20 percent each in Megapolis Distribution, the holding company of CJSC TK Megapolis, a major distributor in Russia.

    The companies are paying $750 million each for their stakes. If Megapolis’ operational performance meets certain benchmarks during the four fiscal years following the closing of the agreement, PMI and JTI will each pay an additional $100 million.

    Megapolis is one of Russia’s leading consumer goods distributors focusing principally on tobacco and beverages. It employs almost 15,000 employees and commands a direct store delivery system that reaches more than 150,000 points of sale. Megapolis handles approximately 70 percent of the cigarettes sold in Russia through its distribution agreements with PMI, Japan Tobacco International and Imperial Tobacco Group.

    “We are delighted to reach this agreement with Megapolis, our proven distribution partner, which will support our business expansion in this profitable market,” said Miroslaw Zielinski, PMI’s president, Eastern Europe, Middle East & Africa Region and PMI Duty Free.

    “Megapolis has been our partner since 2007 and has contributed to JTI’s success in the important Russian market,” commented Kevin Tomlinson, JTI’s regional president, commonwealth of independent states. “This acquisition will strengthen their distribution platform allowing us to implement our growth strategy in the region more efficiently and effectively.”

  • Tobacco among top Russian exports

    Tobacco factories feature prominently on a list of leading Russian exporters recently published by Expert Severo-Zapad.

    According to the business magazine, British American Tobacco in St. Petersburg leads the pack with export revenues of $91.9 million last year. Philip Morris Izhora exported tobacco products worth $70.9 million in 2012, up 15.1 percent from the previous. JTI’s Petro factory came next with exports worth $57.2 million, up 20.7 percent from 2011. JTI’s Kres Neva tobacco processing plant saw its export declining 56.6 percent to $14 million.