Half a liter for three hundred: vodka becomes a holiday drink due to price

“In the countryside, Russians have long switched to moonshine”

The Ministry of Finance proposed increasing the minimum prices for vodka, brandy and cognac. So, from January 1, 2024, 0.5 liters of “white” will rise in price from 281 to 299 rubles. How will rising prices affect the counterfeit alcohol market? How will demand change? Marketing expert on strong alcohol, member of the Guild of Marketers Ruslan Bragin believes that consumers will not notice the rise in prices. Rural residents switched to moonshine long ago, as the cost of vodka became prohibitive.

-Why raise prices for strong alcohol every year?

-Minimum prices for alcohol are indexed annually. A bottle of vodka cost 120 rubles, 160, and 190. This is normal. There are two reasons for this. The first is the reduction of alcoholism in the population or the fight for public health. The second is the fight against counterfeiting. If a consumer sees a bottle of vodka cheaper than its minimum cost, then it is a fake. And if marketers can use a psychological trick and set prices below a round number (for example, 39.90 dollars or 99 francs), then the situation is different with vodka for 299 rubles. The rise in price of vodka is a natural process aimed at two goals: combating counterfeiting and reducing alcoholism.

-Do producers’ costs contribute to the rise in price of final products?

– Of course. Previously, to make a bottle, manufacturers used Finnish paints, imported self-adhesive labels, and German foil. Now this is nothing. We have to get out and look for local manufacturers. Changing partners costs money.

-Could overcoming the 299 rubles mark be noticeable to consumers? How will the market react?

-If we drive 100 km from Moscow, we will see that they already drink vodka there only on holidays. It is expensive for local residents. They drink moonshine there. Those who live in large cities can afford vodka, but in rural areas everything is different. If we talk about the quality of the drink, then all vodka is good – for 300 rubles, and for 1.3 thousand, and for 5.3 thousand rubles. Alcohol consumers have two psychological thresholds: a bottle up to 500 rubles and up to 1 thousand rubles. If one or the other threshold is overcome, then the price no longer plays a special role.

-Rum was included in the list of drinks for indexation – 403 rubles. for 0.5 l. The category is quite small, but growing. Why rum?

-Rum is a very small category in the Russian Federation. There are three types: white, gold and aged. Aged and golden are drunk in quantity. White is used to make cocktails. Apparently, someone is tracking trends and, according to the Unified State Automated Information System for recording the volume of production and turnover of ethyl alcohol, alcoholic and alcohol-containing products, sees that the “rum” category is growing. Apparently, Russians are diversifying their portfolio of consumed drinks and focusing on rum. Therefore, they decided to fix the price at 403 rubles per bottle of 0.5 – the normal price for cheap unaged rum.

How will minimum prices change from January 1, 2024:

Vodka from 281 rub. up to 299 rub.

Brandy from 375 rub. up to 403 rub.

Cognac from 517 rub. up to 556 rub.