The golden age of the Russian beer industry was over (The Wall Street Journal, USA)

The attack on the Kremlin's alcoholism was a serious blow to the producers of beer The world-famous beer manufacturers once made huge bets on the famous Russians love to alcoholic beverages, investing millions of dollars in the construction of new plants and the establishment of sales in the hope of growing popularity of beer in the country, where for a long time, the rules of vodka.

For many years, these investments make good profit. But now, according to the manufacturers, the Kremlin's campaign to combat alcoholism, dealt a serious blow to their business, as new laws and excises, to improve the situation with the depressingly low levels of life expectancy of Russian men, led to the subsidence of the beer market.

"Sure, doing business in Russia was very difficult — says Jorgen Buhl Rasmussen (Jorgen Buhl Rasmussen), president of the Carlsberg Group, for the past 20 years has invested $ 12 billion to the region, which, according to its forecasts, had to bring her 40% of its the total income. — This is partly due to the global crisis, in part — poor harvests, but the main reason is the sharp increase in excise taxes and the adoption of new laws. "

Representatives of major Western brewers such as Carlsberg, SABMiller and Anheuser-Busch InBev, argue that the rate of adoption of new laws and taxes dealt a crushing blow to producers who had high hopes for growth in beer sales in Russia against the background of the recession in Europe and the U.S. . Since 2010, the volume of beer sales in Russia fell by 20%, while its per capita consumption — by 13% due to the increase in prices.

Representatives of the local branch of the company Anheuser-Busch InBev argue that the first half of 2013 beer sales were down 13% compared to the same period in 2012. Also in the past year they had to close two plants in Russia for the production of beer, due to the increase in excise duties and the introduction of a new regulatory regime, which has become, in their words, "one of the toughest in the world." Recently, the Russian subsidiary of Heineken sold one of its breweries and has already put one more on the sale. Alliance representatives and SABMiller Andalou Efes Turkish company said that in 2013 it would not achieve its goals "due to the negative impact of changes in the Russian legislation," and Carlsberg Group, whose factories for the production of "Baltika" control 38% of the Russian market, considers that, in 2013, she did not manage to realize growth forecasts of production due to tightening of the regulatory regime in Russia.

Such a drop in the market has caused a severe blow to producers who can remember the golden age of brewing industry in the mid-2000's, when the beer in Russia was not considered an alcoholic beverage. From 2005 to 2007, beer sales in the country grew by 30%, and very often on the streets you could see people drinking beer from the bottle at 10 am.

"Until 2008, the beer market is weakly regulated. You do not need to have a license to sell beer, taxes were low and there were no restrictions on marketing. Beer is often worth less than the soda — says Ian Shackleton (Ian Shackleton), an analyst with Nomura. — The beer market has been growing at a rapid pace, and beer manufacturers made huge profits. But, apparently, it was all too good to be true. "

In 2009, the Russian government has declared war on alcoholism, which President Dmitry Medvedev has called "a national disaster." According to the World Health Organization, the cause of one in five deaths among Russian men was the alcohol, and the average life expectancy for men was only 64.

In 2010, then-Prime Minister Vladimir Putin has signed a 10-year plan that seeks to reduce the level of alcohol consumption in the country by 50% by 2020. Mr. Medvedev signed a law equating beer to alcohol, which led to a tightening of control over its sales. Up to that point, any beverage with an alcohol content of less than 10% fell into the category of food.

Under the new law, the sale of beer at night was forbidden. January 1, enacted a law to ban the advertising of beer and a complete ban on its sale in kiosks.

However, according to representatives of the brewing companies, the main impact was the gradual increase in excise taxes. In 2009, the government received only 3 rubles to one liter of beer. In 2013, it receives more than 15 rubles a liter of beer, and this figure will increase to 18 rubles in 2014 and to 20 rubles in 2015. According to Yulia Drozdovoj from Euromonitor International, have all contributed to the fact that the retail price of beer rose by 10% and its sales have declined.

Excise taxes on vodka also risen sharply: in 2013, they increased by 33% in 2014, their growth is likely to be 25% and in 2015 — another 20%. Also in 2013, the minimum cost of a bottle of vodka has also increased from 125 to 170 rubles. This has led to a decrease in production of vodka by 28% in the first half of the year. Also, according to the Russian Federal State Statistics Service, for the first time in a long time in the first half of 2013 the share of vodka accounted for less than half the volume of alcohol consumed, while the share of beer had only 32% of alcohol consumed.

Beer producers have warned that such measures to combat alcoholism can lead to undesirable results, citing the fact that in the Soviet Union under Mikhail Gorbachev, such measures have led, on the one hand, to reduce the level of alcohol consumption, on the other — to increased production of moonshine and the flourishing of organized crime. In August, Mr. Putin has voiced these concerns and proposed to reduce the growth rate of tax.

"We know what the old days, what led the struggle with alcohol — just started to brew cook meth drink — said Mr. Putin. — The fight against alcoholism — it's hard work. It requires a lot of effort, funding, time, perseverance, ingenuity, but it will have a positive and lasting impact. "

However, the attitude of some people's habits do not change with time.

"Beer — it is a drink for children, — said Dmitry Kozlov, a Russian soldier on leave, sitting in the afternoon in one of Moscow's bars for a glass of vodka. — Real men drink vodka. "

 

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