Shops, companies fighting alcohol and tobacco bans

by Anna Sulimina at 31/05/2012

The Moscow news

Anew series of initiatives by the former Health and Social Development Ministry would, if implemented, impose the harshest restrictions on alcohol and tobacco sales Russia has ever seen.

The proposals, which were made just before the end of the previous Cabinet’s term and the restructuring of the former ministry, have met with criticism from tobacco industry representatives and small store owners as being excessive and against the principles of free trade.

Critics also see a contradiction between the laws and government moves to support entrepreneurship and small businesses.

Kiosk coalition

On May 26, the new Coalition of Kiosk Owners staged a protest on Pushkin Square against the proposed law banning stores smaller than 50 square meters from selling alcohol and cigarettes.

The organization claims that larger retailers have been lobbying for the law in hopes of edging out their smaller competition.

“The new law puts small business in an unequal position compared to the big retail chains, and this won’t stop smokers from smoking,” said Sergei Markov, the head of the Association of Underground Renters in Moscow. “People will buy more cigarettes from big supermarkets, knowing that they won’t be able to buy them in a nearby shop.”

“The Health Ministry just wants to show something has been done, but this prohibition won’t stop smokers or consumers of alcohol,” he said.

The small retailers and kiosks make more than 50 percent of their turnover from selling cigarettes and alcohol, and the new law, if passed, will force many retailers to shut.

Moscow Mayor Sergei Sobyanin has been attacked by shop owners before, to the point that campaigners at the protest held signs calling for the return of his predecessor, Yury Luzhkov. Since the fall of 2010, when Sobyanin came to office, thousands of Moscow kiosks have been demolished, including those that were completely legal and that had all the necessary documents.

Consumer choice

Consumer rights advocates, meanwhile, argue that smokers, who make up to 40 percent of the country’s population, should be free to buy cigarettes where they want.

“There is a dire lack of small neighborhood shops in Moscow, while big retailers obtain more and more privileges,” said Mikhail Anshakov, the head of the Consumer Rights Protection Society. “Not only small business, but also consumers will lose out.”

The laws also go against the agenda of supporting and protecting entrepreneurs recently announced by the government, which has appointed a federal ombudsman for the preservation of businessmen’s rights.

Neither the Moscow Department for the Protection of Businessmen nor Opora Rossii, an organization aimed at uniting and supporting small and medium-sized businesses, agreed to comment on the issue.

Support from tobacco firms

Tobacco companies agree with the store owners. Under the law, cigarette producers will be barred from sponsoring public events, and stores will be barred from displaying cigarettes. The products will be hidden and requested from a price list, and smoking will be prohibited in most public places.

Tobacco producers say many of these measures are excessive and will not lead to the desired results.

“While we support comprehensive and effective tobacco regulation, the bill contains a number of extreme measures that will not reduce smoking and are likely to lead to adverse consequences,” said Irina Zhukova, director of communications at Philip Morris International. “The proposed bans are flawed policies that will not achieve their stated health objectives. Instead, they will unnecessarily restrict competition, damage small retailers, and cause an increase in illicit tobacco trade.”

One of the reasons behind the proposed restrictions is that small traders are allegedly selling cigarettes and alcohol to teenagers. Both kiosk owners and tobacco producers claim this problem could be solved by increasing fines.

“The fines for selling cigarettes to the underage are ridiculously low and should be increased,” said Alexander Lyuty, director of corporate relations at British American Tobacco Russia.

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