Issues of pricing and taxation in the consumer markets of tobacco and nicotine-containing products in Belarus and Russia were discussed at a conference in Minsk
On September 20, 2022, the Association of European Business, with the support of BAT Belarus, held a conference “The consumer market of tobacco and nicotine-containing products in the Republic of Belarus and the Russian Federation. Pricing, taxation and some other aspects”.
The event was attended by Belarusian and Russian experts in the field of regulation of the tobacco industry, trade and taxation, representatives of state bodies of Belarus, the business community and scientific institutions.
During the conference, the main trends in the development of the consumer Belarusian and Russian markets of tobacco and nicotine-containing products, pricing, scenarios and forecasts, the impact of excises and other issues were considered.
Sergei Krasovsky, Deputy Director of BAT Belarus, noted: “One of the most significant factors influencing the development of the domestic consumer market of filter cigarettes is the change in retail prices. Among the reasons for the increase in prices for filter cigarettes is traditionally the increase in excise tax rates, which by definition is indirect, i.e. the tax that the consumer ultimately pays. The share of indirect taxes (excise + VAT) in the retail price of a pack of cigarettes in Belarus in 2022 reaches 70%.”
He also emphasized: “Since 2016, we have had a relatively moderate increase in the excise tax rate on filter cigarettes, which may change as early as next year due, first of all, to a number of international obligations assumed by the Republic of Belarus. The accelerated rate of growth in the excise tax rate will inevitably lead to an increase in retail prices, which, in turn, will affect the volumes of production and consumption.”
During the conference, the results of a large-scale sociological study of the consumer behavior of the smoking population of Belarus in relation to tobacco products, conducted by the National Academy of Sciences of the Republic of Belarus, were also presented.
“The results of a recently completed sociological study conducted by the National Academy of Sciences commissioned by BAT Belarus revealed a number of interesting features of consumer behavior of adult tobacco product consumers in the Republic of Belarus. Thus, the results of the study made it possible to profile the average Belarusian smoker in terms of his gender, age, income, the number of cigarettes he consumes per day, as well as his reaction to certain changes in the domestic consumer market of tobacco products. For example, it was found that one of the main features of the consumer behavior of a smoker in Belarus is his increased price sensitivity. The results of the study showed that only 43% of the smoking population will continue to maintain their level of consumption with an increase in retail prices for cigarettes by 1 ruble, and with an increase of 2 rubles - only 17%,” Sergey Krasovsky said.