The State Wants Control Over Vodka

Will officials gain state control over national property?

The idea of the Great Russian Empire has been pressing on the Russian government a lot recently. At least, this can be said for the Russian Agricultural Ministry. During Tsarist Russia, it used to sell wheat and rye to half the world. Russia also used to have a splendid monopoly: a state monopoly on the production and sales of alcohol. It was quiet paradise for the Russian state back in those years.

Well, it turns out that the Russian state still cherishes the dream of returning to that happy time. To accomplish this, the state wants to set up strict state control over the market of alcohol production. According to the experts’ estimates, the Russian budget loses from 20 or 25 billion rubles due to the illegal circulation of alcohol products. Russian Minister for Agriculture Aleksey Gordeyev and the new head of the company Soyuzplodimport, Vladimir Loginov, believe that it is high time that they do something to correct the situation.

The newspaper Vremya Novostey reported that the Governmental Committee for the Regulation of Alcohol Production set forth several suggestions to set up a new federal department for control over the manufacture and sale of alcohol products. The committee sent those suggestions to the Committee for Administrative Reform. The chairman of the Committee for Administrative Reform is Dmitry Kozak, who is known in Russia for his concept for oil and gas field reform.

The committee believes that the situation with state control over alcohol is rather vague at present. For the time being, the regulation of the alcohol market falls under the Ministry for Agriculture, the Ministry for the Economic Development and Trade, and the Revenue Ministry. It often happens that the authority between those state bodies overlaps and is confused. The Ministry for Economic Development and Trade, for example, develops quotas for the import of alcohol. Those quotas are issued by the Agricultural Ministry. The Revenue Ministry issues import licences, whereas the Economic Ministry hands them out.

Russia has already has the experience to setting up such a body. There used to be a state committee in Russia for the state monopoly over the market of alcohol production. The committee existed in the country from 1995 to 2000. The department failed to take the branch out of the shadow. However, Russia’s state interests were sacrificed to the personal interests of Boris Yeltsin’s gang during his stay in power. The last chairman of the committee, Viktor Berestovsky, acknowledged that the state was capable of controlling only half of the alcohol market in the country. Thus, it happens that the situation on the market improved after the break up of the committee. The Russian State Statistics Committee informed that 40% of the alcohol circulation is on the black market. Yet, the National Alcohol Association believes that it is not 40%, but 30%.

However, chairman of the National Alcohol Association, Pavel Shapkin, said to the Vremya Novostey newspaper that the centralization of authority in one department would bring a lot of good. On the other hand, there is not a strong need to set up a separate bureaucratic department for that. Pavel Shapkin believes that it would be enough to concentrate the authorities in one of Russia’s ministries. Yet, it seems that Mr. Shapkin realizes that no ministry would ever agree to bid goodbye to any of its privileges.

It is worth mentioning that the government exercises enviable consistency when it comes to the state monopoly over the alcohol market. Yet, there is strong opposition to the state’s will as well. The mentioned newspaper wrote that the federal state unitary enterprise Rosspirtprom (spirit industry, established at the end of 2000) currently is experiencing many problems. The Clearing House finished auditing the enterprise on Friday. As a result, it turned out that the company failed to achieve all the goals for which it was organized. The company did not manage either to raise the efficiency of control over the alcohol industry or to increase the revenues of the federal budget.

So far, politicians can offer the alcohol industry a state support concept. The draft of the concept is now being discussed by officials and deputies.

Akhtyam Akhtyrov

Translated by Dmitry Sudakov

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Author`s name Olga Savka