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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

Wednesday, July 30


SPIBA continues their series of Look@It tours, which focus on the success stories of major brands in the St. Petersburg market. Today’s event will focus on the Gorky Golf Club and will also be held there. For more details visit spiba.ru



Thursday, July 31


Develop your leadership abilities during a lecture by famous Russian author and coach Radislav Gandapas. The event starts at 9 a.m. at 5 Lodeinopolskaya Ulitsa. The price for entry is 20,500 rubles ($570).


Relax and enjoy a Parisian atmosphere with some romantic and laidback jazz tunes during the Night of French Music at Lenny Jam Cafe, 63 Ligovsky Prospekt. The entrance fee is 250 rubles ($7).


The Women’s Business Club is hosting a Beauty Brunch where participants are invited to discuss the latest news in the beauty industry and listen to lectures by professional stylists in the business.



Friday, Aug. 1


Bikers from all around the world will gather to take part in a parade, extreme shows and rock concerts during the International Biker Festival that revs its engines today and runs through Aug. 3 near Olgino Hotel, 4/2 Primorskogo Shosse.


The Peter and Paul Fortress will be turned into an open-air cinema today and tomorrow as part of the 5th International Short and Animation Film Festival. A huge screen across the fortress walls will air short films non-stop with board games, photo sessions and other activities also on offer for visitors. For more information, visit www.opencinemafest.ru



Saturday, Aug. 2


Gatchina Palace Park Museum will host its second annual Night of Light, an impressive audio-visual show across the night sky. Tickets are 600 rubles ($16).


If graphic design is more your thing then check out Illustration Day, where you will be able to visit an exhibition, attend lectures by professionals and even show experts some of your own work. The event starts at noon at Zona Deystvia, 73 Ligovsky Prospekt. The entrance fee is 350 rubles ($10).



Sunday, Aug. 3


History lovers shouldn’t miss the chance to see reenactments of World War I battles in Pushkin at noon. Besides exciting war scenes, visitors can enjoy live music, historical costumes, an equestrian show and a fancy-dress parade starting from the Moscow gates.


Garage Sale, the popular and growing flea market where nothing is priced over 500 rubles ($14.11), starts today at noon in Loft-Project Etagi, 74 Ligovsky Prospekt. Be sure to get in early to score a bargain. Entry costs 50 rubles ($1.40)



Monday, Aug. 4


Continue the working week with a calm and steady mind with a free yoga lesson at 7 p.m. in the Bukvoed store at 23A Vladimirsky Prospekt.



Tuesday, Aug. 5


Visit The Romanov Dynasty doll exhibition today, where more than fifty porcelain dolls depicting Russian rulers, and made by Olina Ventzel, will be on show. The exhibition continues through Aug. 31 in Sheremetyev Palace, 34 Fontanka Naberezhnaya.



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