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. Last Updated: 07/27/2016

New Decree Aims to Ban Liquor Sales From Kiosks

A new presidential decree threatens to ban the sale of hard alcohol from kiosks as of July 1, a move that could make the midnight run for vodka to keep a party going a relic of the past.


The government's latest move to rein in the country's wild alcohol market to boost tax revenues drew a skeptical reaction from observers, who noted that many previous crackdowns have amounted to little.


But kiosk owners in Moscow on Monday were alarmed by the decree, which they say could take away their main source of profits and drive them out of business.


The decree, signed by President Boris Yeltsin on April 30 and released by the Kremlin press service Monday, requires local and federal authorities to halt within two months the sale of alcohol stronger than 12 percent -- excluding mostly beer and wine -- at any outlet without a walk-in sales space. The text appears to allow glassed-in quasi-kiosks to continue operating normally.


"The goal of the decree is to put an end to the intolerable situation whereby 80 percent of alcoholic beverages are sold without excise stamps through kiosks and wholesale food markets," said new First Deputy Prime Minister Boris Nemtsov, who was the main initiator of the decree. Such sales cost the federal treasury trillions of rubles (billions of dollars) a year, he said.


In the years since round-the-clock kiosks sprang up on city street corners, Russians have become accustomed to easily available and low-cost vodka, with far fewer regulations on its sale than in the West.


By controlling the number of places where hard liquor is sold, the government hopes to ensure that only legally produced spirits on which taxes have been paid can be bought by the public.


The decree also is aimed at tightening state licensing of small regional alcohol producers, and Nemtsov said it would help rid the market of often dangerous bootleg liquor.


Interior Minister Anatoly Kulikov and regional leaders will be in charge of implementing the decree, Nemtsov said.


Whether local authorities actually will enforce the measures ordered by the decree is open to question, observers said.


"In some regions they will, in some others they won't," said Pyotr Shelish, a Duma deputy and chairman of the Consumers Union of Russia.


Moscow city officials responsible for regulating alcohol sales could not be reached for comment Monday.


Alexander Morozov, an economist with the World Bank in Moscow, said attitudes of local authorities and the ability of traders to skirt punishment by bribing enforcers would undermine the decree's effectiveness.


"I still have doubts whether the government will be able to move all the sales of alcohol to organized structures," he said.


But kiosk managers took the decree very seriously, perceiving it to be a real threat to their existence.


"Those who will continue to sell vodka in their kiosk will need a lot of money to get the permission to do it," said Erik, standing behind a kiosk counter near the Belorussky train station.


A sales clerk at the kiosk, who gave her name only as Marie, said sales of hard liquor account for about half the outlet's monthly profits.


Bagrad, 24, in the trade business since 1989 and owner of a kiosk nearby, said sales of beer, videotapes and sweets alone would not suffice to pay his rent after July 1.


He did not say how much he pays, but a clerk at a neighboring kiosk said the monthly charge is $5,200.


The government, however, appears more concerned with its own fiscal well-being than that of kiosk owners.


Alcohol taxes were one of the country's main sources of revenue in Soviet days, Morozov said.


But with illegally produced vodka sold through kiosks now accounting for the bulk of sales, the state's revenues from alcohol have slowed down to a trickle.


Excise duties on alcohol in 1990 accounted for 18 percent of the state's tax budget revenues; this year they are expected to reach only 3 percent, Morozov said.


The government in the past has set mandatory minimum prices for vodka and ordered licensing and import restrictions, usually to little effect.


But even if the government does increase its revenues thanks to the new decree, Russians know private individuals are unlikely to be deterred from trading vodka on their own.


"There will be more babushki selling vodka in the streets. Who knows whether they will sell good stuff or bad stuff," said Sveta, a 40-year-old mother passing by with her daughter.


"And it won't stop people from drinking in the streets," she said.