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. Last Updated: 07/27/2016

Domestic Beer Fears Alcohol Controls

Domestic brewers warned Friday that proposed alcohol controls could make business f already battered by the financial crisis f even worse.

Leading beer producers said Friday that they had sent letters to President Boris Yeltsin and parliament to protest a bill that would force them to "sharply cut beer production volumes in Russia and significantly raise prices." The signatories include the Baltika, Ochakovo and Yarpivo breweries.

Baltika, Russia's largest brewer with a 13 percent market share, has seen the crisis slash its sales from 30 million liters a month to 16 million liters in September, general director Taimuraz Bolloyev said at a news conference Friday.

The beer maker could be forced to permanently halve production if the bill is passed, he said. The producer's taxes account for 10 percent of St. Petersburg's city budget.

The bill provoking domestic producers' wrath is an amendment to a 1995 law on alcohol.

Among other things, the new legislation calls for tougher licensing on production and a state monopoly on the export and import of most kinds of alcoholic beverages.

The amendments are awaiting final approval from the Federation Council, parliament's upper house, before becoming law. The State Duma, or lower house, already overrode a Yeltsin veto of the bill.

"It is obvious that the Duma deputies that voted for this law do not understand the social and financial consequences of their vote," Alexander Kochetov, president of the Ochakovo brewery, said Friday. "They don't understand that it is Russia that is losing with these limitations."

Domestic beer makers complained that the bill would allow foreign producers to hold up to 10 percent of the market, a portion 5 percent larger than they now hold.

Recent government steps to introduce stricter controls on the alcohol industry have met with outrage from all sides of the sector.

Earlier this week, European liquor producers called for round-table talks with state officials over fears that new legislation might exclude them from the Russian market.