Moscow considers monopoly on alcohol

The government is considering the possibility of creating a state monopoly on both alcohol production and its retail trade, the cabinet said in response to a Duma bill on state monopoly in the sector, the gazeta.ru web site reported on Thursday. Experts have dismissed the government’s document and have dismissed it as a populist and utopian measure that would swell prices on essentials and give rise to illicit alcohol trade. “The [Duma] bill needs to be amended to introduce a state monopoly on both spirit production and its retail sales,” the government said in its assessment of the Duma draft law. The government responded to the bill, which was drafted and submitted by the Just Russia party to the lower house last fall, by saying that it also wants to consider a state monopoly on retail trade and hopes the new measure would curb illegal trade after a planned sharp rise in excise duties on alcohol. “By 2014, excises for alcohol products will be doubled, which makes state monopoly on retail an effective instrument for holding in a possible rise in illegal sales,” the government said in its document. The Ciffra alcohol market research center said in Russia alcohol made up 35 to 37 percent of trade for small-scale corner shops, 19 percent in supermarkets and 12 percent in superstores, the likes of Walmart. In all, alcohol sales make up 9 percent of total Russian retail trade, or 1.7 trillion rubles ($58 billion) last year, the center said. Ilya Belonovsky from the Retail Chains Association was rather skeptical about the prospects of the bill. “Neither consumers nor retailers are ready for such a law,” he said. “If adopted, it will encourage illegal trade and drive up prices for legal alcohol products.” Vadim Drobiz, the Ciffra director, said the new state monopoly would reduce the number of licensed alcohol retailers and agreed that it would spur trade in cheaper fake alcohol. He cited the statistics that the closure of one legal retailer led to the opening of three illegal ones.