What About Russia’s E-cigarette Market Amid Strong Regulatory Signals

On April 1, the Russian “Honesty Label” came into effect; Russia passed a package of regulations on E-cigarettes(HNB & Vape) for the third time in a row at the State Duma plenary session on April 11, including a ban on flavoring additives for E-cigarettes, a ban on online sales, offline display of E-cigarettes, and an increase in the minimum price of E-cigarettes(heat not burn tabac manufacturer).   On April 14, Russian media outlet 59.RU reported that some E-cigarette(heated herbal heatsticks) retailers in Perm had been revamped. Some stores use shutters to shield their vape counters, while others use dark vitrines to hide them. 59.RU said in the report that the new series of E-cigarette bans would not affect large enterprises, but would likely drive small enterprises out of the market.   Gray customs logistics providers consider turning to the white customs market   Recently, Russian electronic cigarette logistics supervision is more strict, mainly check whether the goods have “honest label”, whether “tax evasion”, logistics providers said gray pass products need to “see the time to receive goods”.   The so-called gray customs way, refers to in the clearance process of international trade goods transport, to artificially avoid part or all of the customs audit legal process, in order to avoid the tax payment of taxable commodities and other fees; Or through other artificial means of customs declaration, such as false declaration, concealment, wrong category of suppliers, to bribe part of the customs audit, to achieve the purpose of low tax or no tax entry of products.   A logistics provider mainly in the gray pass market said that in order to long-term development, it is now considering turning into the white Pass market, exploring the rules of the white Pass market, and striving for transformation. However, there are practitioners to do white market concerns, that “white price is too high.”   Existing dealers only accept white – pass products Wang Juncheng, general manager of Russian logistics company “Russo Clear”, told two supremes that the existing dealers only accept white products.   In addition, Wang Juncheng also revealed that white customs products in customs clearance has become more strict. ”Starting from April, imported E-cigarettes(heated tobacco heatsticks supplier) from Russia will need to provide EAC certification for the product, while before April, only the sticks will need to be submitted.” Wang Juncheng said, “If the EAC-certified tobacco oil products will have customs clearance problems.”   E-cigarette companies remain on the sidelines and are optimistic about compliance   Under a series of regulatory policies, the Russian e-cigarette market is broadly divided into three scenarios: large compliance dealers stay on the sidelines; Some large wholesalers are dumping goods; Another part of the dealers are individual categories of hoarding. From the feedback of logistics providers, there is no large increase in orders at present. The price of disposable e-cigarette products in Russia is set to rise, Russian media outlet 59.RU reported. The reason is that the government said it would set a minimum price, which would make it impossible to buy E-cigarettes at a low price anywhere. Retailers say the price of E-cigarettes may rise by 200 to 250 rubles, depending on how the supplier sets the price.   There are also domestic e-cigarette practitioners who say it is a good thing that Russia has set a minimum price because the current price confusion in Russia will disrupt the market. The majority of E-cigarette practitioner interviewed remain relatively optimistic about regulatory policy — there is currently no explicit ban on flavored E-cigarettes in Russia, nor is there a clear range of additives, suggesting that the Russian market for E-cigarettes will continue.   There is still an opportunity to retain the market, and proper regulation will enable Russia to expand the white market.