Today, the demand for tobacco products in North Asia is growing steadily. North Asia refers to the Asian part of Russia, including regions such as Siberia. Despite the impact of the COVID-19 pandemic and illicit products, the demand for tobacco products in North Asia is still growing steadily.

Growing consumption of tobacco products

Historically, the consumption of tobacco products in North Asia has been relatively high. The latest data from the Russian Federal Statistical Service shows that the smoking rate in the Chukota region is currently at 48%, making it one of the regions with the highest smoking rate in the entire North Asia.

Most analysts and tobacco manufacturers believe that although the population is only 53 million, the tobacco market in North Asia has great potential for development. Compared with other parts of Russia and the Asian countries adjacent to Russia, the local per capita income is high, medium to high. The market for price-point tobacco products is expected to further develop.

According to government reports in Yekaterinburg and Novosibirsk, two of the largest cities in the Urals and Siberia, local consumers have a growing demand for large packs of cigarettes.

North Asia is not only of interest to legal tobacco manufacturers, but also of counterfeit products.

Vladimir Kolokorsev, a spokesman for the Russian Interior Ministry, said that counterfeit tobacco products have always been one of the serious problems facing the tobacco industry in North Asia, and the problem has become more urgent in recent years. Counterfeit products pose health risks to local consumers and cause serious losses to legitimate tobacco manufacturers.

According to recent statistics from the State Tobacco Regulatory Agency of the Russian National Research Center, the market share of illicit products in the entire Russian tobacco market is estimated at 12%, while in North Asia this figure is about 30%.

Recently, the Eastern branch of Philip Morris International, which operates in Russia, told the media that in some regions of Siberia, the market share of illegal tobacco products is as high as 30%.

The Russian city of Rubtsovsk, on the border between Russia and Kazakhstan, is currently one of the main transshipment centers for counterfeit tobacco products in North and Central Asia. The city's market share of illicit tobacco products is as high as 60 percent, according to data released by the Russian Interior Ministry and Nielsen. According to some unofficial statistics, this figure is even higher.

The number of e-cigarette stores has almost doubled

In recent years, the demand for various new tobacco products in North Asia has also grown significantly. Statistics show that the number of e-cigarette shops in North Asia has almost doubled over the past few years, and this growing trend continues.

This is mainly due to the growth in sales of disposable e-cigarettes in the local market. Most of this product is illegally imported into this area. According to analysts from the Russian Association against Counterfeit Products, the annual demand for disposable e-cigarettes in the North Asian market is estimated at 93.1 million units.

The local government has expressed serious concern about the continued growth in demand for tobacco products and rising smoking rates in North Asia. In order to control the further rise of smoking rate, the local government department recently stipulated the minimum price of tobacco products, and the price of each pack of cigarettes is not less than 108 rubles (1 ruble is about 0.07 yuan). In addition, they have launched an anti-smoking program with the aim of reducing smoking among Russian adults by 21% by 2035. The plan also requires health warnings to be printed on 75 percent of cigarette packs.

The local government department also plans to reduce dependence on international tobacco manufacturers by providing support to tobacco manufacturers in the region. At present, the development of tobacco manufacturers in North Asia is at a low point. The Alves factory in Yekaterinburg, the largest tobacco-manufacturing plant in the Ural Federal District, has now ceased production. According to industry analysts, the main reason for the shutdown of the Alves plant is the lack of funds to purchase new equipment to produce higher-quality products, resulting in the inability to meet market demand.

Peter Chek Marev, director of the Development Committee of the Agro-Industrial Complex of the Northeast Chamber of Commerce and Industry of Russia, proposed that North Asia should be regarded as a place for the development of Russia's own tobacco industry. They are implementing a series of reforms here.

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