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. Last Updated: 07/27/2016

St. Pete Booze Tax Spent on Cell Phones

ST. PETERSBURG -- A new St. Petersburg program to crack down on bootleg alcohol collected $275,000 in its first two weeks - but not a single kopek went to the city budget, officials said.

Instead, officials at Peterburgalkogolkontrol - the city-owned company responsible for regulating the local alcohol market - have been buying scanners, cars, mobile phones and renovating their offices, said Peterburgalkogolkontrol director Alexander Golubev.

Since May 15, every bottle of liquor sold in St. Petersburg with an alcohol content above 25 percent has been required to have a special holographic excise stamp. In the last two weeks of May, Peterburgalkogolkontrol sold 6.7 million such stamps to producers and wholesalers for 1 ruble each, Golubev said.

"It is difficult to plan our revenues," Golubev said when asked at a news conference last week how much of its revenues Peterburgalkogolkontrol is supposed to contribute to the city budget.

Despite the apparent lack of tight fiscal oversight, however, Golubev is optimistic that his company will soon be generating monthly revenues of up to 20 million rubles (about $810,000) for the city budget.

The city's holographic stamps are difficult to forge and provide a very efficient way to control alcohol revenues, Golubev said, adding that neither he nor his employees have encountered a single fake stamp. Golubev has, however, been approached by parties interested in buying unregistered stamps at two to three times the regular price, he said.

Each stamp is registered in a special database, making it possible to know exactly when and where the alcohol was produced by the touch of a scanner.

"We patrol dozens of stores to make sure all the bottles are marked," he said.

But if the program was designed to rid the market of bootleggers, it has had the opposite on at least one local producer. Alexander Sabadash, director of vodka maker ABF-2 and co-owner of Liviz, the oldest vodka factory in St. Petersburg, has moved his ABF-2 operations to the Leningrad region town of Vsevolozhk, saying the price of the stamp would hurt his market share.

The region charges less for excise stamps and offers tax exemptions.