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Russia Proposes Tripling Tipplers – Beer Tax

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In a move which will triple beer duties there, the cash-strapped Russian Government hopes to fill its coffers to the tune of 65 billion roubles or  €1.5 billion through a tax hike on beer.

But according to one global brewer, the move could also result in 100,000 workers losing their jobs and prompt the brewery to relocate its breweries out of Russia.

“By our estimates, if the current proposal to increase excise duties is approved — and we sincerely hope that will not happen — around 100,000 people could end up out of work,” warned Joergen Rasmussen, Chief Executive of Carlsberg, the fourth largest brewer in the world, recently, “If the proposal is passed, we may be forced to close factories”.

Carlsberg, which earns nearly 50 per cent of its profits from Russia, holds around 40 per cent of the market there.

Despite Russians being among the world’s largest consumers of alcohol, the proposed new measures are not going to solve the problem, stated Joergen Rasmussen who claimed, “The rise in (beer) prices will not change the habits of those who abuse alcohol… They will move to cheap vodka and the problem will be exacerbated”.

Drastic limits on the sale of beer have also been proposed by the Russian authorities which could affect over a quarter of beer sales there, according to industry experts.

The proposed new legislation would ban beer sales via kiosks and markets and set strict opening hours for the sale of alcohol. It also proposes introducing minimum wholesale and retail prices for alcohol.

The moves are being considered following President Dmitry Medvedev’s ordering of tough new measures to curb alcohol abuse.

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Wednesday, November 22, 7:33 am

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