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Alcohol Prices to Surge by 20 Percent
The prices for alcohol will surge 5 percent to 20 percent by this year-end, RIA Novosti reported with reference to analysts of the alcohol market of Russia.
The main reasons that will drive up alcohol prices are the increase in excise duties from January 1, 2008, higher prices for grain, inflation growth and requirement to install expensive equipment to dispose of distillery dregs.
The prices could be affected by the bill on new procedures for alcohol marking that has been submitted to the State Duma, said Russian Alcohol Group PR Manager Alexander Korovka. If this bill takes effect in line with expectations (January 1, 2009), the distilleries will have to acquire new equipment, and it will fuel the prices by roughly 2 rubles.
”Overall, alcohol prices will surge by 15 percent to 20 percent by the end of 2007,” Korovka forecasted, specifying that the grain and the alcohol made from it account for roughly 35 percent of vodka’s prime-cost. So, the increase in grain prices is bound to affect prices for all alcohol.
The effect of the season’s factor shouldn't be ignored either. Alcohol prices traditionally go up in fall and in winter, said Prokhor Malyutin, who is the PR manager at Synergy Group. Another reason, Malyutin went on, is the requirement for installing equipment to dispose of distillery dregs starting from January 1, 2008. The cost of such equipment averages $1.5 million.
”The price growth will continue till the year-end and will probably be at least 5 percent,” Malyutin predicted.
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