Russian alcohol market to be improved

Ilya Trunin, who has recently been appointed to the position of Minister of Finances, will be responsible not only for tax policy, but also for regulation of the alcohol market. Trunin’s sphere of responsibility turned out to be broader than his predecessor Sergey Shatalov’s. It was connected with the fact that last month the Federal Service for Alcohol Market Regulation and the Federal Customs Service, which used to report directly to the government, were shifted to the structure of the Ministry of Finances. There were a lot of reasons for such a reorganization, considering the need to improve the alcohol market.

Irina Hecht, a member of the Federation Council Committee on Agrarian and Food Policy and Environmental Management, says it is not the first year that this topic has been the subject of consideration: “Particularly in the framework of the Parliamentary Hour, it happened just three months ago, when [the head of the Federal Service for Alcohol Market Regulation of Russia Igor] Chuyan reported. [The Vice Premier Alexander] Khloponin was also present. Senators expressed several complaints and asked a lot of uncomfortable questions regarding the topic of how an operator suddenly appeared on the market and immediately got a 30% share. It was said that excise taxes and the cost of half a liter of vodka cannot be like that today, if it is made conscientiously. Today production is concentrated in a few regions, and underpayment of excise taxes is most likely associated with the gray schemes that come from there. In particular, a question about Karachay-Cherkessia was posed, where excise taxes were not paid, or were paid only partially, and they have already received marks on 14 billion. In other words, Parliamentary Hour was quite tense; moreover, a parliamentary inquiry has even been initiated, in particular on the affiliations of Mr. Chuyan with alcohol companies.”

According to Irina Hecht, “the roadmap, which is currently being developed, includes toughening of legislation on tax evasion and on the introduction of articles to the Criminal Code, envisaging a risk to human life and health from counterfeit alcohol. It is necessary to toughen the punishment, because today there are about 40 cases of poisoning and deaths per 100 thousand, and this number is increasing and not decreasing; moreover, at the end of last year a series of deaths provoked a toughening of the legislation.”

The Senator says that the alcohol market is quite a corrupt industry, “which brings a great profit margin in Russia, including in the retail trade, so in any case we hope that the EGAIS system, which is now being introduced by the Federal Service for Alcohol Market Regulation, will allow a solution to be found to the problem of registration of alcohol production which is produced and sold in Russia.”

Furthermore, elimination of caffeine in energy drinks is also being discussed today. Regulation of relations with the EAEU members is a problem at an international level. “It is the convergence of excise approaches on the one hand, and tougher control over alcohol production coming from our neighbors, on the other hand,” Hecht explained.