State moves to impose spirit monopoly

More than 40,000 died in Russia due to alcohol poisoning last year

"Experts think that illicitly-distilled spirits account for 40 per cent of the total amount of intoxicating liquors," said the late-night Nochnoye Vremya news, adding that moves have begun in parliament to introduce state monopoly on alcohol production to cut down on the number of casualties caused by the consumption of hooch.

"More than 40,000 people died due to alcohol poisoning in Russia last year. This is more than the number of lives claimed in traffic accidents and murders, although these, too, are often caused by alcohol: one in five car accidents and two-thirds of murders take place in a state of alcoholic intoxication," the programme said.

Alcohol abuse is also to blame for the ever-increasing number of children and adolescents running away from home and living rough without any supervision, Channel One said, without giving any figures. The young people were likely to become alcoholics themselves.

The programme said that officially some 2.5m alcoholics were registered in Russia, but that the unofficial figure was double that. Nothing much was being done at the state level to put this problem to rights. A health ministry expert acknowledged that real statistics were unavailable. The main problem, he said, was the poor quality of what people drink and excess drinking.

The heaviest drinkers were to be found in the north of the country and in the Urals area, among middle-aged people. According to international statistics, Russia was 14th in the league of countries with heaviest alcohol consumption, with 8.6 litres of pure alcohol per capita per head, the statistical data having been compiled without reference to illicit alcohol available on the market. Given its overall market share of almost a half, Russia would head the list, with just over 17 litres of pure alcohol per capita per year, Nochnoyye Vremya said.

Big rise in Russian alcohol abuse

The Health Ministry in Russia has announced alarming figures about the extent of alcohol abuse and its impact on the population.

The Deputy Health Minister, Gennady Onishchenko, quoted by the Interfax news agency, said 47,000 people died last year from alcohol poisoning after drinking poor quality products, a big increase on the preceding year.

Alcohol was also responsible for some 40% of all serious diseases.

Home-distilled vodka and other spirits are blamed for the high incidence of alcohol poisoning, and Russia's severe drink problem is said to be behind high rates of heart disease, road and workplace accidents, and drownings.

Russia’s Ministry of Health has proposed new regulations that would severely restrict the production and sale of malt beverage alcohol products to Russian consumers. The new regulations are a reaction to the government’s perception that the Russian population has a new drinking problem – beer.

At a January 10, 2001, press conference, Deputy Health Minister Gennady Onishchenko announced the new measures, which also take aim against advertising that promotes beer as a healthy alternative to the traditional Russian favorite – vodka. Presently, under Russian law, beer is not defined as an alcohol beverage. Nevertheless, over concerns that consumption of beer is becoming addictive for many Russians, the Health Ministry has proposed banning beer commercials on television, outlawing brands of beer that have an alcohol content of six percent or higher, and re-categorizing stronger beers so that they are regulated as alcoholic drinks under Russia’s beverage laws.

Not surprisingly, Russia’s brewers and suppliers immediately expressed concerns over the Health Ministry’s proposals, warning that the new regulations would derail an otherwise prospering new industry in the country’s struggling private enterprise environment. In recent years, local beer markets have boomed, resulting in one of the few expanding economic industries in Russia, the beer industry growing by approximately 21 percent in just the past year. On the consumer side, beer consumption has increased from 10 to 30 percent per year through much of the last decade.

During his January 10th press conference, Deputy Minister Onishchenko argued that aggressive television commercials often target young consumers. “Now even children and teenagers drink this seemingly non-alcoholic drink,” he said. Onishchenko also noted that beer’s new popularity is spreading across consumer categories: “Beer, seemingly harmless and even useful according to the commercials, is becoming women’s favorite drink.”

Interestingly, Russian consumption of beer is relatively modest.p Currently averaging about 30 liters of beer consumed per capita per year, Russia is still well behind the United States and many European countries in its consumption of malt beverage alcohol products. Onishchenko acknowledged that Russia is following a western trend in developing a taste for beverages containing lower levels of alcohol. However, unlike the West, Onishchenko complained that Russia’s love for vodka is not declining as its thirst for beer increases. “A sea of beer has been added to the 14 liters of alcohol consumed in Russia per capita annually,” Onishchenko reported to Russia’s news media.

Think YOU Have Regulatory Problems?

Despite such concerns, however, changes in Russia’s alcohol laws are not likely to occur any time soon. The regulations proposed by the Health Ministry have not been approved by the rest of the Russian government. For example, the proposed restrictions on the television advertising of beer in Russia must be approved by the Anti-Monopoly Ministry, which oversees television advertising. Sergei Puzyrevsky of the Anti-Monopoly Ministry recently told Russian news media representatives that his ministry’s hands are tied about amending advertising laws over beer because ambiguities exist over whether malt beverage products can fall within the jurisdiction of Russia’s alcohol laws.

That confusion was compounded by President Vladimir Putin’s recent veto of legislation, a veto that effectively rendered the production and sale of alcohol illegal in Russia. In August, President Putin signed into law four chapters of the second part of the Russian Tax Code, which included strict new alcohol regulations slated to become operational January 1, 2001. Among other stipulations, the new code called for the excise duties on alcohol beverages to be split evenly between producers and wholesalers, whereas previously the producers carried the full burden of paying excise taxes. Instead of a single stamp from just the producers, the regulations now require that alcohol beverage products bear a second regional stamp from wholesalers, reflecting full payment of excise taxes. Consequently, under the Russian system, excise taxes were to be split evenly between federal and regional budgets.

However, by November of last year, regulators and industry members alike realized that government bureaucrats had done little to turn the new alcohol legislation into reality. Lacking suitable administrative regulations, Russia’s legislature, the State Duma, voted to give the government more time, adopting a new implementation date of June 1, 2001. However, the Duma apparently acted without consulting President Putin.

In the eleventh hour of the legislative calendar, Putin informed Duma deputies in a letter that he had vetoed their extension, and they would have to face the consequences of not implementing the original legislation in a timely fashion. "The failure by the government to take necessary measures for the creation and realization of regional special excise stamps . . . and the mechanism of excise payments by excise warehouses . . . is no foundation for delaying [the implementation] of the second part of the Tax Code,” Putin wrote.

Putin’s veto shocked alcohol producers and dealers alike. With no system in place to implement the new excise laws, Russia’s alcohol industry technically cannot lawfully produce or sell its products after January 1, 2001. Thus far, some producers have ceased operations. Many others have decided to continue business as usual, and hope that the news laws will not be enforced.

Regulatory Chaos And Industry Confusion

Between chaos over the excise tax law, and the Health Ministry’s stern warnings concerning beer consumption, Russians apparently are in a quandary over their alcohol. According to Russia’s National Alcohol Association, the country’s alcohol industry produced 950 million liters of alcohol in the first 10 months of 2000, with preliminary forecasts for the entire year’s production set at 1.2 billion liters. For 2001, however, estimates are not available because of industry confusion.

For example, all 10 distilleries in the Kemerovo region have stopped selling product, over concerns about the new excise tax laws. Most wholesalers in the Tomsk region have done the same, as have some industry members in Moscow. Uri Molokin, deputy sales chief at the Moscow-based Topaz distillery, reported to members of the press that one of his company’s regional wholesale dealers already had suspended purchases. In contrast, Alexi Yegarmin of Moscow’s Serebryanoprudski Distillery, recently told members of the media that his company was not going to alter its production: “We are working as before,” he said.

The next time you hear a complaint about alcohol regulation in the United States, it might be wise to keep in mind that everything is relative.

All labels included in this gallery are from private collections. Sometimes only black & white copies, but it is expected they will be replaced by color. Some labels are known only from advertising.

Arranged by cities and some cities by breweries