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. Last Updated: 07/27/2016

Beer Bosses Call for Lower Taxes, Government Support

The chiefs of the nation’s beer industry and politicians have appealed for government aid, saying high taxes and expensive grain imports endangered strong growth in a sector helping to fuel the country’s economic revival.

Viktor Semenov, a senior member of the State Duma’s economic and industry committee, said Tuesday the Kremlin needs to act to protect the sector’s 25 percent to 30 percent annual growth rate.

"One of the most important problems facing the beer sector is the price of raw materials," he told a news conference. "It’s a painful topic without resolution of which we cannot guarantee the development of the sector as a whole," he said.

Semenov called for a part of the excise duty paid by beer makers to be used to support domestic grain producers, allowing the industry to control costs by using cheaper home-grown types.

Taimuraz Bolloyev, general director of the nation’s No.1 brewer Baltika, said despite headline growth figures, the industry’s future could be threatened unless the authorities took action.

Baltika is part of Nordic beer group BBH, owned by Finnish Hartwall and Norway’s Orkla.

Light industry and the consumer sector could provide the engine for economic growth that road construction and the steel industry had done in Germany and the United States at key points in their economic development, he said.

"On Jan. 1, excise duty on the production of beer will go up again, 10 percent: Can we talk of the positive development of the sector under such circumstances? Of course, but with a lot of difficult," Bolloyev said.

Overtaxation impacted other sectors, including agriculture, machine-building, transport and trade, he said.

For each person employed directly in beer production, up to 25 others were employed in ancillary industries, he said.

Russia was still playing catch up with Western Europe in terms of beer consumption, Bolloyev said, noting Russians consumed around 36 liters of beer per head each year, compared with 70 to 90 liters in Europe.