Russia's Finance Ministry proposes to impose a single excise rate for strong and soft alcohol and introduce minimal retail prices for alcoholic beverages, including cognac and brandy.
Photo: Sergey Shakhidzhanyan
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Finance Ministry Drafted Alcohol Control
Russia’s Finance Ministry submitted to Prime Minister Vladimir Putin Monday a list of actions aimed at “improving the government’s control over alcohol market.” The actual proposals are to impose a single excise rate for strong and soft alcohol and introduce minimal retail prices for alcoholic beverages, including cognac and brandy.
The draft of proposals aimed at “improving the government’s control over alcohol market” had been elaborated since 2007. The plans are to consider the documents October 28, during the meeting chaired by First Vice Premier Viktor Zubkov and dedicated to the national alcohol market.
The proposed actions fall into two categories. The first group is expected to improve the situation on the alcohol market, while the second one will bring down turnover of illegal alcohol.
The first category advocates introducing minimal prices for alcohol. The idea is to control both wholesale and retail prices for all alcoholic beverages, including cognac and brandy. For this purpose, the masterminds suggest banning the vodka sales at the prices below the fixed ones.
The highlight of the second group is introducing a single excise rate for all alcohol. Today’s rates equal 173.5 ruble per a liter of the absolute alcohol and 110 ruble per a liter of soft alcohol. This idea is by far not the new one. The government had imposed the single rate January 1, 2007, which surged prices for soft alcohol cocktails by 30 percent to 50 percent, and hit the market by 40-percent decline in the annual sales of all alcohol. As a result, the differentiated rate revived January 1, 2008.
“The document of Finance Ministry is a clear victory of vodka producers. Some proposals appear as if drawn from their initiatives, especially the single-rate introduction, which they have been lobbying long since,” said a representative of a vodka company on condition of anonymity.
www.kommersant.com
All the Article in Russian as of Oct. 08, 2008
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