Year 12 | 28 January 2020 | TO ENTER | TO REGISTER

Russia announces more vodka price rises

The Russian Government has announced plans to raise the minimum price of a bottle of vodka on 1 January 2014. According to a draft decree issued on the government's website, the new minimum price will be RUB199, up from the current RUB170. In August 2014 the price will rise further to RUB220.

It is the latest in a series of increases in the minimum price going back to 2010 as the government seeks to stamp out alcohol abuse. In 2010 the minimum price stood at just RUB98.

Tax increases mainly affect the lowest-priced segments. Such a jump in price is too much for some consumers and many have reduced the frequency of their purchases or sought black market alternatives.

Earlier this year the government announced that legal production in the first half of 2013 had fallen by -28.3% to 30.3m decilitres (800,441 gallons). The latest increases will encourage further growth of the black market. Speaking in the IWSR Magazine last month, Synergy CEO Alexander Mechetin said: "It is difficult to measure, but at least one-third of the market looks like it is grey market – partly vodka with a fake excise duty labels, and partly homemade vodka. As a brand owner, the main threat is illicitly produced vodka that has fake excise labels and can be sourced through legal channels, such as retail chains or traditional stores. These producers do not pay excise duty. This kind of product has a negative impact on the legal part of the business in Russia and is difficult to compete with."

The announcement could be good news for importers. One of the by-products of the rise in vodka prices is that it has served to close the price gap with imported products. This has contributed to the growth in imports, particularly whisk(e)y.

by S. C.
13 december 2013, World News > Europe