Russia starts year with war on cheap vodka

Medvedev sanctions law putting minimum price on spirits to fight binge drinking

Roland Oliphant
Saturday 02 January 2010 01:00
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As Russians woke to nurse their New Year's Day hangovers yesterday, they may have found that the dog that bit them had doubled in price overnight. A government clampdown took effect yesterday banning the sale of vodka at less than 89 roubles – about £1.80 – for half a litre.

The law is the first move in a high-level war on binge drinking launched by President Dmitry Medvedev. Calling alcohol abuse a "national tragedy", Mr Medvedev vowed to slash Russians' prodigious drinking. Russian adults drink on average 18 litres of pure alcohol a year, twice the World Health Organisation's recommended safe minimum. The new price almost doubles the cost of the cheapest vodka from as little as 51 roubles per half litre, although it will affect only the very bottom of the market. Further measures are planned for the first half of 2010, including a single, higher, rate of excise duty for spirits, and the banning of the ubiquitous street-side kiosks where the cheapest alcohol is to be bought.

Russians' love of vodka has confounded Russian leaders for centuries. Prince Vladimir, one of the founders of the first Russian state, is even said to have rejected Islam as a state religion because Russians could not do without alcohol. In 1985, Mikhail Gorbachev raised alcohol prices and restricted selling hours. Although alcohol sales dropped and life expectancy spiked, the flirtation with prohibition was both expensive – it cost the government billions of roubles in lost revenue – and unpopular. Some say it cost the last Soviet leader his popular support.

Mr Medvedev's conservative critics already delight in drawing comparisons between his comparatively liberal brand of politics and the unpopular Mr Gorbachev's perestroika-era reforms, and the last thing the current leader needs is to antagonise the public in the same way.

But he seems to have learned from the Soviet leader's mistakes. First of all, 89 roubles is still very cheap, and the new minimum price will be prohibitive for only a very small proportion of Russians. Furthermore, because it is aimed at pricing illegal producers out of the retail market, it should increase rather than diminish revenues. Most importantly, two-thirds of the public back the President, according to opinion polls.

But alcohol runs much deeper in Russian culture than any legislation can reach. And while Prince Vladimir may have baulked at depriving his people of the "joy of Rus", as he called alcohol, later leaders actually encouraged consumption. Vodka made up such a great proportion of the state's revenues – up to half in the 18th century, and about a third for most of the 19th – that Tsar Alexander I noted: "No other major source of revenue enters the treasury so regularly, punctually and easily as revenue from the liquor farm."

It is fitting that the Russian state should take a hand in correcting the national tragedy, since the state had such a role in bringing it about. "The logical next step would be a state monopoly on alcohol," said Alexei Mukhin, the head of the Centre for Political Information, a Moscow think-tank. The government says it will only "discuss the possibility."

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