Tobacco Asia

Tobacco Asia 69 • Double your resource value • Use 100% expanded fine- cut for MYO and RYO • Untouchable product quality • Impex – pressure/vacuum technology • DIET - Dry Ice Expansion Technology AircoDIET has supplied more than 55 DIET plants worldwide, many of which have been turn-key. We continuously develop and refine the DIET process and our DIET plants have above 95% uptime with a dry yield better than 98.5% through the plant. www.aircodiet.com Over 100% tobacco expansion Lev Grigoriev, president of the Professional Alliance of Participants in the Rus- sian Electronic Nicotine Systems Market, says China currently remains the biggest supplier of disposable devices to Russia with a 60% market share. Meanwhile, the Russian market remains an area of interest for global tobacco producers. Some of these companies continue operations in the country and have suc- cessfully completed the licensing of their local businesses and production assets. For instance, Japan Tobacco International (JTI) successfully completed the li- censing of all four of its production facilities in Russia earlier this year. These include JTI Donskoy Tabak, JTI Yelets, Petro, and Cres Neva factories. JTI stands out as one of the most committed global tobacco producers to the Russian market, which it continues to view as a top priority for growth. To sustain its op- erations in Russia, the company has recently undergone significant restructuring efforts. Similarly, Philip Morris continues to operate in Russia, maintaining its presence in the market. In contrast, global majors British American Tobacco (BAT) and Imperi- al Brands previously exited the Russian market, selling their local businesses. However, some local analysts speculate that BAT may consider returning to Russia in the future, as the market has historically been a key priority for the company. According to local analysts, both Philip Morris and JTI continue to operate suc- cessfully in Russia, where the conditions for their activities remain favorable. This is largely due to the relatively liberal domestic legislation concerning tobacco and its al- ternatives. Unlike the EU and the US, many "anti-tobacco" laws in Russia were imple- mented with several years of delay. While tobacco companies in the West face hefty fines for violations, the financial sanctions in Russia remain relatively low, creating a more favorable business environment. Analysts suggest that one of the factors contrib- uting to this situation is the powerful tobacco lobby in Russia. One of the key reasons for the high interest of major tobacco companies in Rus- sia is the government's efforts in recent years to combat the influx of counterfeit to- bacco products, which have yielded positive results. Russia has made significant prog- ress in tackling illegal and counterfeit tobacco products, which previously dominated a large portion of the market. Kirill Volkov, head of the excisable commodity groups department at the CRPT, stated that the Russian tobacco market is gradually becoming more legitimate, as it is becoming increasingly difficult for "gray" market players to sell illegal products. "Positive effects from the introduction of tobacco labeling have been evident for several years," said Volkov. "In 2023, the operations of 15 illegal tobacco enterprises were suspended, and a total of 45 such enterprises were identified during the labeling period. This led to an additional RUB245.9 billion (US$2.94 billion) being contributed to the state budget." Tobacco product labeling in Russia officially began in 2019, with the final stage implemented on December 1, 2023. From that date onward, the sale of unmarked vapes, e-liquids, and disposable e-cigarettes is prohibited in the Russian Federation. Gains from the Russian market continue to attract tobacco companies.

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