Russia: State Duma approved the beer tax raise

State Duma deputies backed a bill Wednesday to raise the beer tax by half as President Vladimir Putin seeks to curb alcohol abuse, blaming it for a shrinking population, The Moscow Times published April 26.

The Duma approved the draft bill in a second of three required readings Wednesday, the Duma said on its web site. The tax will rise in increments to 3.09 rubles (12 cents) per liter in 2010 from 2.07 rubles now, the Russian Brewers Union said.

Putin has repeatedly urged Russians to curb drinking, saying alcohol abuse is a key reason the male life expectancy is one of Europe's lowest and the population of 143 million is falling by 700,000 per year.

The country's $3.4 billion beer market has been one of the world's fastest growing this decade, reaching $3.4 billion in sales last year, behind only the United States and China.

The Russian Brewers Union opposes the bill, saying higher taxes will not reduce alcohol consumption and may even be a health danger.

Beer companies will raise prices to offset the tax rise, forcing low-income drinkers to switch to cheaper, stronger and lower-quality beverages, such as bootleg vodka. Tainted homemade spirits kill thousands of Russians every year.

"Pricing is the key factor for most of our country's citizens when choosing a type of alcohol, so we should expect a new wave of deaths from bootleg alcohol poisoning," said Vyacheslav Mamontov, chairman of the union's executive committee, in an e-mailed statement Tuesday.

The union represents some of the country's largest producers, including Baltika Breweries, which is jointly owned by Carlsberg and Scottish & Newcastle.

Russian beer output, led by Baltika, jumped by one-tenth last year to 10 billion liters as a wave of bootleg vodka deaths and delays in issuing new excise stamps for spirits turned drinkers away from the national beverage.

Vodka production climbed 9.6 percent in March from the same month one year earlier to 106 million liters, according to the State Statistics Service.

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