So why Swedish snus in Russia?
When Gallaher began exploring snus exports to Russia in 2005, we were told via inquiries to Liggett-Ducat's contacts in Russian customs that snus, as it is a stem-based product, is unclassifiable as anything but tobacco waste. This was similar to regulations in Eastern Europe prior to 2003. While stem use is common as an additive into a cigarette blend, it was not yet classifiable as a consumer product. Ironically, Swedish Match was already actively exporting to NESKA in Moscow, and gaining small bits of distribution of General, Ettan and Catch varieties.
The warnings on those products stated that "Smoking is dangerous to your health," which, in my opinion, was a cheeky way to get around nebulous/non-existent labeling laws. I picked up a tin of General one year ago, and those warnings still applied.
That tin cost $4.00 at a BP station, so any price advantage, such as the one that propelled snus during the excise hike/break in 1997 in Sweden, is lost. Also, SWMA, simply has no branded presence/retail infrastructure in Russia, so the cans sit off in a corner, or in a small forgotten fridge,and because the product is unknown, does not sell.
Philip Morris, which, if I recall is the SWMA Joint Venture in Russia, is probably going to use the strong brand recognition of Parliament and their massive distribution power through Megapolis (huge distributor), and put in a product whose price is elastic enough to move at $4.00 due to its image and existing equity.
They have millions invested in branded retail in Russia, so the product will be visible and available. You can still advertise in shops there. They'll throw away expired product and happily replace it until it begins moving. And they're banking on the upcoming price-hikes and restrictions to help. It is possible snus is not eligible for the new taxes because it's still unclassified. I don't know.
The warning "This Tobacco Product is Harmful to Your Health" has to be checked for legality. Considering it's a PMI product, I am sure they've done so.
An Insider's Perspective
Reporting from New York and Russia for SnusCENTRAL.org
Related Article: Parliament Swedish Snus is Here....sort of