12 Jan 2013

Alcohol price increases in Russia

 
 
From the 1st of January retail price of semi-liter bottle of vodka became 170 rubles due to the order of the Russian Alcohol Regulation Department. How will it influence premium alcohol drinks? 125 rubles price of a bottle of national Russian drink stayed in the Past. The reason is in increase of the rate of excise from 300 till 400 rubles per liter of ethyl spirit. According to the idea of Vladimir Putin, consumption of spirits in Russia should diminish in two time until 2020. Nowadays it is between 16 to 19 liters of pure spirit per person. Last year the statistics of death provoked by alcohol reached 75 thousand people. This struggle against alcoholism will be followed by grow of prices to expensive drinks, remarks Svetlana Fomicheva, manager of wine boutiques “Elitnie vina”: “Excises become more expensive, so the final product becomes more expensive too. Market will decide the size of the increase and in every concrete place the price will be dictated by the profit of the enterprise. I can only speak about my company: we will try to keep prices at the lowest level we could, as this is both in the interest of us ant the customers. But what we can't stop is price growinig”. Increase of retail price of cognac will make 28%, brandy – 32%. And the main question is Why? The answer s evident – from 2012 the fiscal reformation in the sector of the strong spirits started. The rate of excise has been growing to 8-10% per year during the latest decade. And that corresponds with the inflation. New politics preview 30% grow. General director of the Research Center of Federal and regional markets of alcohol Vadim Drobiz is sure that Russian alcohol market changes exclude low-income population from the consumption processes: “Prices will grow to 5-6 times by 2015. Such expensive drinks like cognac, rum, gin, whiskey, tequila will not suffer a lot, but the cheapest cognac in Russia will cost 280–290 rubles". Actual price of whiskey in Russian bars is about 120 rubles per 50 grams, it will be at least 200. The fight with alcoholism starts from a wrong end, it will bring nothing but price grow to Russians, says an alcohol market expert, Director of Strong Drinks Academy Erkin Tuzmukhamedov. By the way, his opinion is that premium drinks will grow insignificantly. This price increase will absolutely provoke augmentation of volume of illegal alcohol. As RIA News report currently there are about 1,3 million off-excise bottles and in 2013 the quantity will grow. Another trouble for customers is a new beer regulation. Starting from the New Year this drink is equal to spirits and can be sold only till 8 p.m. Source - Business FM.