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Thursday, 12.05.2011
Fight against alcohol: Russia is threatened by a new Vodka deficit
Moscow. The Russian government wants to force retailers to introduce an electronic control system for the sale of alcohol. This measure had once before lead to empty vodka shelves in shops.
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Currently the tax on alcohol is around 231 Rubles (Euro 5.80) per liter of pure alcohol, by 2015 the tax office will collect 500 Rubles (Euro 12.50) per liter. This will have an effect on the price of vodka. A half liter bottle of currently €4 will cost then at least twice as much.
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Automated control should be extended
In this connection, the Russian Government suggests to expand the use of the automated detection system EGAIS into the retail trade. Up to now the import and production of alcohol are controlled by this system.
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The reason for extending the use of this system is that the price increases will lead to higher illegal production of alcohol in Russia. Only through complete electronic control it can be ensured that no illegal alcohol will enter the trade.
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Record discovery of illegal alcohol in Siberia
In time to this announcement, the Russian police in Siberia discovered a record amount of illegally produced alcohol. 261,000 bottles of vodka, around 127 tons, were found in a storage room in Irkutsk. The tax discs on the bottles were, according to the Interior Ministry's Department of Economic Crimes, false. They claim, that the vodka was brewed in the Northern Caucasus.
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Black market brewers often use Methanol to create their spirits. The consequences are serious health problems for the consumers. Statistically, the tens of thousands of deaths from illegally brewed alcohol are irrelevant, compared to the number of deaths caused by abuse of legally brewed alcohol. According to the deputy head in the Health Committee of the Duma, Nikolai Gerasimenko, a total of 550,000 - 700,000 people in Russia die from the effects of alcohol abuse.
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State wants to profit from alcohol sales
Of course, the state profits from the sale of legally sold alcohol, while profit from illegally produced alcohol will only go to their producers. The increase in control serves not only ensuring the quality of the alcohol but also the state finaces.
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However, the consequences could be similar to that of five years ago. Then, the introduction of the system lead to massive breakdowns, as neither the tax stamps nor the software for the control system were ready, which caused the stand still of the vodka distilleries in early 2006. Six months later, when the system was applied to importation, the import of wine and brandy came to a halt.
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Complete control over vodka turnover will be expensive
It took almost one year before the system worked properly. During this time it was noticeable that wine and vodka shelves were empty. Sales in black market distilleries grew considerably.
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Up to now, EGAIS is working insufficiently. Only legal production and imports are being recorded. What is being sold later on in the shops can only be checked randomly, sales are not yet recorded automatically.
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In order to change this, all shops have to be equipped with the system. This is not an easy task. Every distillery had to invest between Euro 14,000 and Euro 50,000 to buy the required systems. To operate it a further Euro 750 to Euro 2300 a month are needed.
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A factory is able to make an investment of this scale, but should the same amount be necessary for retailers, many businesses are likely to stop the sale for vodka.
Original German text can be found here >>>
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