Publication: Monitor Volume: 2 Issue: 30

The Russian government has in recent weeks adopted a number of measures aimed at regulating the production, import, and marketing of alcohol and tobacco products in Russia. Traders have been warned that they will lose their licenses if they charge lower than state-set prices and import quotas on foreign-produced alcohol will be brought into force June 1. The government’s aim is to increase its revenues by increasing the share of domestically produced alcohol and tobacco sold inside Russia. At present, imported alcohol accounts for 50 percent of the liquor sold on the domestic market; the government wants to reduce this amount to 20 percent. Since the provisional trade agreement Russia recently signed with the European Union prohibits the imposition of quotas on imports from EU countries, the most likely effect of import curbs will be that alcoholic beverages produced in western Europe will maintain their share of the market while that of eastern European (mainly Ukrainian) products will fall. Smuggling across the porous Ukrainian-Russian border is also likely to increase. (6)

1995 Credit Paid; IMF Mulls New Loan to Russia.