Will sales of alcohol in Russia soon be a state monopoly?

by Eleonora Scholes and Igor Serdyuk

Statements by various Russian officials on the sales of alcoholic beverages and the alleged mass poisoning through counterfeit products culminated earlier this week

in a proposal to introduce a state monopoly on the sales of alcohol. Boris Gryzlov, speaker of the Russian parliament, put forward the proposal at a session on 31st October. According to Gryzlov, this is the only way to combat counterfeit alcohol. The speaker mentioned that preparatory work had started in the Duma, but parliament executives have yet to confirm this fact. Several deputies tried earlier this summer to push the idea of a state monopoly on retail sales as an amendment to the law on state regulation of production and distribution of alcoholic beverage, but it wasn't passed.

There are now two possible scenarios on how the situation with a monopoly might develop: a state owned company could be formed that would act as an intermediary between producers and distributors of alcoholic products. The other, more radical option would follow the model of Scandinavian countries, where a veritable state monopoly on retail sales of alcohol is established. Russian market players aren't happy with either solution. They see product shortages in the shops, stagnation in the market, increased power for retail chains and further corruption as obvious dangers. Some believe that the initiative comes as new pressure on the market from state officials after president Putin voiced discontent with their handling of EGAIS alcohol monitoring system two weeks ago.

 

 

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