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. Last Updated: 07/27/2016

Taxman Suspends Alcohol Licenses

Tax authorities have suspended the licenses of several hundred alcohol producers, but industry players insisted Thursday that supplies would not be affected.

The suspensions are the latest hitch in a troubled government initiative to crack down on bootleg liquor by creating an automated system to track wines and spirits.

On June 4, the Federal Tax Service sent out letters to producers across the country that notified them of the suspensions over their failure to comply with a May 1 deadline to install meters in their plants and process all necessary accompanying documents.

"If the companies rectify these breaches and comply with the legal demands, their licenses will be renewed within a short space of time," the tax service said in a statement.

Last summer, problems with a database caused shop shelves across the country to run dry of wine and spirits, bringing the alcohol industry to a halt.

Early this year, a preliminary Feb. 1 date for the new system to go fully automated was scrapped after producers complained that the necessary equipment was not in place. The producers were then given a new Nov. 1 deadline to get the system up and running.

A Federal Tax Service spokeswoman would not specify how many companies had their licenses suspended.

But Pavel Shapkin, director of the National Alcohol Association, estimated that about 60 percent of all alcohol producers had received the letters.

About 400 companies produce vodka and spirits in Russia, said Marina Lepenkova, a market analyst at Business Analytika. She did not know offhand the number of wine producers.

Vedomosti, which broke the news Thursday, said 300 companies had lost their licenses temporarily. Managers at several plants, reported to be affected by the suspensions, were unavailable for comment Thursday.

Other producers were adamant that they had complied with the tax service's requirements within the given deadline.

Vitaly Kurilov, spokesman for the Liviz liquor plant in St. Petersburg, said his firm had complied with the tax service's deadline, but complained about bureaucratic complications. "The main problem that can arise is that you do not only need to install the meters that you receive but also get them certified," Kurilov said.

While admitting that the complex process of renewing licenses could take firms several weeks to complete, Shapkin maintained that despite this fresh round of problems, the alcohol industry was unlikely to be hit by a new supply crisis as large reserves are in place.

"What happened last year will not be repeated," he said.