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At SPIEF President of Baltika Breweries told about illegal beer market development risks

On May 24, the St. Petersburg International Economic Forum hosted the session «Coordinating the International Effort Against Illicit Trafficking in Manufactured Goods: Potential Ways Forward». The participants discussed roles of business, state and international cooperation in organizing effective counteraction to the growth of the illegal market in Russia. Particular attention was focused on labeling and its expediency for different industrial sectors.

Aslambek Aslakhanov, President of Anti-Counterfeiting International Organization: “Today we are faced with the situation when the industrial goods illegal turnover takes on a large scale. This is a serious risk for business development, investment attractiveness of our country and, eventually, for the economic stability of the state. All parties concerned understand the importance of the issue: legal business, the state and business organizations are making efforts to solve it. When fighting against illegal turover, it is very important to strike a balance and to choose the most appropriate state control measures, which will not harm legal companies, as well as take into account the specialties of each industrial sector.”

Jacek Pastuszka, President of Baltika Breweries, Executive Vice President Eastern Europe Carlsberg Group told about illegal beer market development risks and the lack of necessity of the labeling introduction for the brewing industry. 

The brewing industry provided almost 100% collection rate of excise taxes for many years, there was no illegal market. Since beer started to be governed as strong spirits and the legislative pressure increased, the groundwork for changing the situation was laid.

There are no assessment tools or substantiated objective evidence of the illegal beer market at the moment. So, before choosing the methods of fighting against illegal segment, it is necessary to understand all levels of the problem: to identify the basis and the mechanisms of its development, to determine geography and the real extent and development forecasts. Now the opportunity of labeling implementation is being discussed on the legislative level. But in the situation, when there is now overall picture of the illegal beer market, the implementation of such measures seems irrational and may only motivate the «gray» segment growth. Furthermore, the legislation strengthening will first affect the legal producers.

Jacek Pastuszka, President of Baltika Breweries, Executive Vice President Carlsberg Group Eastern Europe: “Today, brewers and regulatory authorities have productive dialogue on the growth of illegal beer market prevention subject on federal level. Baltika Breweries and the Russian Brewers Union held number of consultations on this topic: with the Ministry of Economic Development, the Ministry of Finance and the Federal Service for Alcohol Market Regulation. In addition, the discussion to gather opinions among members of Russian Brewers Union (Baltika Breweries is an active participant) on possible measures to prevent the growth of the illegal beer market had been raised. The results of the discussion were submitted to the Ministry of Finance. Now the scientific research, which will help to understand the real situation, is needed. Now we are discussing alternative measures with the Government. We believe that it is necessary to focus on the implementation of the already offered tools and assessment of their effectiveness at the federal level, and to continue working within the relevant commissions on combating counterfeiting at the regional level.”

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Baltika Breweries, part of the Carlsberg Group, is one of the largest producers of fast moving consumer goods in Russia. Since 1996 – No. 1 on the Russian beer market. Baltika has 8 breweries in Russia and a wide brand portfolio. The company is a significant part of the Carlsberg Group and its Eastern Europe region, which also includes Azerbaijan, Belarus, Kazakhstan and Ukraine. Baltika Breweries is the top exporter of Russian beer: the products are presented in more than 75 countries worldwide, in 43 of them the company is the only Russian supplier in this category. Company brands gained more than 670 Russian and international awards in professional and consumer competitions.

Baltika Breweries conducts business honestly, openly and transparently. The company is one of the largest taxpayers in the regions of presence. Tax transfers of the company to the Russian budget amounted to about 62.5 billion rubles, about 66% of them - excises (41.3 billion rubles) in 2017.

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