29 April, 2003

The Russian Brewers Union has sent an open letter to Russian Prime Minister Mikhail Kasyanov asking him to take measures "to normalise" the state tax policy toward the beer industry. The union has proposed that the issue to be considered at a government meeting. The country's beer production fell 5%, compared to the same period last year, to 140.1 million dekalitres. Meanwhile taxes have been 25% higher from January 1st.

The Union says a shortfall in the state budget of US$36.5m in the first quarter was the result of a decline in beer production, in turn a symptom of increased taxes.

The Union also asked the state to consider health implications of their policy, as the high beer prices forced consumers to turn to low quality spirits.

However, brewers face an uphill struggle as the Tax Ministry is currently considering raising taxes on beer producers further, rather than cutting them.

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