FAS SUGGESTED THAT PARTICIPANTS OF THE TOBACCO MARKET SHOULD THEMSELVES DEVISE A CONCEPT OF INDUSTRY DEVELOPMENT

Representatives of the authorities and the expert community met at FAS to discuss the problems and prospects of developing the tobacco market

In view of the absolute priority of the state policy towards reducing the level of tobacco consumption, FAS believes that further steps in tobacco industry regulation must be taken in a balanced and systemic approach, taking into account all meaningful factors and through a broad public discussion.

Opening the meeting of the Expert Council for developing competition on the market of tobacco products, Head of FAS Fiscal Control Department, Vladimir Mishelovin, said: “Today’s agenda will determine development of competition on the tobacco precuts markets in the near future.  It concerns improving normative legal regulation, suppressing unlawful trade and learning from international experience of tobacco industry regulation. In the course of the Expert Council, it is essential to understand, which measures of normative regulation are excessive and which are sufficient for performing the main tasks of the state policy in this field”.

A member of the State Duma, First Deputy Chairman of the Budget and Tax Committee, Sergey Katasonov, who is a co-author of the draft law on the turnover specifics of Electronic Nicotine Delivery Systems (ENDS) and amendments to the Tax Code that introduce excise duties for ENDS, reported that the main regulatory task is a transition to a reasonable economic policy when excise duties on tobacco products are justified. He pointed out that such products must be excised depending on the nicotine content in them.

“Next year we plan to resolve the situation with counterfeit of tobacco products from Belarus, Kazakhstan and Kirgizia. We will find the ways to trace such products or suppress its circulation”, emphasized Sergey Katasonov.

Manager on Relations with the Authorities of “Philip Morris Sales and Marketing”, Konstantin Rainot, outlined the concerns of the market participants that 2017 - 2022 draft concept of the state policy to counter tobacco consumption is adopted without consultations with the industry experts.

According to the company representative, adopting the concept behind-the-scenes can infringe the interests of market players and generate social tension. He emphasized the importance of a broad discussion of the concept involving all stakeholders.

Commenting the remarks of Konstantin Rainot, Vladimir Mishelovin suggested that the expert community can devise a conceptual document on the basic principles of regulating and developing the tobacco industry, including innovative [products, and the principles of health protection of the population and countering tobacco consumption.

He clarified that “It should be a framework document in the full meaning of this world and predetermine the industry operations for years ahead”.

Vice-President of “OPORA” Non-Profit Partnership, President of the Small-Scale Trade Association, Vladlen Maximov suggested to review the 100 m threshold for tobacco trade ban.

Back to the illegal trade, Vasily Gruzdev, Director on Relations with the Authorities, “JTI Russia”, informed that most counterfeit comes from EAEU states, and Belarus is the leader.

Deputy Head of FAS Fiscal Control Department, Natalia Isaeva, gave a brief review of international practice of regulating the tobacco industry, using an example of the results of the VIII session of the Conference of the Parties to the Framework Convention of the World Health Organization on Tobacco Control* in Geneva (Switzerland).

She pointed out that tobacco industry regulation concerns more than healthcare and tobacco rejection cannot be achieved only through bans.

“Measures on decreasing consumption of tobacco products rather than complete ban should be considered since the latter can increase the share of counterfeit products”, clarified Natalia Isaeva. “We understand the importance of finding the balance between the interests of the population, the state and business in the position of the Russian Federation in international organizations”.

Natalia Isaeva informed that FAS is ready to take an active part in considering and alternative concept of the expert community on market regulation and development, and highlighted the administrative plans for 2019: “In the next year we intent to analyze the market of innovative nicotine-containing products.  We are confident that the findings will be interested to market players and regulators”.

Other speakers included Alexander Mironenko, Director on Relations with EAEU and Commercial Interests Protection of “Philip Morris Sales and Marketing”; Anna Vereschagina, a Senior Manager on Relations with the Authorities, “BAT SPB”; Alexei Alexandrov, a Senior Manager on Relations with the Authorities and Normative regulation, “IMPERIAL TOBACCO”; and Alla Mirgorodskaya, Head of the Production Technology Laboratory of Tobacco Products, the National Research Institute of Tobacco, Makhorka and Tobacco Products.

“FAS will forward the proposals of the Expert Council on improving public regulation to the interested authorities. Since today one can talk about intensive competition on the market, we call upon the companies to improve trade policies, devise and implement antimonopoly compliance. From our side, FAS is ready to offer all necessary methodological support”, concluded Vladimir Mishelovin.

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The Expert Council is formed to support and protect competition in tobacco sales sector and discus the pressing regulatory issues in this sector.

Representatives of the Ministry of healthcare, the Ministry of Industry and Trade, the Ministry of Finances, the Ministry of Agriculture of the Russian Federation, industry unions and market participants attended the event.

* The Framework Convention of the World Health Organization on Tobacco Control is the first international treaty of legal force in public health care.  Joining the Framework Convention, Russia undertook obligations to take into account the international treaty when developing the national law regulating circulation of tobacco products.