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Beer Production in Russia declining due to increased Beer Tax

russian-flagAccording to the data provided by the Russian Federal State Statistics Agency, based on the results of Quarter 1 2009, beer production in Russia declined by 6% year-on-year. “Beer production decline is related to the negative impact made by introduction in 2008 of the accelerating beer tax excise”, Vyacheslav Mamontov, Chairman of the Executive Committee of the Union of Russian Brewers is quoted as saying. “Such a negative impact has considerably strengthened at the background of reduction of purchasing capacity of the population in this country. The tendency of decline of beer production may lead to growth of consumption of cheap surrogate alcohol, and it will boost growth of alcoholization and increase of the death rate. Reduction of the taxable base of budgets of all levels will become an economic consequence of the negative dynamics of beer production. Today the industry fully complies with its tax obligations. Thus, based on the results of 2008 brewers paid excise in the consolidated budget in the volume of RUR 29 billion”.

Russia’s beer market reached its maximum volume in 2007 and 2009 will see the market shrink further following the trend that emerged in 2008, says a new study. The fast growth of beer sales in 2006 and 2007 was due to irregular supplies of strong alcoholic beverages caused by the introduction of Russia’s Unified State Automated System of Alcohol Record (EGAIS). According to the study, Russia’s beer market reached its record high in 2007 with a volume of 120 mln hl. In 2008 the volume decreased to 114 mln hl, as supplies of vodka to the sales outlets became stable. Experts believe that in 2009, Russia’s beer market will continue to shrink to just 100.5 mln hl., because a part of the consumers might switch from beer to strong liquors as the higher alcohol content of the latter allows to economise. 

In the long term, Russia’s beer market is forecast to resume growth but the highest demand will be for low-alcohol and low-carbon beer.

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Saturday, December 16, 10:17 pm

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