Russian authorities plan to ban tobacco sales in stores under 50 m2

2010-07-23

Gosduma, the lower house of the Russian parliament, is preparing a project of an act prohibiting selling tobacco products in stores with trading area under 50 m². This means that many outlets like kiosks and convenience stores, which presently have a 75% share in tobacco products’ turnover in Russia, will be not allowed to sell those goods. The changes in the law are expected to be introduced in autumn 2010.

The Russian authorities’ plans brought a reaction from the major Russian retailers. X5 Retail Group, the largest Russian retailer, is already reorganising its outlets, removing cigarettes from the cash desks and creating separate tobacco sections directly in the outlets’ trading area. Currently, the retailers operating in large-area formats hold a 8% share in the Russian tobacco products market.

The mentioned Prohibition Act is expected by the authorities to reduce the number of smokers in Russia, as well as prevent the retailers from illegally selling cigarettes to youngsters. However, there are also rumours about the large retailers’ potential lobbying.

The Russian tobacco products retail market is estimated to be worth RUB 15bn ($492.4m).