Cigarette makers are fighting a last-ditch battle against a smoking crackdown in Russia, with three weeks left to change the government's mind. Russia should scale back the proposal that would ban smoking in public places, tobacco sponsorship and cigarette sales in kiosks, said Alexander Shokhin, the head of the Union of Industrialists, a lobby group for big business. Government legal advisers in August reversed their original approval of the anti-tobacco bill, recommending changes to the planned measures.
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While cigarette producers and the business sector support steps to cut tobacco-related health damage, "it's another question how exactly to proceed and which measures are effective and which aren't," Shokhin said in Moscow. "In several countries, a total ban has had the opposite effect." Russian President Vladimir Putin wants to curb smoking and alcohol consumption to stem the country's population decline. Thirty-nine percent of the 143 million people in Russia, the world's largest tobacco market behind China, are habitual smokers according to the World Health Organization. That compares with 28 percent in China and 27 percent in the U.S. The government is due to submit the bill to lawmakers by Nov. 1, outlawing all cigarette advertising and sponsorship immediately, with the bans on kiosk sales and smoking in public places taking effect Jan. 1, 2015. The government will resist pressure to weaken the proposal, said Alexei Levchenko, an aide to Russian Deputy Prime Minister Olga Golodets, who is responsible for health and social affairs. "There won't be any fundamental relaxation of these measures though some language may be adjusted," Levchenko said by phone after Shokhin's organization met ministers responsible for the law. Smoking-related diseases kill 23 percent of Russian men and cause economic damages equal to 6.3 percent of gross domestic product, according to the Health Ministry, which says the law may save 200,000 lives a year and cut smoking in half. Philip Morris, the world's largest publicly traded tobacco company and British American Tobacco, generate about a third of global sales in Eastern Europe, Africa and the Middle East. Japan Tobacco relies on the region encompassing Russia, the other ex-Soviet states excluding the Baltic countries, the former Yugoslavia, Bulgaria, Romania, Croatia and Mongolia for 46 percent of global sales volumes, according to its website. Tokyo-based Japan Tobacco, whose brands include Camel and Winston and is Asia's largest listed cigarette producer by market value, has about 37 percent of the Russian cigarette market. It is followed by 26 percent for Marlboro-maker Philip Morris, 21 percent for BAT and 9 percent for London-based Imperial Tobacco Group, according to the companies. The Health Ministry proposed raising the tax to 4,000 rubles ($128) per 1,000 cigarettes by the end of 2015 from 510 rubles this year, Finmarket, a unit of the Moscow-based Interfax news service, reported Oct. 8, citing a ministry document. The proposal escalates Russia's anti-smoking efforts as under current government policy, excise taxes were scheduled to increase about 40 percent a year between now and the end of 2014. A pack of Marlboros now sells for about $2 in Russia. The tax increase, if it becomes law, may push Russian cigarette consumption down by as much as 20 percent in 2015, according to Erik Bloomquist, an analyst at Berenberg Bank, compared with his current estimated annual decline of 1 percent to 2 percent. Australia this year became the first country to require cigarettes to be sold in plain packaging without any company logos. New Zealand and the U.K. are among countries whose governments have indicated interest in implementing similar action, which takes effect in Australia Dec. 1. Governments from Europe to Asia have toughened restrictions on smoking. Russia should continue to allow smoking in bars and restaurants in specially-isolated zones as well as tobacco sponsorship and cigarette sales in kiosks, according to Shokhin, a senior member of the ruling United Russia party. The Institute of Law and Comparative Jurisprudence, a government agency charged with vetting legislation whose board of trustees is headed by the speaker of the lower house of parliament, Sergei Naryshkin, in August criticized the anti- tobacco law. The institute, which last year gave its stamp of approval to the bill, said in a new assessment that "many aspects of the legislation don't correspond to constitutional principles of fairness, proportionality and adequacy." The same government body accepted a contract by Philip Morris to report on the legal aspects of planned warning labels on packs of cigarettes. Among aspects of the bill criticized by the institute were the planned ban on tobacco sponsorship and advertising and restrictions on the sale and display of cigarettes. The tobacco companies' efforts to overturn the anti-smoking legislation are "worrying because they have hired some very expensive lobbyists," said Dmitry Yanin, head of the Moscow- based International Conference of Consumer Societies. Enditem
