Financial crunch makes Russians drink cheap vodka

The biggest alcohol producers face cuts in production. According to Rosstat estimated total, alcohol production reduced in January of this year in two times.

5,6 mln decalitre was produced in January 2009, what is on 20,9% less than in January 2008 and on 52,8% less than in December. The reason for this is not Russians? dislike towards vodka, but the notorious crisis.

Payments irregularity between merchant wholesalers and dealer networks caused delays of production at the warehouses. Merchant wholesalers weren?t able to pay producers and buy new batches of goods so producers had to reduce product release because it?s necessary to pay the excise tax within 45 days.

It is a traditional trend for this time and a crisis consequence, said to Interfax chairman deputy of the Alcohol Producers Union Dmitrij Dobrov.

Alcohol consumption reduced and influenced product release. Desire of distilleries to produce in December as much as possible in order to prepare reserve and pay lower excise tax also did its bit. From the beginning of this year alcohol producers have to pay more to the country?s budget", - mentions the expert.

Also the excise tax has been raised this year. It figured up 173,5 rubles for 1 litre of pure ethanol , this year - 191 rubles. The tax for 1 bottle has grown on 4-5 rubles.

People don?t drink less but prefer vodka of medium and low price bracket instead of prime, said Elena Agaikina, company grouping Region analyst, to RIN.ru. People?s preferences will be changing. Producers take it into consideration and yield more alcohol of medium price bracket. Regional companies will enlarge their production volume as this segment is main for them".

?Separatism? of some regions influences on alcohol production decrease. Particularly, it?s difficult to get a license for vodka brought from other regions. Merchant wholesalers complain on undue checks and delays with documents checking. From their viewpoint local Tatspirtprom securing the backing of the authorities take these measures in order to minimize losses during the crunch.

Artyem Krasnov

sections: Economics