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. Last Updated: 07/27/2016

Decree on Liquor Worries Traders

Liquor traders are worried about a recent decree on re-establishing a state monopoly on alcohol but few believe it will stop the booming trade that has seen imported and local spirits sold in many shops and kiosks and even on some sidewalks.

President Boris Yeltsin last Friday signed the decree which will increase state control of the industry, requiring registration of all liquor producers, regular checks on quality and closer control of alcohol advertisement campaigns.

The decree also outlaws sidewalk sales of alcoholic beverages and "sales from poorly equipped facilities".

The decree proposes the creation of a "state monopoly on alcohol sales", and some producers fear that all private alcohol trading will be stopped.

A sales representative for the Russian company Veles said her firm would stop trading in both imported and local liquor until it knew what the effect of the decree was. "We do not want to go bankrupt", she said.

She said that decree might extend to imported liquor many of the licensing restrictions now faced by local Russian brands. For example, she said that a law passed last year made trading in locally produced alcohol illegal without a special license.

But establishing a real state monopoly on alcohol trade would be impossible now because more than half Russia's shops have been privatized. Many producers suspect that the main effect of the decree will merely be to increase costs by requiring ever more licenses.

Artur Tovmasyan, deputy director of the state-owned wine/cognac plant Ararat, said he thought the decree was mainly aimed at bootleg illegal producers, who make alcohol in basements and attics.

Yevgeny Pedko, representative of the Pierre Smimoff Ltd. company, agreed, saying that over 40 percent of spirits on sale in the streets were poisonous. "I hope that the intention behind this decree was to fight illegal brewers, not quality-conscious companies like Smirnoff".

While the decree should be mostly aimed at street and kiosk sales, the kiosk owners themselves do not seem to be worried. "I have all the necessary permits", said Volodya, 21, a salesperson in a kiosk near Savyolovsky railway station. "But if the worst comes to worst, the state is not the only real power around here".

As the order contains very vague directions, the government has done nothing to implement it, yet. "The order says nothing about who personally is responsible for organizing the inspection", said Stanislav Ovchinnikov, a government spokesman. "We have not received any detailed orders on the issue".

The police, who are supposed to enforce the decree, are not familiar with it yet. "I am sure most militia officers have not read the decree and no guidelines have been worked out yet", said militia's spokesman Vladimir Zubkov. He said that it will take time to design special police operations.

Mikhail Odinets, head of the liquor production department for Rospishcheprom, the state agency in charge of liquor production which is supposed to form the basis of the new monopoly licensing organization, said he could not understand the reason for the latest decree.

He said that spirit distribution was already strictly controlled by the state. The only change is that licensed producers now have the right to produce any type of liquor they choose.