According to statistical data released in September 2023, the production index of tobacco products in Russia has fallen by 18%, reaching 82% as of September 2023.
The decline in the tobacco industry has been evident since the beginning of the year, with one of the main factors being the proliferation of counterfeit cigarettes.
Price Increase and Consumer Shift
According to the data from the Russian Federal State Statistics Service, the average price of cigarettes increased by 7 rubles during the first three quarters of 2023. This rise in cigarette prices has resulted in consumers turning towards the counterfeit cigarette market.
Magnitude of Counterfeit Cigarettes
Estimations suggest that approximately 21 million packs of counterfeit cigarettes circulate on the black market in Russia every year, causing the country’s treasury to lose around 46 billion rubles (approximately 500 million USD) in the first half of 2023.
Impact on the Economy
The surge in counterfeit cigarettes not only affects public health but also poses a significant economic challenge for Russia, leading to dwindling revenue for the government.
To address this issue, the Russian government has implemented various measures, including stricter regulations, increased law enforcement efforts, and public awareness campaigns, to combat the production and sale of counterfeit cigarettes.
Collaboration between law enforcement agencies, the tobacco industry, and other stakeholders has become crucial in fighting against counterfeit cigarette production and distribution.
The Russian government’s determination to combat the counterfeit cigarette market and safeguard public health is expected to gradually improve the situation, leading to a potential revival of the legitimate tobacco industry.
The decline in the Russian tobacco industry is largely attributed to the rise in counterfeit cigarettes in the market. The increase in cigarette prices has driven consumers toward the cheaper and potentially dangerous counterfeit alternatives. To combat this pressing issue, the Russian government is taking steps to curb the production and sale of counterfeit cigarettes, working towards a healthier and more regulated tobacco market.
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