According to Bst.Bratsk on August 28, Russia will significantly increase the price of tobacco substitutes from September 1, 2024.
The Russian government will regulate the minimum prices of vapes, cartridges, hookah mixtures (including tobacco-free) and vape oils, which will cause prices to soar. The prices of some consumables will increase four to five times.
Russia will implement new requirements for the sale of tobacco products and formulate a minimum retail price (МРЦ) for such goods accordingly. Market participants have called these new measures “prohibitive consumption taxes.” These measures are likely to significantly reduce the prevalence of “alternative” smoking and force many Russians to return to traditional cigarettes.
It is reported that merchants must adjust product prices by the end of August to comply with the new regulations, that is, the price floor set by Decree No. 301 of March 14, 2024. However, due to a legal loophole, they need to adjust prices twice – the lower MRP that will come into effect on September 7 was confirmed in Decree No. 1050 of the Government of the Russian Federation issued on August 5, 2024. During this week, the temporary MRP will be very high (for example, the temporary MRP for 30 ml of vape nicotine oil is 2130 rubles (about $23), and from September 8, this price will be reduced to 1800 rubles [about $20]).
The new regulations will apply to all nicotine-containing products, including bottled oil, prefilled cartridges and disposable vapes.
According to Article 7, paragraph 6 of Federal Law No. 203-FZ of June 13, 2023, the government will calculate the minimum price of these products according to a formula that includes the excise tax rate, the VAT rate and the increase coefficient.
Although Decree No. 1050 slightly reduces the burden, consumer spending on nicotine products will still surge. For example, the minimum retail price (MRP) for e-liquid (nicotine and non-nicotine) will be 60 rubles (about $0.6) per milliliter, and a standard 30 ml bottle of e-liquid will cost 1,800 rubles (about $20). This is almost five times the current price, which is around 500 rubles (about $5) (according to the data of the “Honest Mark” system). A rough calculation shows that the current monthly consumption of 120 ml (4 bottles of 30 ml) of e-liquid costs about 2,000 rubles (about $22). From September 7, the same e-liquid will cost 9,504 rubles (about $104) (MRP is 1,800 rubles [about $20]/30 ml + the standard 10% markup by distributors + the 20% markup by retailers, a total of 2,376 rubles [about $26]).
Liquid in prefilled cartridges or capsules will cost 76 rubles ($0.8) per milliliter, three-ml cartridges will cost 228 rubles ($2.5); liquid in disposable nicotine systems will cost as little as 101 rubles [$1.1] per milliliter (14 ml for 10,000 inhalation patterns, or 1,414 rubles [$15]).
In 2024, the excise tax on vape liquids (containing 0.1 mg/ml and above of liquid nicotine) will be 21 rubles ($0.23) per milliliter, rising to 22 rubles ($0.24) in 2025. The excise tax on tobacco for heated consumption will be set at 9,016 rubles ($99) per kilogram in 2024, rising to 9,377 rubles ($102) in 2025.
At the end of April this year, the State Duma discussed a proposal to completely ban the sale of vapes in Russia. At the end of May, the State Duma and the Russian government announced plans to strengthen restrictions on nicotine products, including increasing fines for smoking in non-smoking areas and imposing fines of up to 7,000 rubles ($77) on parents of underage smokers under the age of 16.
Against this backdrop, Veehoo, a leading brand committed to product innovation and market expansion, has been advocating a green lifestyle. As the Russian government increases the price of tobacco substitutes, the vape market will usher in new challenges and opportunities. As a leader in the industry, how will Veehoo maintain its competitiveness and innovation capabilities in this change and provide users with high-quality products and services?
The implementation of this policy also reflects the strengthening of supervision and restrictions on the consumption of nicotine products. How will Veehoo actively respond to this supervision, continue to promote the healthy development of the industry, and provide users with safe and reliable vape products.
At this challenging time, Veehoo will continue to adhere to its brand concept, and is committed to providing users with more stable and diverse smoking options, leading the industry to a more standardized and healthy direction.
Tags: New policy on vapes in Russia，Russian vape prices rise，veehoo vape