Director of Corporate Relations and Communications of the tobacco company JTI Russia Sergei Glushkov said that in 2024 the cost of cigarettes in Russia will increase due to the rise in the cost of their production and labor, as well as an increase in excise tax rates.
Both raw materials and production components have become more expensive, Glushkov said. He stated that it is extremely expensive to import spare parts for cars due to increasingly complicated logistics, and it is almost impossible to localize their production. The cost of labor has also increased, and before a technical school graduate can start working, they need to complete their studies for 16-18 months.
“Competition for workers and engineering personnel has increased — all this together affects the final price,” Glushkov said.< /p>
48 percent of the cost of “premium” cigarettes and up to 80 percent of the cost of cheaper ones comes from the excise tax, which could be raised again, and this “will immediately be reflected in the price on the shelf,” the top manager said.< /p>
Glushkov did not voice specific forecasts regarding the new cost of cigarettes.
In October 2023, the State Duma adopted in the first reading a government bill providing, among other things, for an increase in excise tax rates on tobacco products and their indexation in the next two years. Excise taxes on tobacco products and tobacco products intended for consumption by heating are expected to increase by 3 percent from January 1, 2024, and then be indexed in 2025-2026. The excise tax rate on liquids for electronic nicotine delivery systems is doubled.