Vodka minimum retail price not to be raised in Russia
04.12.2014,
12:10
The Russian alcohol market regulator, Rosalcoholregulirovaniye, is not going to increase the minimum price for vodka – neither this nor next year, said the head of the agency Igor Chuyan after the meeting of commission on alcohol market regulations.
YEREVAN, December 4. /ARKA/. The Russian alcohol market regulator, Rosalcoholregulirovaniye, is not going to increase the minimum price for vodka – neither this nor next year, said the head of the agency Igor Chuyan after the meeting of commission on alcohol market regulations.
The current minimum retail price of 220 rubles keep producers unhappy as it makes them feel unprotected compared to illegal manufacturers, RBC reports.
According to Chuyan, the excise tax frozen at 500 rubles per liter of pure spirit (100 rubles for a 0.5 bottle) eliminated all grounds for raising the minimum retail price that makes consumers turn to illegal vodka products.
The legal market lost 14% of its customers in the recent increase of the minimum retail price from 170 to 220 rubles, Chuyan told RBC.
Vice-premier Alexander Khloponin said at the meeting the budget is losing from 30 to 50 billion rubles because of the illegal alcohol market every year.
Yet, manufacturers say the minimum retail price of 220 rubles is too low and make them suffer losses.
A top manager of one of the biggest Russian vodka producers said vodka sold at a price less than 250 rubles per 0.5 liters in shops is illegal, i.e. no excise was paid for it.
“It is simply impossible to sell vodka at such a low price and gain profit”, he said.
The regulator’s argument is small regional producers can sell at this price and still manage to pay all the taxes. It is possible for instance if vodka is sold in a factory shop, with no wholesale markups and retail network charges.
According to director of TsIFRRA branch agency Vadim Drobiz, the minimum retail price should be raised at least to 240 rubles.
“The regulator should act having in mind interests of the majority of market players”, Drobiz said. –0—
