MOSCOW, April 1. / TASS /. Russian tobacco factories have suspended work for a period of self-isolation and, therefore, do not exclude a shortage and growth of the illegal market. This was reported to TASS by representatives of tobacco companies.
“Tobacco products have indeed been excluded from the list of essential goods. According to a government decree, the BAT-SPb factory suspended its work on April 5. However, we believe that the production of tobacco products should continue,” said BAT's legal director and foreign relations of the subregion Russia, Central Asia, Belarus Yana Guskova.
She noted that according to the World Health Organization, in Russia there are about 36 million adult smokers. “Cigarettes are goods that cannot be replaced. Stopping the production and sale of cigarettes will provoke a rush of demand and, despite the presence of trade stocks, will lead to a shortage,” she said. At the same time, according to Guskova, the shortage of legal cigarettes will be instantly filled up with illegal tobacco products, whose share is 15.6% of the total.
In addition, according to BAT, the shutdown of the largest Russian cigarette manufacturers will lead to lost revenues to the budget of 10 billion rubles a week.
“The decision to expand this list can be made at the level of the leadership of the entities. Two factories are located in St. Petersburg that produce more than 50% of cigarettes in Russia. Our company has already asked Governor Alexander Beglov to include tobacco in the list of essential goods,” – said Guskova.
Other factories also stand
The shutdown of enterprises of legal manufacturers of tobacco products will inevitably lead to a shortage of legal cigarettes in the Russian market, the director of corporate and legal issues at Imperial Tobacco in Russia and Central Asia agrees. She noted that production at the Imperial Tobacco Volga factory was suspended for this non-working week.
For this period, the Philip Morris Izhora enterprise, located in the Leningrad Region, also ceased operations. Currently, consumers will still have access to existing tobacco products at retail outlets.
“However, the exclusion of tobacco products from the list of non-food basic necessities and, consequently, the suspension of production for a longer period may lead to the disruption of contracts for the supply of products to meet the demand of the population and a shortage of legal products. This situation can provoke an explosive growth of the illegal market and lead to serious losses to the federal budget due to a reduction in excise taxes, “said vice president of corporate affairs affiliated companies Philip Morris International Sergey Slipchenko.
Vasily Gruzdev, Director of Government Relations with JTI Russia, also announced the decision made by the company to suspend production for the period of declared non-working days. The company owns the Petro finished tobacco factory in St. Petersburg, as well as two tobacco processing companies in the Lipetsk Region and the Leningrad Region.
“We are doing everything in our power to ensure uninterrupted supply of the product to consumers. Product stocks are formed at all levels of the supply chain, but further suspension of operations can lead to disruptions in the supply chain,” he said. Gruzdev added that the company also advocates the inclusion of tobacco products in the list of non-food essentials or another government decision that will solve the problem.