Kvas to be sheltered from new alcohol laws

New laws regulating Russian production and distribution of alcoholic beverages are expected to be approved this week, which will see traditional Russian low alcohol drink, Kvas, classified as an alcoholic beverage.

The news law will come in the wake of President Dmitry Medvedev’s March 2011 request to the government for an overhaul of alcohol production and distribution laws, with a view to limiting the sale of strong spirits between 11PM at night and 8AM in the morning.

Brewing companies, which had expected to be exempted from sales restriction on their core product, are now facing the possibility that beer sales will be restricted. In an official letter to President Medvedev, Alexey Kochetov, President of Brewing Company Ochakovo, said the regulation will not solve the problem of extreme alcohol consumption in Russia, but destroy the brewing industry.

“The state parliamentarians have recently proposed to obligate brewing companies for licensing of their products. This measure will have a negative effect on the industry. Moreover, the proposal included the implementation of Unified State Automated Information System (EGAIS) designed for automation of state control over production volume and circulation of ethyl alcohol which is to our mind irrational assuming that beer taxes are two times higher than strong spirits, notably vodka. This measure will not lead to increase of State budget from taxation of beer products and will threaten the brewing industry, causing skyrocketing expenditures and increased prices.”

The draft law provides for a complete ban on the sale of alcoholic beverages in non-fixed trading facilities (stalls and kiosks), which account for 25-30% of Russian beer sales, and is expected to have a severe impact on beer sales.

Presidential Aid, Arkady Dvorkovich, said kvas sales will not be banned

“There has been a misunderstanding and disinformation of the fact that the new law on alcohol will give Kvass a status of alcoholic beverage with further restrictions on distribution and sales. The Government will present a list of exceptions of non-alcoholic beverages with less than 0.5% of spirit concentration.”