Alcoholic drinks do not belong to everyday goods, but their prices have always been under the close scrutiny of Russian consumers. Today in Russia the lowest price of a bottle of vodka is just below 100 rubles, but in the very near future the situation may change significantly. From July 2012 minimum retail prices for this strong drink are likely to rise.
The Federal Service for the Regulation of the Alcohol Market of the Russian Federation has established the size of retail prices for spirits. New minimum prices will be introduced from July 1, 2012. The lower price limit for a 0.5 liter bottle of vodka will grow by about a third and will amount to 125 rubles. The expected increase in prices is associated with another increase in excise taxes on alcohol, planned for the middle of the year. For vodka, the excise tax will increase by 20%.
The Russian market was expecting an increase in the minimum retail price for strong alcohol even before the onset of 2012. Experts noted that the price norms in force at that time did not correspond to economic realities. Taking into account taxes, rising prices for alcohol and other production costs, the price of vodka should have been at least 130 rubles even then. Low prices are maintained, first of all, due to the dominance of illegal producers in the alcoholic beverages market. And the consumer suffers from this.
Before the New Year, the government, having increased the excise tax on vodka by 10%, nevertheless decided not to raise the minimum retail prices. It is quite possible that one of the reasons for this decision was the upcoming presidential elections in Russia. Indeed, the rise in the price of this popular product among the broad masses of the people could have given another reason for dissatisfaction with some electoral strata of society, according to the business daily RBK daily.
Most legal alcohol producers are satisfied with the upcoming price changes, considering them timely and fair. Experts believe that with new minimum retail prices, even small producers in the regions with well-established distribution channels will be able to remain within the margin of profitability. An increase in excise taxes and, accordingly, retail prices should objectively deal a tangible blow to the shadow alcohol market.
