Russia in crisis as vodka runs out

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Tuesday 5 June 2001 Russia in crisis as vodka runs out By Marcus Warren in Moscow

RUSSIA was in crisis yesterday as vodka stocks fell fast after producers of the national drink suspended operations for fear of violating excise rules.

Manufacturers and the media painted a grim picture of acute shortages and even riots to come if confusion over the new tax measures was not cleared up and production did not resume soon. Moscow's best known distillery, Kristal, maker of the Stolichnaya brand, was at a standstill because of the mix-up, as were hundreds of other factories and wineries across the country.

Regulations introducing a regional excise duty on top of a national tax came into force on Friday. But no one has seen the new stamps which bureaucrats insisted must be stuck to bottles. Rather than break the law, distilleries have shut up shop.

German Klimovsky, a vodka marketing director, told the Moscow Times: "All distilleries are standing still now, waiting. We already saw longer queues for vodka on Friday and if the mess continues we will get a riot." The Kommersant daily said: "There are no signs that the situation will change for the better in the next few days. As a result, Russia is standing at the threshold of a severe vodka shortage."

The stoppage at Kristall alone is reducing stocks of the spirit by at least half a million bottles a day, the average daily consumption of the factory's output. Most distilleries have a week's production in reserve so shortages may not start in earnest before the weekend.

But the price of a bottle is already creeping up, although at 1.30 for around a pint of vodka, it is cheap by international standards. Despite forecasts of chaos, Mikhail Kasyanov, the Prime Minister, signed a resolution last month banning sales of alcohol without the excise stamps.

In most parts of the country, the stamps, like the regional excise warehouses that issue them, do not yet exist. Creating them may take months, although the industry and tax authorities were aware of the problem last year.

Alcohol consumption in Russia is among the highest in the world, at 24 pints per head per year, for every man, woman and child. Most Russians expect to see vodka on the table at family gatherings and celebrations.

http://www.telegraph.co.uk/et?ac=003864436460684&rtmo=gGrNYrGu&atmo=rrrrrrrq&pg=/et/01/6/5/wvod05.html

-- Martin Thompson (mthom1927@aol.com), June 05, 2001


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