The Ministry of Industry and Trade has asked the Bank of Russia and the Ministry of Finance to review a request from tobacco retailers. The request seeks to cancel the payment system that lets customers settle purchases with bank cards for goods and services, according to an Internet version of RBC.
More than 60 tobacco product manufacturers are among the companies that submitted applications. In their correspondence, suppliers argued that the industry faces an unusually high level of regulation. They pointed to rising excise taxes, a ban on advertising, limits on discounts, and the imposition of a ceiling on retail prices as core hurdles.
The manufacturers noted that even in the alcohol sector there is no fixed maximum price that would automatically erode margins, suggesting that current caps could be a unique burden on tobacco sellers.
In the petition to the Ministry of Industry and Trade, retailers asserted that the country is experiencing unprecedented constraints in the retail market.
The article highlighted that the profit margin for tobacco retailers has fallen to roughly 0.2 percent because of the combination of regulatory measures, including the fee charged to customers who pay with plastic cards.
During the early hours of May 13, Roslesinforga’s press service reported a 1.7 percent decrease in cigarette production in Russia for 2022, noting that this cut helped prevent the felling of about 320,000 trees. The statement linked lower production to evolving regulatory pressures and market conditions, offering a climate-change angle to the industry’s financial challenges.
Industry observers say the friction between policy aims and retailer profitability is widening. They point out that regulatory steps designed to curb consumption and steer consumer behavior can squeeze small and mid-sized sellers more than large chains, especially when every transaction carries additional costs.
Experts recommend a balanced approach that preserves revenue for the state while maintaining the viability of legitimate businesses. They suggest clearer guidelines, measured tax changes, and attention to the administrative burden placed on retailers.
Analysts also emphasize the need for transparent communication from government agencies about any upcoming regulatory adjustments. This clarity would help retailers plan investments in compliance systems, inventory controls, and customer service, reducing disruption to everyday shopping.
As the government weighs possible adjustments, industry groups are calling for a period of consultation with stakeholders, including manufacturers, retailers, and financial institutions. They argue that constructive dialogue can yield policy outcomes that protect public health while supporting a stable retail environment.
Overall, the dispute underscores the tension between public policy goals and the practical realities of selling tobacco products. It also highlights how shifts in regulation can ripple through supply chains, pricing strategies, and consumer behavior, ultimately affecting employment and regional economic activity.