Mandatory digital labeling of raw materials for cigarettes is launched in Russia

Main article: State information system for marking goods.

The primary goal of the project is to protect the health of consumers and to automate the accounting of each pack at all stages of its production. Marking and tracing allows you to verify the authenticity of tobacco products and prevent their illegal production, import and circulation.

2024: Mandatory digital labeling of raw materials for cigarettes is launched in Russia

The labeling requirements for tobacco products and nicotine-containing products now also apply to raw materials for their production. The decree on this in early March 2024 was signed by the Chairman of the Government of the RFMikhail Mishustin.

According to Vedomosti, citing the text of the decree, manufacturers of tobacco and nicotine-containing products will be required to transfer all data on raw materials to the state marking system Honest Sign. According to government representatives, with the help of new requirements, it will be more convenient to track both the raw materials themselves and the finished goods from it. This should lead to a reduction in the volume of counterfeit and illegal tobacco products.

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Digital labeling of cigarettes was introduced in Russia in 2019. Subsequently, fines were introduced for the transportation of unmarked tobacco, and then this norm was extended to vapes and e-cigarettes.

According to the deputy head of the Ministry of Industry and Trade Ekaterina Prizhedeva, the labeling of tobacco products in three years added 245 billion rubles of additional income to the country's budget by suppressing the illegal circulation of cigarettes and other tobacco products.^[1]

2022

Launch of mandatory labeling of vape liquids in Russia

In November 2022, Prime Minister Mikhail Mishustin signed an order on the introduction of mandatory digital labeling of liquids for vapes and other electronic smoking systems from December 15, 2022.

According to the document, from mid-December 2022, tobacco and tobacco products intended for "consumption by heating," as well as "liquids for electronic nicotine delivery systems, including nicotine-free ones, in cartridges, capsules, as part of electronic single-use nicotine delivery systems, are subject to labeling."

Mandatory labeling of vape liquids is launched In the Russian Federation

On February 15, 2022, an experiment began to label certain types of nicotine-containing liquids and electronic nicotine delivery systems.

Earlier, the Ministry of Industry and Trade of the Russian Federation specified that the introduction of mandatory labeling by identification means is provided only for liquids for electronic nicotine delivery systems and disposable such systems. Reusable electronic devices that heat or generate such liquids, such as aerosol, will not be subject to labeling.

Viktor Zykov, a member of the coordinating council for tobacco control under the Ministry of Health of the Russian Federation, says that mandatory labeling of liquids for vapes and other electronic cigarettes is aimed at whitewashing the market.

This means that excise taxes will be paid from these products, all taxation will be present. This will provide the price that should be. If the price of a liquid is at least 17 rubles per milliliter this year, and in the store these bottles of liquid cost 380 rubles 30 milliliters. Such a cost cannot be, there is only an excise tax of more than 500 rubles for this bottle. That is, this liquid is sold without paying excise, it is illegal, and it is available. But it should cost at least 700 rubles in any way, "he said.[2]

Ministry of Industry and Trade introduces mandatory labeling of electronic cigarettes

In August 2022, it became known about the decision of the Ministry of Industry and Trade to launch mandatory labeling of electronic cigarettes and liquids with nicotine content (ESDN) from November 1, 2022. The agency referred to numerous requests from "business communities and participants in the circulation of nicotine-containing products" for the early completion of the experiment and the early introduction of mandatory labeling.

The Ministry of Industry and Trade supported the initiative of the business community and considered it expedient to also support the early completion of the experiment with the simultaneous introduction of mandatory labeling. The department noted that this should help combat the illegal circulation of nicotine-containing products.

Ministry of Industry and Trade decided to introduce mandatory labeling of electronic cigarettes

The Ministry of Industry and Trade cited data from the research company Euromonitor International, according to which in 2021 sales of electronic cigarettes and liquids for refueling electronic cigarettes in Russia amounted to 37.5 billion rubles, in total, more than 67 million pieces of electronic cigarettes and 9-10 thousand liters of liquid for their refueling are sold in Russia annually. At the same time, according to expert estimates, budget losses from non-payment of excise taxes on these products reach 28.5 billion rubles for 2021, the explanatory note says.

According to the document, from November 1, 2022, registration of industry participants in the labeling system will become mandatory, from December 1, 2022, mandatory labeling will begin to operate, and from April 1, 2023, business will have to transfer information on the sale of labeled products to the labeling system.

Earlier, the Ministry of Industry and Trade opposed the abolition of sales of electronic cigarettes. On July 28, 2022, the department, referring to numerous notifications from market participants, announced the need to prematurely introduce mandatory labeling of nicotine-containing liquids and electronic nicotine delivery systems.

The ESDN labeling experiment has been carried out since February 15, its completion was expected on February 28, 2023.^[3]

Digital labeling of tobacco sticks begins in Russia

The Russian government has included tobacco products intended for consumption by heating, as well as mixtures for hookahs that do not contain tobacco, in the digital labeling system. It will begin on March 1, 2022. The corresponding decree was signed in February 2022 by Prime Minister Mikhail Mishustin.

According to the document, the mandatory disposal of sticks and mixtures from circulation through cash desks comes into force on March 15, 2022, and from October 1, 2023, the circulation of unmarked products is prohibited.

As always, before the introduction, the digital labeling system was tested in the category of tobacco sticks and tobacco-free mixtures for hookahs in an experimental mode. It is worth noting the high level of responsibility and organization shown by business during the experiment. Thanks to the operational work of manufacturers and involvement in the retail and wholesale process, it was possible to start saturating the market with labeled products last year. Currently, there are already sticks and mixtures on the market protected by the Honest Sign, said Andrey Zheleznov, head of the Tabak commodity group.

Digital labeling of tobacco sticks begins in Russia

According to him, retail and manufacturers are fully ready to fulfill the requirements of the decree, since since 2019 they have been successfully working with cigarette labeling. The timing will not cause any difficulties, he said.

The Cabinet notes that tobacco labeling is being consistently introduced in Russia to reduce illegal circulation. It is already subject to cigarettes, alternative tobacco products. An experiment is also underway to label e-cigarettes and liquids for them. Thus, the labeling system in mandatory or pilot mode already includes all nicotine-containing products presented on the Russian market.^[4]

Doubling fines and forfeiture for lack of digital labelling

In February 2022, fines for the production and circulation of unmarked tobacco and alcohol products were increased. Administrative responsibility for the transportation of products with such violations also appeared.

For production, the fine for officials was increased from 10-15 thousand rubles to 30-50 thousand with confiscation, for legal entities - from 100-150 thousand to 200-300 thousand rubles with confiscation.

For the turnover of alcohol and tobacco without mandatory digital labeling, the fine for citizens increased to 10-20 thousand rubles instead of the previous 4-5 thousand, for officials - 30-50 thousand instead of 10-15 thousand rubles, for legal entities - from 300 thousand to 500 thousand instead of 200-300 thousand. This also provides for the confiscation of such products.

Tobacco and alcohol without digital labeling began to be confiscated in Russia

On February 28, 2022, an experiment was completed on the labeling of certain types of nicotine-containing products. From March 1, 2022, their labeling will become mandatory. We are talking about tobacco and tobacco products intended for consumption by heating, as well as smoking mixtures for hookah that do not contain tobacco.

According to the Ministry of Industry and Trade, the introduction of tobacco labeling made it possible to significantly increase excise taxes. They grew by 33.2% - from 258 billion rubles in the first half of 2020 to 344 billion in the first half of 2021. A significant part of this growth was provided by an increase in the excise rate by 20%. But the tax base itself increased by 10%, and this is 30 billion rubles of additional accruals, said State Secretary, Deputy Minister of Industry and Trade Viktor Yevtukhov.

According to the National Scientific Center for Competencies in the Field of Combating Illegal Trafficking of Industrial Products (NNCC), according to the results of nine months of 2021, the share of illegal trafficking in the tobacco market amounted to 11.5%.^[5]

2021: Reduced share of counterfeit goods

The share of counterfeit tobacco products has been growing steadily for several years and reached 15.6% in 2019, and at the end of 9 months of 2021 it decreased to 11.5%. And this is despite the growth of excise taxes - the main incentive of the gray market.

2020

Introduction of digital labeling of e-cigarettes and smoking mixtures

On December 29, 2020, the Government of the Russian Federation published a decree on an experiment on labeling electronic cigarettes and smoking mixtures. It will begin on January 11, 2021 and will last until February 28, 2022. The initiative will affect nicotine-containing products, including tobacco and tobacco products intended for consumption by heating, and smoking mixtures for hookah that do not contain tobacco.

Digital labeling of electronic cigarettes and smoking mixtures is introduced in Russia

As the goals of the experiment, it is stated:

• coordination with manufacturers, importers of products, wholesale and retail trade organizations of the composition of information about the product, allowing to identify the commodity unit;
• testing the technology of applying identification means to products, search for optimal marking methods;
• testing the completeness and sufficiency of labeling mechanisms in order to counter the illegal import, production and circulation of products, including counterfeit products, as well as to increase the collection of customs and tax payments;
• organization of effective interaction of state authorities, including control bodies with turnover participants;
• assessment of the effectiveness and effectiveness of the information system used for the purpose of the experiment;
• implementation by participants of the turnover of the primary filling of the subsystem of the national catalog of labeled goods;
• development of proposals on amendments to the legislation of the Russian Federation on product turnover, including proposals on the introduction of terms, conditions and stages of entry into force of the requirements for mandatory labeling of products.

The press service of the Ministry of Industry and Trade told TASS that the experiment on the labeling of nicotine-containing products is carried out voluntarily, so it should not lead to an increase in prices for these goods. The agency is responsible for coordinating the creation and operation of the IT system used for the experiment. The ministry was instructed to prepare guidelines and a schedule for the experiment by February 28, 2021, and to submit a report with assessments of the results to the government by August 31, 2021.^[6]

In the system of digital marking of tobacco may introduce a moratorium on violations

On June 24, 2020, it became known that a moratorium on prosecution for violations may be introduced for participants in the digital labeling system, which will become mandatory for medicines, shoes and tobacco from July 1. This was stated by Vera Volkova, Director of the Department of General Business Analysis of the Center for the Development of Advanced Technologies (CRPT), during an online conference on labeling organized by the Chamber of Commerce and Industry of the Russian Federation.

Such an initiative is under consideration by the government of the Russian Federation. This will allow market participants to avoid penalties and more smoothly switch to new rules of operation.

Manufacturers and importers came out with a proposal to introduce a moratorium on the submission of information on the shipment and acceptance of goods to the digital labeling system.

About 200 thousand turnover participants work in the digital labeling system for three groups of goods - tobacco, medicinal products and shoes. New participants are registered in it every day. To launch the system on time, the technical support service was almost one and a half times increased in the CRPT, information on the most popular issues was structured. A training center for turnover participants has also been launched - it works free of charge online on the Honest Sign website.

In the regions, consulting centers are being created on the basis of headquarters, said Ekaterina Prizhedeva, director of the department for the digital labeling of goods and legalization of product turnover of the Ministry of Industry and Trade. All topical issues on the launch of mandatory labeling from July 1 are discussed every week at an interdepartmental working group.

Pharmaceutical market participants asked to postpone the start of drug labeling In May of this year, several load tests of the marking system took place. Basic indicators for drugs were exceeded eight times, for shoes - four times, for tobacco - twice.^[7]

Japan Tobacco International Implements Labeling System

On June 19, 2020, Taxcom announced the introduction of a product labeling system at Japan Tobacco International. Japan Tobacco International, as a manufacturer of tobacco products, was faced with the task: by July 2019, not only to fully equip production lines with a code application system, but also to launch an electronic document flow with data transfer to the MOTP between its legal entities, taking into account all the requirements of the CRPT. Read more here.

2019: Start preparation for alternative tobacco labelling pilot

On June 24, 2019, the Ministry of Industry and Trade of Russia held the first meeting of the design and expert group on digital labeling and tracing of alternative tobacco products (cigars, cigarillos, bidi, kretek, smoking tobacco, tube, chewing, snuff, for hookah). In addition to the regulator, 12 companies engaged in the production and import of products and the system operator Center for the Development of Promising Technologies took part in it.

The parties discussed the readiness of the industry for the start of a pilot project preceding mandatory labeling, as well as possible labeling methods and optimal timing. The companies "Intro Group," "Point Art," "Cigar House of Fortune Logistic," "Nesca" expressed their readiness to start testing before the official signing of the document on the launch of the pilot to work out all processes and start working with digital codes. CRPT has already tested several options for applying the code, including by labeling. As noted, this method is minimally costly for the industry.

On June 24, the draft resolution on the launch of the experiment is undergoing approval procedures. According to the Decree of the Government of the Russian Federation No. 224 of February 28, 2019, mandatory labeling of alternative tobacco products will begin on July 1, 2020, and by July 1, 2021 it is planned to completely stop the turnover of unmarked products.

Yan Vitrov, head of the Tabak commodity group of the Center for the Development of Advanced Technologies, noted that within a month after the release of the decree of the Government of the Russian Federation, the operator will prepare a methodology for the entire labeling process from applying a digital code in the Data Matrix format to selling it at the checkout of the store.

We are traditionally ready to work closely with industry representatives. The pilot project is being carried out in order to take into account most of the wishes of the industry before the transition to mandatory labeling. This will make the transition to "new rules of the game" smooth and, most importantly, seamless, - he said.

The CRPT has already conducted a pilot on the labeling of cigarettes and cigarettes, together with the industry, the necessary processes have been worked out and mandatory labeling and tracing of these products has been launched. On March 1, 2019, registration of participants in the system began. From July 1, 2019, the release of products without digital codes in Russia will be prohibited and mandatory transfer of data on sales of labeled packs using online cash registers will begin. From July 1, 2020, the circulation of unmarked products will be prohibited.^[8]

2018

Trillion savings from digital labeling

The introduction in Russia of mandatory labeling of tobacco products will bring the state and business an additional more than 1 trillion rubles. during the year. Such estimates were shared in September 2018 with CNews by specialists from the Center for the Development of Advanced Technologies (CRPT), which acts as the operator of this project with the direct coordination of the Ministry of Industry and Trade CNews^[9]

Recall that special requirements for accounting for tobacco products, implying its mandatory labeling, come into force on March 1, 2019, but in pilot mode the project started in January 2018. Protected by cryptography, two-dimensional code in the Data Matrix format is applied to both packs and blocks. At the same time, marking of transport packages is also allowed. Registration of marked products is carried out in the Honest Sign IT system.

The CRPT does not deny that the project implies a certain financial burden on market participants, but they are confident that it will be compensated with a margin due to the optimization of business processes. "So manufacturers will be able to transfer production to work on the principle of Just in Time," argue the CRPT. - In logistics, the savings on operating costs associated with the cargo handling process will be at least 20%. The business will increase efficiency by 6-7% by reducing the costs of personnel, inventory management, logistics, exchange and return of goods. "

KORUS Consulting CIS - developer of electronic data transfer platform

As part of the first stage, KORUS Consulting CIS transferred electronic documents containing data on cigarette labeling to the system of the project operator - the Center for the Development of Advanced Technologies (CRPT). Documents containing expanded information on labeled tobacco products were transferred through the electronic document management services of a subsidiary of Sberbank. The parties to electronic document management were trading partners and the tobacco product labeling system. During the second stage of the experiment, CRPT and KORUS Consulting CIS will connect more than 10 national and regional retail chains to the labeling system, as well as small retail outlets representing traditional retail. KORUS Consulting CIS is the developer of the electronic data transfer platform.

Yan Vitrov, head of the CRPT tobacco labeling and traceability project, said: "The labeling project in the tobacco industry is part of a single national system of labeling and traceability of goods. On its basis, a platform will be created that will increase the transparency of markets and displace illegal products. Thanks to labeling and tracing, legal business gets a significant breakthrough in the digitalization of business processes and, as a result, cost reduction. "

The first OFD is involved in the experiment

On March 30, 2018, a successful transfer of a check with marked tobacco products by the fiscal data operator First OFD was carried out. The experimental fiscal document was punched at the METRO cash desk and transferred to the information system for labeling and monitoring the turnover of tobacco products of the Operator-CRPT.

At the beginning of the year, a pilot project on the labeling and tracing of tobacco products was launched in Russia, which will last until the end of 2018. The main goal of the new system is to combat counterfeit products. During the experiment, a digital code generated by special means (electronic point two-dimensional code in DataMatrix format) is applied to a pack of cigarettes. Further, according to primary documents, automated control of the movement of goods and its withdrawal from circulation is carried out on the basis of data obtained from cash registers.

At the experiment stage, monitoring of the withdrawal of tobacco products from circulation occurs with the use of fiscal data operators. When performing retail sales, the participant of the experiment (trading platform) scans and recognizes the identification means applied to the packaging of the tobacco products being sold. Information on the code and identification of goods is included in the fiscal document - cash check. The OFD transmits the information on the register number of the CCP, date of sale, price, product code and identification contained in the cash check to the CRPT Operator for each implemented logistics unit. After that, the Operator within four hours shall record in the register of means of identification information on the disposal of marked tobacco products from circulation, in accordance with the information received from the OFD.

"The first OFD began its participation in the experiment together with one of the key clients - METRO. An analysis of the necessary changes was carried out to implement the functions of removing tobacco products from circulation, a pool of tasks was formed and the implementation dates were determined. The result of the work was integration with the information system for labeling and monitoring the turnover of tobacco products of the Operator-CRPT, "says Andrian Bezdolny, Product Director of the First OFD

The information system will allow regulatory government agencies to gain access to information about the participants in the experiment, products, data on the generated codes and their movements. The coordination and monitoring of the system is carried out by the Ministry of Industry and Trade of the Russian Federation, which twice a year - until July 1 and December 31 - must evaluate the results of the experiment and provide this data to the government.

The experiment is attended by cigarette manufacturers, one of the largest distributors in the Russian Federation, federal and international retail chains. From July 1, 2018, importers of tobacco products will join the project.

BAT: Cigarette labelling system could deprive manufacturers of large distribution channel

The cigarette labeling system, testing of which started in Russia on January 15, 2018, may cause the closure of some small stores, which, in turn, will deprive manufacturers of a large distribution channel, fear BAT Russia, a subsidiary of British American Tobacco.

In the course of the experiment on electronic labeling of tobacco products, manufacturers apply a unique code to packs that allows you to track the movement of a pack from production to the moment of its actual sale to the final consumer. The first labeled cigarettes have already begun to arrive in stores in Moscow and St. Petersburg.

To participate in the experiment, retailers will need to organize a high-speed connection to the Internet to and implement electronic document management system with suppliers, which, according to BAT Russia estimates, will cost them 50-80 thousand a rubles year. Accordingly, the total costs of independent retail outlets, the number of which in Russia is 210 thousand, can amount to 10.5-16.8 billion rubles per year.

In addition, the labeling system involves scanning goods when receiving and selling, which, according to the head of BAT Russia Attila Kundrak, will repeatedly increase the labor costs of distributors to provide outlets with products. Large chains have a clear advantage here - the ability to save on costs at the expense of scale, small retailers who are not ready to bear additional costs will have to leave the market.

If it is unprofitable for retailers to sell tobacco legally, we will lose a large distribution channel and we can get a surge in illegal trade, "said Kundrak, adding that up to 60% of sales from BAT Russia are in off-grid retail.

The experiment will last until the end of 2018, while importers of tobacco products will only join testing from July 1. According to the results of the pilot, the timing of the introduction of the system in retail will be indicated.

To avoid unnecessary burden on small businesses, BAT Russia proposes to reduce the number of envisaged operations, in particular, to refuse to scan cigarettes when transferring from a wholesaler to a retail outlet, and to conduct the last code scan using online cash registers, which by July 1, 2018 should be installed in all retail. In addition, according to the company, in the early years it was right to concentrate on implementation in large and medium-sized businesses (wholesale link and networks) with the further inclusion of small retail.

The operator of the pilot project for cigarette labeling categorically disagrees with the forecasts of BAT Russia Operator-CRPT LLC (subsidiary of the Center for the Development of Advanced Technologies, CRPT). According to the representative of the operator, when moving to work with labeled products, stores will only need standard scanners and online cash registers, which, in accordance with the law 54-FZ "On the use of cash registers," have already been installed in most outlets and in 2018 will appear at all other entrepreneurs. Retail manufacturers to work with labeled products will only need to replace the fiscal drive already built into the online cash desk, the CRPT emphasized, assuring that the operator is interested in implementing the project with minimal costs for all its participants.

Meanwhile, according to BAT Russia estimates, the total costs of cigarette manufacturers in the first year of the labeling system may reach 11.5 billion rubles, including one-time costs for installing the necessary equipment (about 3 billion rubles), the introduction of electronic document management (expenses for distributors in the amount of about 1.8 billion rubles). In addition, manufacturers will be required to pay the cost of marking the system operator. It is assumed that the "Operator-CRPT" will receive about 50 kopecks. for the service of traceability of each unit of goods. As a result, the industry's costs of generating codes can amount to 6-7 billion rubles a year, according to BAT Russia.

Japan Tobacco (JTI) and Philip Morris International - the main competitors of BAT Russia - did not comment on its calculations and forecasts. In particular, as JTI Vice President for Corporate Relations and Communications in Russia Sergei Golovko told RBC, in order to finally assess the effectiveness of the pilot project, it is necessary to check the operation of the system on large batches of labeled products and make sure that its implementation will not become an excessive load for other market participants.

The opinion of the head of BAT Russia on a possible surge in illegal trade is shared by Alexander Alexandrov, senior manager for regulatory regulation and relations with the authorities of Imperial Tobacco. According to him, if the costs of maintaining the system are high, the labeling system will not contribute to the fight against illegal traffic, but to its growth due to the forced departure of small retail to the shadow market.^[10]

2017

Government decree on an experiment on the labeling of tobacco products from January 15 to December 31, 2018

On November 27, 2017, government decree No. 1433 "On Conducting an Experiment on the Labeling of Tobacco Products by Means of Identification and Monitoring of Tobacco Product Turnover" was issued. It, among other things, states the need to conduct an experiment on the labeling of tobacco products by means of identification and monitoring of the turnover of tobacco products from January 15 to December 31, 2018. The functions of the IE operator used for the purposes of the experiment were assigned free of charge to Operator-CRPT LLC. Subjects of circulation of tobacco products could participate in the experiment on a voluntary basis.

The idea of ​ ​ conducting an experiment on electronic labeling of tobacco products in the Russian Federation was positively perceived by cigarette manufacturers, some retail chains also expressed their readiness to participate in testing. It is not yet clear what the new brand will be on the pack, but tobacco companies are calling for a simple and inexpensive technical solution^[11] will^[12].

An experiment on labeling tobacco products with "means of identification" will be held Russia from January 15 to December 31, 2018, a government decree on its implementation was published on the website of the Cabinet of Ministers. The operator of the information system for the experiment will be OOO "Operator CRPT." The experiment will be voluntary.

It is assumed that the pilot project will allow, in particular, to check the effectiveness of the mechanisms for labeling tobacco products to ensure their authenticity, as well as to counter the import of counterfeit goods into Russia. In addition, according to the results of the experiment, the feasibility of switching to mandatory labeling of tobacco products will be determined.

The Ministry of Industry and Trade of the Russian Federation by December 15, 2017 must develop and approve methodological recommendations for the experiment and its schedule. In addition, requirements will be approved for the information system, for ensuring the protection of information contained in the system, and for ensuring security when using information and communication technologies as part of the experiment.

The question of what exactly tobacco products will be labeled is still open. There are several options. At the end of November 2017, Georgy Petrishin, adviser to Deputy Prime Minister of the Russian Federation Alexander Khloponin, said that the Russian authorities were discussing three labeling options. The first was proposed by participants in the tobacco market, the second - RFID tags used in the labeling of fur products.

The third option under discussion is, according to the adviser to the Deputy Prime Minister, the unified state automated information system (EGAIS), which now works for alcoholic beverages.

Vice President JTI for Corporate Relations and Communications in Russia Kiselev noted that the experiment is based on the principle of public-private partnership, so the choice of a means of identification will be coordinated taking into account the specifics of cigarette production - for example, the speed of lines and their technological equipment, dimension and types of consumer packaging.

CRPT is selected by the project operator for electronic marking of cigarettes

At the end of September 2017, the operator of a pilot project for cigarette labeling became known, which should start in 2018. It may be the Center for the Development of Advanced Technologies CRPT (), established in June 2017 with the participation of and, Rostec USM Holdings writes Kommersant with reference to a source close to the center.

According to him, the experiment should be held within the framework of public-private partnership, therefore, the CRPT was chosen. It owns 50% of the developer of billing systems of Peter-Service JSC (part of Alisher Usmanov's USM Holdings), 25% of Elvis + Group LLC (at the time of publication of the material was owned by Alexander Galitsky). The center itself specializes in the creation of cash registers and labels with crypto protection for marking goods.

The Center for the Development of Advanced Technologies may become the operator of the pilot project for cigarette labeling, which is to begin in 2018

As the publication was told in the Ministry of Industry and Trade, the operator of the pilot project on cigarette labeling will be created on the basis of Rostec. Rostec confirmed that, together with partners in the CRPT, "they have developed a labeling technology that can be applied to completely different types of goods, including tobacco." 

According to the newspaper, agreements have been reached on the participation in the project of factories of the companies JTI, Philip Morris International and BAT Russia, as well as the two largest distributors of cigarettes in Russia - the Megapolis group of companies and SNA.

In September 2017, First Deputy Prime Minister Igor Shuvalov announced the launch of a pilot project on electronic labeling of tobacco products since 2018. The Ministry of Finance then unveiled a government decree proposing a labelling experiment between January 15 and December 31, 2018. The coordinator of the experiment was chosen by the Ministry of Industry and Trade

The authorities are going to label cigarettes in order to control their circulation in order to combat counterfeit products. According to a Kantar study, in May 2017, the share of illegal cigarettes in Russia was 4.6% against 1.1% in the spring of 2016.^[13]

Industry Cost Estimate

The Association of Tobacco Manufacturers "Tabakprom" asked the authorities not to extend the Unified State Accounting System (EGAIS) to the production and retail sales of tobacco products and proposes to label packs of cigarettes instead. Manufacturers estimate the new system will cost the market tens of billions. rubles Russia Vladimir Putin They write about this with reference to the letter of the association addressed to the president. Vedomosti

According to Tabakprom estimates, the creation and implementation of EGAIS in the tobacco industry will cost 24 billion rubles, and the cost of buying special brands for cigarette packs will increase tenfold - from 2.6 billion to 25.5 billion rubles.

The connection of the tobacco industry to a single IT system was estimated at tens of billions of rubles

"Tabakprom" proposes not to introduce EGAIS, but to label cigarette products. Labeling is already used by manufacturers in many countries and has proven its effectiveness not only as a means of tracking and tracing tobacco products, but also as a means of confirming the payment of excise taxes and determining the authenticity of products, said Sergey Kiselev, vice president of JTI in Russia.

Yana Guskova, director of external corporate relations at BAT Russia, says that with sales of about 12.5 billion packs of cigarettes, the costs of brands compatible with EGAIS will amount to at least 20 billion rubles. At the same time, the creation of EGAIS for alcoholic beverages in 2005 cost the state 5-7 billion rubles. According to Guskova, it will take more than one year to develop a technical solution for EGAIS and implement it in Russian factories.

Sergei Kiselev points to completely different situations in the alcohol and tobacco markets. In the first case, during the introduction of EGAIS, the share of illegal products was 40%, and the collection rate of excise tax was about 60%, and in the tobacco industry these indicators are 2.2% and 99%, respectively.

Tabakprom advocates the harmonization of excise taxes in the EAEU countries, as well as tougher sanctions for trade without Russian excise stamps. Their alignment will eliminate the difference in prices with neighboring countries, Yana Guskova is sure.^[14]

2016: Russian Post to develop IT cigarette accounting system

On January 20, 2016, it became known about the participation of the Russian Post in an IT project to create a technology for tracking the movement of tobacco products. This innovation can cost the market at least 7 billion rubles and lead to an increase in cigarette prices.

The Kommersant newspaper received a letter from the Tabakprom Association and the Council for the Development of the Tobacco Industry, sent at the end of December 2015 to Deputy Prime Minister Arkady Dvorkovich. It reports on a meeting held on November 30 at the Ministry of Telecom and Mass Communications, which discussed the introduction of a system for recording the turnover of tobacco products based on the Russian Post technology for tracking mail.

It became known about the participation of the Russian Post in an IT project to create a technology for tracking the movement of tobacco products

The new system is scheduled to launch on January 1, 2017. The press secretary of Arkady Dvorkovich Aliya Samigullina told the publication that the letter is being worked out in the office of the Deputy Prime Minister.

Russian Post has confirmed that it has been involved in a project to develop an IT solution to track movement, including tobacco products. As the representative of the postal operator explained to Vedomosti, it is assumed that cigarette manufacturers will label products (RFID tags, QR codes, etc.), and all participants in the product delivery chain to the end consumer will be able to track the origin and path of the packs.^[15]

According to tobacco companies, the introduction of a system for accounting for the production and turnover of cigarettes can lead to interruptions in supplies and additional burden on business. It is noted that each mark on a cigarette pack will cost about 5 rubles.

If the mark is applied to a block in which ten packs with twenty cigarettes each, and separately to boxes (there are 50 blocks in them), then the industry's costs for the purchase of tags alone can amount to more than 7 billion rubles a year, the Kommersant source said.

Total Turnover Control System

• State Information System for Marking Goods
• Counterfeit Goods Monitoring System
• National Commodity Traceability System (NSP)
• CRPT: National Catalogue
• System of accounting (marking) of tobacco products
• Monitoring of Drug Product Movement
• Digital labeling of footwear products
• Mineral and potable bottled water labeling
• Labeling of dairy products
• RFID-labeling of alcohol in Russia
• Perfume labelling
• State system in the field of control over the turnover of precious metals, precious stones and products from them (GIIS DMDK)
• Marking of fur coats and fur products
• Animal labelling

• A system of total control of trade turnover is being created in Russia

Notes