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. Last Updated: 07/27/2016

Report Says Russians Drank $20Bln in 2002

Russians downed one-third of the hard liquor sold in Europe last year and accounted for one-quarter of sales on the continent, according to a new report by British market research company Datamonitor.

By consuming 19 liters per capita -- or more than $20 billion worth of vodka, brandy, liqueur, rum and whisky -- Russian drinkers put the country at the top of the global table in terms of spirit sales, Datamonitor said.

About 80 percent of the strong alcohol bought in 2002 was "white" spirits, dominated by vodka, which Datamonitor estimated cost $16 billion.

Datamonitor analyst Jonathan McKenna said he expected vodka consumption to decrease only slightly in the coming years, predicting that the Russian national drink will have a 73 percent market share in 2007.

"Relatively cheap domestic produce and Russians' traditional love affair with vodka means it will remain untouched as the nation's favorite," he said.

Datamonitor put Poland, with sales of $5 billion, at No. 2 in terms of vodka consumption last year, and said the entire Western Hemisphere spent a total of $60 billion on the drink.

"Russian's rising income -- and local consumers' increasingly Westernized tastes -- will see more expensive alternatives to vodka perform strongly over the next five years,' McKenna said. "Brandy and cognac in 2002 compounded its position as the country's second favorite spirit."

Brandy and cognac accounted for 14.2 percent of all liquor sold in Russia last year, while liqueurs accounted for 6.16 percent, he said.

Consumer goods analysts said that outside Moscow, vodka remains far and away the nation's favorite drink.

"In volume terms [other spirits] are still a fraction of the total," said Pavel Shapkin, chairman of the National Alcohol Association, adding that the cheaper brandies are often quaffed as a substitute for vodka.

"The consumer is most conservative in the regions," Rimma Chainikova of BKG consulting group told Izvestia. "When buying strong alcohol here the choice falls about 100 percent of the time on vodka."

Cognac production was up in the first half of the year by 25 percent at 14.6 million liters. Vodka production was down by 1.4 percent for the same period at 617 million liters, according to the National Alcohol Association.

Not everyone agreed with Datamonitor's figures, however.

"Datamonitor's estimates are bullshit," said Andrei Sterlin, general director of Moscow research agency Business-Analytica.

Its calculations would put the average price of a liter of vodka at just under $7, he said.

Business-Analytica estimates that vodka cost $5 per liter on average last year in Moscow, $1 more than the national average.

Sterlin said total liquor sales in Russia last year totaled between $9 billion and $10 billion.

A report on the consumer market released Monday by Renaissance Capital said the proportion of Russian's disposable income spent on food and alcohol is expected to drop from 46.3 percent to 35 percent over the next six years.