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Price Hike Sees Illegal Vodka on the Rise

Published: April 17, 2014 (Issue # 1806)



  • Illegal vodka accounted for 55 percent of the entire vodka market in 2013, Igor Kosarev, vice president of distiller Russky Standart, told Kommersant.
    Photo: Maxim Stulov / Vedomosti

Legal vodka production plummeted nearly 17 percent in the first quarter this year under the weight of a state-enforced price increase and a flourishing illegal market, Kommersant reported Tuesday, citing Rosstat data.

Illegal vodka accounted for 55 percent of the entire vodka market in 2013, Igor Kosarev, vice president of distiller Russky Standart, told Kommersant.

"Given the trend that we see now, by the end of the year this share will increase to 64 percent," Kosarev said.

Just as illegally produced vodka is increasing, there is an "avalanche of stores now selling alcohol without a license," said Alexander Mechetin, CEO of alcohol producer Synergy.

Sixteen percent of stores selling alcohol in large Russian cities do not have the necessary license, according to recent research by Infoline market analysts.

The legal market has lost even more business since the state increased the minimum retail price of vodka from 170 rubles ($4.72) to 199 rubles for a half-liter bottle on March 11.

Sales of legal vodka in the lower price segment "have noticeably decreased" since that time, said Vadim Drobiz, director of the Research Center for Federal and Regional Alcohol Markets.

The situation could be further exacerbated on Aug. 1, when the minimum price will go up to 220 rubles for a half-liter bottle.

Producers of other alcoholic drinks also cut back production in the first quarter: production of Russian brandy fell nearly 21 percent to 1.3 million decaliters, while table wine fell 14.5 percent to 6.3 million decaliters and sparkling wines fell 15 percent to less than 2 million decaliters.

Isaac Sheps, chairman of the Union of Russian Brewers, predicted late last year that the beer market could shrink 25 to 30 percent in 2014, Vedomosti reported.

The market has been struck in recent years by bans on advertising alcohol in the streets, Internet and mass media, and another last year which prohibited selling alcohol after 11 p.m. and banned beer sales from street kiosks.





 


ALL ABOUT TOWN

Saturday, Aug. 23


Uppsala Park plays host to Fairy Noon today, a performance of five separate fairy tales ranging from folk classics to more haunting selections. There will be three different renditions of the tales throughout the day and tickets start at 500 rubles ($13.80) for adults and 300 rubles ($8.30) for children.


Classic Finnish cartoon characters the Moomins expect to receive a warm welcome from Russian fans during today’s Moomin Festival at the Pearl Plaza Shopping Center at 51 Petergofskoye Shosse. Become a kid again or introduce a new generation to the beloved creation of Finnish writer Tove Jansson.



Sunday, Aug. 24


The tortured genius of Dutch master Vincent van Gogh gets his day in the center’s Konnushnaya Ploschad during Make Art Like Van Gogh, a daylong celebration of the artist that will allow amateur artists to try and replicate the work that made the famed painter world-renowned.


Experience a variety of dances highlighting the diversity of the world around as at the final day of the Ethno-Dance International Dance Festival that has been at the St. Petersburg Humanitarian University of Trade Unions this past week. Tonight’s performance will feature Egyptian dancers accompanied by local orchestras.



Monday, Aug. 25


Today kicks off the Elena Obraztsovoy International Competition for Young Vocalists in the large hall of the Shostakovich Philharmonic. Talented youngsters will showcase their range over the next six days before a winner is chosen on Aug. 30.



Tuesday, Aug. 26


Love movies but hate all those words? Then check out Rodina Cinema Center’s Factor of Consensus film forum this evening. Silent movie classics from the beginning of the 20th century will be screened and accompanied by a pianist, who will provide the soundtrack for the ongoing action. The screenings begin at 7 p.m. Check Rodina’s website for more details.



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