Illicit liquor rise sparks vodka price cut

‘The overshoot of vodka prices leads only to increasing consumption of bootleg [spirits].’

PRESIDENT Vladimir Putin is not about to repeat the mistake that earned Mikhail Gorbachev the contempt of many of his countrymen in the Soviet era. The people must and will have vodka.

The minimum price of Russia’s national spirit has been lowered for the first time since a base level was introduced to improve the nation’s health in 2009. A half litre now costs from 185 roubles (NZ$3.71), down 16 per cent. The price reduction is designed to combat the production of illegal moonshine.

Putin, wrestling with the worst economic crisis of his 15 years in power, ordered his administration to rein in vodka inflation at the end of last year.

‘‘The overshoot of vodka prices leads only to increasing consumption of bootleg [spirits],’’ the president said.

Last year the price of vodka rose from 170 roubles to 199 and then to 220 roubles as the government accelerated a campaign to tackle binge drinking.

In giving the masses what they want, Putin appears to have learnt from the mistakes of Gorbachev, who declared war on alcoholism three weeks after becoming Soviet leader in 1985. He put up vodka prices, banned alcohol sales in the morning and slashed state production of vodka, wine and beer.

The effect was an immediate rise in life expectancy but also the devastation of ancient vineyards in Georgia and Crimea, queues at liquor stores, and a sugar shortage as people took to home distilling instead. Gorbachev ended the campaign three years later.

Recent research by the Centre for Federal and Regional Alcohol Market Studies backs up Putin’s move. It found that consumption of illicit alcohol had risen by up to 65 per cent since the minimum price strategy was introduced in 2009. At the same time production of legal vodka fell 22 per cent last year according to Rosstat, the state statistics service.

The worst month for distillers was December, when production fell by 47 per cent year on year as the rouble crashed under the twin pressures of the falling oil price and Western sanctions.

The economic outlook has continued to darken, with inflation up to 13 per cent in January, 7 per cent higher than it was a year ago, the rouble falling again and the prospect of peace in Ukraine receding. Russian factory output shrank faster last month than at any time since the middle of 2009.

Russians, on average, drink less vodka than they did a decade ago. However, a study published in The Lancet last year found that 25 per cent of Russian men die before they are 55, and that most of the deaths are alcohol-related.