Window on Eurasia: Putin Putting Russia at Risk by Cutting Vodka Prices, Anti-Drinking Group Says

Paul Goble

 

            Staunton, January 2 – Vladimir Putin may have improved his own political health by announcing plans to cut the minimum price for vodka – Russian leaders in the past who have boosted prices or otherwise restricted access to alcohol have usually paid a high price – but what he has done, an anti-drinking group says, comes at the price of the health of the Russian people.

 

            In a December 29 letter to the Kremlin leader published in “Izvestiya” today, the Russian Coalition for Alcohol Control asks him to reverse his decision lest there be a dramatic rise in alcohol consumption and “a colossal growth” in mortality rates” among Russians as has happened in the past when prices have been cut (izvestia.ru/news/581505).

 

            According to the authors of the appeal, the reduction in minimum prices for vodka and permission for television advertising of that product will lead “to the growth of mortality connected with alcohol us, illnesses and social problems,” and will prevent Russia from achieving the life expectancy goals Putin promised for 2018 in his May 2012 order.

 

            Moscow is reducing the price by cutting taxes on each bottle of low-end vodka sold. According to Darya Khalturina, a leader of the Russian Coalition for Alcohol Control, Moscow acted on the basis of “disinformation” from the leaders of Tatarstand and Bashkortostan where there are two major producers of such vodka.

 

            They faced, the leaders of these Middle Volga republics said, stiff competition from cheaper vodka being brought in from Kazakhstan and sought a reduction in the price of vodka produced in Russia not only to fight that but also to ensure that they would be able to collect taxes and thus come closer to balancing their budgets.

 

            Vadim Drobiz, the director of the Center for Research on the Federal and Regional Alcohol Markets, said that it was certainly the case that regional producers and thus regional governments would benefit more from the reduction in prices for low-end vodka because the big national companies can’t make a profit on that category because of high distribution costs.

 

            At the same time, he added in the words of “Izvestiya” that “for legal producers of vodka,” cutting prices by cutting taxes on the low-end brands would mean that consumers would find it practically impossible to “distinguish it from contraband,” a term that includes everything from vodka produced off the books by regular producers to potentially dangerous samogon, the Russian term for moonshine.