In Russia, the minimum cost of vodka may increase to 301 rubles

In September, the Union of Alcohol Producers (SPAP) proposed to Finance Minister Anton Siluanov to increase the minimum retail prices (MRP) for vodka from 2024 by 7%. About it reports “Kommersant” with a link to a copy of the appeal.

Thus, the minimum selling price will increase from 229 rubles. up to 243 rubles, in the wholesale segment – ​​from 238 rubles. up to 253 rubles, in retail – from 281 rubles. up to 301 rub. per bottle 0.5 l.

SPAP explained that according to the plan, from 2024 the excise tax on vodka will increase by 5%, to 128.6 rubles. for half a liter. At the same time, companies are already affected by rising prices for imported closures, containers and ingredients due to the weakening of the ruble, as well as rising logistics costs. The Union expects that in 2023 the increase in costs for the production and circulation of alcohol will be at least 10%. They noted that raising minimum prices will help avoid selling below cost and reducing production.

The Ministry of Finance told the newspaper that SPAP’s appeal is under consideration. Two industry sources expressed confidence in a conversation with Kommersant that the proposal will be supported.

SPAP President Igor Kosarev noted that an increase in minimum prices by 7% still does not reflect the increase in all producer costs. He explained that indexation is necessary as a measure against unfair competition from companies that can sell vodka below cost using tax evasion schemes or with the support of regional budgets.

The Alcohol Siberian Group (ASG; part of SPAP) pointed to the “extremely low” profitability of the business. According to ASG, in 2023 the cost of vodka increased by 4.9%. They stated that without increasing the MRP, companies will operate at a loss, which threatens the development of a gray market. Ladoga (also part of SPAP) believes that increasing the MRP will bring the price a little closer to the real cost. Tatspirtprom said that it would be optimal to increase the MRP to 290 rubles. for 0.5 liters so that the increase for buyers is insignificant.

In early October, Rosalkogoltabakcontrol reported a decrease in alcohol production in Russia for the first 9 months of 2023 by 4.2% to 132.1 million decaliters compared to the same period in 2022. In particular, vodka production decreased by 5.7% to 54 .9 million decalitres. The department said that in 2022, alcohol production volumes were abnormally high, but now the market is stabilizing and returning to 2021 levels.