Understanding Russia's New Vaping Regulations in One Article: Without the "Honest Label" It Can't Be

portant;">● December 15, 2022: Manufacturers and importers register the" Integrity Mark "system;

● December 25, 2022: Manufacturing and Importe-cigarettesForce the "integrity mark" on products;

● March 1, 2023: Wholesalers and retailers register the" Integrity Logo "system;

● April 1, 2023: Mandatory" honest labeling "of e-cigarettes to upload data; unlabeled products cannot pass through Russian customs;

● In April 2023, relevant legal amendments (flavors, sales channels, minimum prices) were passed; signed into effect by the President of Russia;

● June 1, 2023: Operating restrictions on e-cigarette retail channels take effect;

● June 2023: The Tobacco Market Comprehensive Supervision Law was passed;

● September 1, 2023: Consumption tax increased; minimum price took effect; taste restrictions initiated; license application initiated;

● December 1, 2023: E-cigarettes that do not receive the" integrity mark "will be banned from circulation;

● March 1, 2024: Conduct comprehensive accounting and supervision of e-cigarettes from the production, distribution and retail;

The above are the various regulatory directions determined by Russia for the implementation of e-cigarette supervision over the past half a year, completely covering the necessary aspects of e-cigarette supervision such as law enforcement, taxation, circulation, products, and production. Next, we will start from each link:

Taste and access

The taste ban has not yet been activated, so you can sell it with the" honest logo "#p#pagination title #e#

The bill related to the taste ban was signed by the Russian President in May this year and is scheduled to be implemented in September this year. The relevant description of the bill is as follows: In order to reduce the appeal of e-cigarettes to minors, the manufacture and sale of nicotine products through flavors and additives are prohibited.

Many practitioners think that it must taste tobacco to get the" integrity mark ". This is not the case. Since the current white list of additives has not yet been announced, the "taste ban" does not actually exist, and some people even speculate that it will not be too strict.

The most well-known" integrity mark "among practitioners is essentially an ID card, similar to the traceability QR code of our domestic national e-cigarettes. The only difference is that there is a national standard in China and stipulates a white list of additives, and the traceability QR code system was specially created for e-cigarettes. However, Russia has long managed alcohol, dairy products and other industries through "honest labeling" and was not specifically created for e-cigarettes.

In other words, at this stagee-cigarette productsAs long as you obtain the "honest logo", you can continue to sell. Whether you can successfully obtain the logo has nothing to do with whether it smells like tobacco, because the "Russian national standard taste" has not yet been determined.

(Category information on the official website of Honesty Logo)#p#Pagination Title #e#

For example, Gewu's previous tweet on April 19," ZOVOO, ELFBAR and other brands have received Russia's "Honest Logo" also mentioned that flavored e-cigarettes from ZOVOO, ELFBAR and other brands from China have already received "Honest Logo."

Honesty said that the first major role at present is to crack down on counterfeit goods, because the proliferation of counterfeit goods has been one of the stubborn problems of Russian e-cigarettes for many years. For example, since February this year, arbitration courts in various regions of Russia have received reports from China e-cigarette manufacturersMASKKING Technology has filed more than 150 trademark protection lawsuits, claiming more than 6.5 million rubles.

As the main means to deal with counterfeit goods. Russia requires manufacturers, importers, wholesalers and importers to register the system. E-cigarettes with logos need to be scanned and entered into data at every link.

The official website of the Honest Logo System is still open for companies to register; at the same time, according to Gewu, e-cigarette suppliers need to order QR codes from the Honest Logo official website Chestny ZNAK. The price of a label QR code is 50 kopes (0.5 rubles, approximately 0.04 yuan, excluding value-added tax). Friends who need more information can visit the registration official website from the following links:

https://xn--80ajghhoc2aj1c8b.xn--p1ai/business/projects/tobacco/registration/

Circulation and retail

E-commerce has been completely shut down, and the number of offline stores has dropped

In order to eliminate a large number of grey-customs and black-customs products, Russia uses" honest logos "to conduct full traceability. Starting from December 25, 2022, manufacturers and importers will be forced to put on the" integrity mark ". Starting from April 1, 2023, products without obtaining the" integrity mark "cannot pass through customs (real execution). In other words, e-cigarettes that have not yet obtained the "integrity mark" cannot enter Russia through formal channels。

In terms of retail, Russia has completely banned the remote sales of e-cigarettes through e-commerce, unmanned sales through vending machines, and any sales in the form of door-to-door delivery through express logistics-in other words, a comprehensive return to offline e-cigarette stores.

The direct impact of this change is that Russia's well-known e-cigarette e-commerce companies have basically shut down or completely stopped online sales services. For example, the official website of VARDEX, Russia's largest e-cigarette e-commerce company, has sold any products since June 1.

Gewu learned from Russian retail media that Russia's online e-cigarette transaction rate rose by as much as 71% in the first quarter. Relevant sources analyzed that the increase in transaction volume was related to the news of" banning online sales ", which triggered e-commerce to clear inventory and reduce prices and a large number of users to hoard goods.

Russia has also implemented strict regulations on offline channels. According to the relevant regulations on the inspection of objects, Retailers are not allowed to publicly display or demonstrate e-cigarette products in stores (open shelves are not allowed). Only product lists with prices can be set up. In order to meet this regulatory requirement, Russian e-cigarette shops have adopted dark glass doors, shutters and other methods to block open shelves.
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As for the delivery process, the retailer can only display it to the consumer after the consumer checks the product list and specifies a product. At the same time, Russia has completely blocked physical advertising in stores. The product list must be in black characters on a white background, the products should be arranged in alphabetical order, with the same font size, and no pictures should appear-advertising through the product list must be prohibited.

Judging from the above delivery process, the most direct impact directly and greatly reduces sales efficiency. Russian retail industry experts predict that only 500 new franchise stores may be added in 2023, a decrease of 16% compared with 2022, which specifically mentionede-cigarette industryRegarding the decline in store demand, existing stores will also seek to clear inventory or even withdraw from the industry.

The decline in the number of e-cigarette stores can also be seen from VARDEX's recent decline in the number of offline stores。Since May, VARDEX has closed seven offline stores in succession, and only one store announced its opening in the same period. The overall number of stores has shown a downward trend.

Prices and taxes: Implement minimum prices and increase selling prices year by year

In order to reduce the demand for cigarettes, Russia will implement a minimum retail price limit on e-cigarettes starting from September 1 (naturally, discounts cannot be made at will). The minimum retail price setting standard is based on the minimum cigarette consumption tax rate and value-added tax rate calculation, and is determined by the government.

At the same time, the Chairman of the Russian State Duma made it clear that The consumption tax on e-cigarettes will be continuously increased through amendments to the tax law. Specifically, starting from March 1 this year, the consumption tax on smoking equipment has been cancelled, and the consumption tax on e-cigarettes has been increased by 11%, from the previous 18 rubles to 20 rubles/ml; next year, it will be further increased to 21 rubles/ml, and in 2025, it will be increased to 22 rubles/ml.

The direct result of the increase in tax rates is a general increase in the price of e-cigarettes in Russia. Local e-cigarette retailers estimate that the one-time retail price may increase by 200 to 250 rubles (about RMB 16 to 20), depending on the supplier.

Summary

Gewu has repeatedly pointed out that comprehensive compliancenew tobaccoThe market is supported by at least three aspects of supervision: product standards, tax plans, and regulatory regulations. At present, the product standards in the Russian market are not yet clear, so all regular products with complete procedures will enter Russia legally Ross can continue to sell at present.

It is worth noting that due to the tax plan setting a method of using a high tax rate with a minimum price limit to control market demand, and the regulations on extremely strict trading methods at the retail end, Russiae-cigarette marketThere is already a sense of pessimism. If product standards are also tightened very tightly, the Russian market is very likely to usher in an earthquake. We will also continue to pay attention to whether the "taste ban" is implemented.