An increase in tax is being blamed for the drop in alcohol production in Russia.
According to Rosstat production of spirits has dropped by some
30% in the last year, and some manufacturers have cut production by
as much as 80%.
The most recent statistics show a significant drop in alcohol
production in January. Vodka production has been reduced by almost
77 percent, cognac production dropped by 60 percent, wine saw a 40
percent decline as compared to December 2012, Rossiiskaya Gazeta
reports.
The reason for the annual January decline in alcohol production is
the traditional increase in excise tax and hence the minimum retail
price for spirits. Significant drop in alcohol production has also
been seen compared to January 2012.
“Up until 2012 the excise tax for alcohol had been increased by 10
percent every year. Now it is being increased by 30 percent,”
Vadim Drobiz, head of the Center of research of Federal and
regional alcohol markets told Rossiiskaya Gazeta daily. He added
that the tax has been very high compared to the west. But now it’s
become “excessively” high.
“Retail sales will definitely drop. I think by 10 percent in 2013,
same as production,” he added.
Another reason is the Russian New Year holidays halting production
of many goods for over a week. Experienced retailers get prepared
beforehand and stock up on alcohol in December.
Drobiz is pessimistic about the new statistics, fearing that
increased prices for spirits may push consumers to the illegal
alcohol market.