Russian Bootleggers Now Estimated to Earn Almost 10 Billion US Dollars a Year

Paul Goble

            Staunton, October 7 – Illegal producers of alcohol now control 28.5 percent of the Russian market and earn 9.4 billion US dollars a year, according to a new study by Euromonitor International which says that Russia is at the level of Latin American countries, better than in some African ones where bootleggers dominate the market but worse than in most others.

            Most of the production of illegal alcohol in Russia is concentrated around major cities because police say the most difficult problem Russian producers face is logistics, getting their product from point of production to point of sale. But despite that, they are active everywhere, including in the North Caucasus (capost.media/special/obzory/smertelno_opasnyy_biznes/).

            Two things make this illegal trade especially significant. On the one hand, illegally produced alcohol or surrogates are often poisonous and lead to illnesses and even death. And on the other, the size of this market casts doubt on reports about the reduction in the amount of alcohol consumption by Russians.

            The World Health Organization says that Russians consume 40 percent less alcohol now than they did in 2003; but at least some of this decline almost certainly reflects not a turning away from alcohol as such but rather a turning to cheaper illegal kinds and surrogates which typically are even more dangerous.

            That possibility is suggested by the expansion of bootlegging near major cities and the spread of such production throughout the country including in the North Caucasus where it appears to be a relatively new phenomenon. The authorities have responded with crackdowns, but at least in many places, the bootleggers appear to be one step ahead of them. 

            After all, the Russian authorities have sought to discourage drinking primarily by raising taxes on alcohol, something that makes registered production more expensive and less attractive but allows the bootleggers who can sell for less because they don’t pay taxes an opportunity to expand market share, especially at a time of economic hardship for many.