Bloomberg News

Putin Signs Anti-Smoking Law to Curb Cigarette Demand

February 25, 2013

Russian President Vladimir Putin today signed a package of anti-tobacco measures aimed at curbing demand in the world’s second-largest cigarette market, the Kremlin said in a statement.

Effective June 1, the law bans smoking in public ares including workplaces, stairwells of apartment buildings and near schools and hospitals. It also sets minimum prices for cigarettes and allows for higher excise taxes. The ban on public smoking will be extended to restaurants, hotels and train stations from June 1, 2014, and sales will be banned in street kiosks not big enough for clients to enter.

Putin, who returned to the Kremlin last year for a third term as president, is limiting sales and advertising of alcohol and tobacco in the biggest public health initiative since Soviet leader Mikhail Gorbachev’s failed campaign in the late 1980s. Smoking and drinking kill about 900,000 people a year in Russia, according to official estimates.

“There are some concerns that the tobacco lobby will be able to win concessions to make the process less transparent and more drawn out,” said Julia Tsepliaeva, head of research at BNP Paribas SA in Moscow. “On excise taxes, in particular, they’ll look to reach an agreement.”

Philip Morris International Inc. (PM:US), British American Tobacco Plc (BATS), Japan Tobacco Inc. (2914) and Imperial Tobacco Group Plc (IMT) control 93 percent of the $19.5 billion Russian market. China is the world’s biggest tobacco consumer.

Imperial, the maker of Davidoff cigarettes, added 0.2 percent to 2,383 pence at 9:35 a.m. in London. BAT, Europe’s largest cigarette producer, climbed 0.2 percent to 3,459 pence.

Russian Concessions

Tobacco companies have already won some compromises. The government had originally proposed outlawing all tobacco advertising and sponsorship as well as kiosk sales immediately, with bans on trade in small retail outlets and smoking in public places taking effect Jan. 1, 2015.

The compromise was reached after a “multi-million-dollar campaign” by the tobacco lobby, Dmitry Nosov, an Olympics judo bronze medalist who now serves as a deputy in the State Duma, said in an interview last month.

Almost 40 percent of Russians are regular smokers, according to the World Health Organization. About 400,000 Russians, or 0.3 percent of the population, die each year from smoking-related diseases, Prime Minister Dmitry Medvedev said in October.

WHO Convention

The legislation is intended to bring Russia into line with obligations to reduce the effects of second-hand smoke after the country ratified a World Health Organization convention in 2008, the Kremlin said today in a website statement. Lawmakers in Russia’s upper house of parliament passed the bill Feb. 20.

The success of the initiatives will depend in part on how actively Russian officials enforce the measures and whether they signal any lenience, according to Tsepliaeva. More Russians began wearing seat belts after the introduction of 500-ruble ($16.5) fines to reduce road fatalities, she said.

“Experience shows that Russians are no less law-abiding than everyone else,” Tsepliaeva said.

To contact the reporter on this story: Scott Rose in Moscow at rrose10@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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