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26 Mar, 2010 15:36

Brewers voice concern on government alcohol measures

The Russian government is looking to combat alcohol problems - with beer coming under attack. The brewing industry is responding with calls to look at vodka.

The consumption of alcohol in Russia is a problem that the government is hoping to tackle. Earlier this month, public health officials called for a nationwide ban on retail sales of alcohol after 9pm. Vladimir Medinsky, State Duma Deputy, says it is an unpopular decision

“Who is against restrictions on night sales? Let's not be naive. It's supermaket chains. Higher vodka prices – the people are against that. There is only one thing I can reproach authorities with – and that's the lack of political will in taking a highly unpopular decision.”

Several new laws have come into effect in recent years that have restricted spirit sales in Russia. As the government works on legislation to combat problems with alcohol in the country, some owners of vending points are concerned their small business interests are being compromised in the process.

And they are not alone. Excise duties on beer, which has traditionally been treated as a food, not alcohol, have been tripled since last year. Banning street sales is also under consideration.

Brewers fear they are being targeted by new rules – but taxes on vodka remain low, and Grant Harries, Managing Director, at SABMiller Russia, is asking that the voice of the brewing industry is listened to.

“We've taken these measures very seriously. We agree with the issues the government has with alcoholism in principle. Our request is simply that we can be a party to helping draft that legislation.”

The minimum retail price for a half-liter of vodka in Russia is currently 89 roubles (about $3). That price is approved by the state. Sergey Guriev, Rector, New Economic School says the main focus of new legislation is on health and social aspects, not financial ones.

“In economic terms, this isn't a very important issue. Elasticity to prices is reasonable high and raising excises would increase budget revenues. But not by much.“

But with an estimated 40% of the country's male population having a problem with alcohol consumption, the overall the impact on the economy – taking into account days taken off work, time spent recovering health, and dealing with shorter life expectancy – is something quite hard to ignore.