Alexander Khloponin: we are open for initiatives of separate regulation in the brewing industry

june 17, 2016

Alexander Khloponin, Deputy Chairman of the RF Government, met the stakeholders of the brewing industry – Jacek Pastuszka, Baltika’s CEO, and Etienne Strijp, HEINEKEN’s CEO, in St. Petersburg International Economic Forum. The parties focused on corporate environmental responsibility, commitment to encourage responsible consumption, as well as diverse types of packaging.

“I share a position that seeks to restrict the PET size to max. 1.5 l. It matches today’s market conditions”, noted Alexander Khloponin. Looking back, a year ago, in May, Mr. Khloponin communicated the government’s position to support PET restriction to max. 1.5 l. The parties reported about the compliance with this obligation.

In their turn, the brewers acknowledged that Q1 saw an uptick in beer manufacture partly due to the comparison with the last year’s key figures as well as the true reflection of production volumes of some small companies that became possible after the adoption of the Unified State Automated Information System.

Moreover, the parties discussed the situation in hand, its long-term growth prospects, including amid the today’s excise policies and approach to regulation.

In 2009, the government embarked on a concept of a public policy until 2020 with the focus to reduce and prevent alcohol abuse among people living in the Russian Federation. One of its outcomes was that beer products were classified as alcohol resulting in dramatic restriction of beer sales and beer promotion. The excise duties on beer also increased tenfold.

This approach made the Russian regulation and taxation system in the brewing industry one of the most stringent in Europe. According to brewers, their offer became non-competitive vs. liquors, especially fake alcohol. Throughout several years beer manufacture dropped more than threefold.

According to Alexander Khloponin, the government is ready for an open dialogue with business. Together with the Union of Russian Brewers, he offered to focus on the long-term regulation issues in the industry, including probable freeze of excise duties and separate regulation, with a wider audience on one of the September meetings of the governmental commission for the improvement of competitiveness of alcohol market.

In conclusion, the brewers appreciated the governmental efforts in the battle against bootlegged vodka producing positive effect on the brewing industry.

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FOR REFERENCE. The Union of Russian Brewers is a not-for-profit organization bringing together Russian brewers. Its members include 86 companies with 90 production sites in the Russian Federation and over 80% beer share in the country. The Russian brewing industry covers over 850 enterprises with diverse capacities and sites located in 73 entities of the Russian Federation.

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