Putin and vodka. What an interesting mix. Apparently, he
wants a "level playing field," which bodes well for future
legislation on our part. I wonder if he is holding back
until after the election?
Kulik Proposes Cheaper 'Putinskaya' Vodka
By Andrei Zolotov Jr.
STAFF WRITER
photo by Alexander Belenky
MOSCOW - When former KGB chief Yury
Andropov became Soviet leader in 1982, it was not
just a law-and-order appeal that ensured his
popularity. What really won people's hearts was
cheaper vodka.
After the late Brezhnev-era vodka price hike (from
the legendary 3.62 rubles to 5.30 rubles per
standard half-liter bottle), Andropov's brief term at
the helm of the Communist Party saw the appearance of somewhat lower-quality,
green-labeled vodka at 4.70 rubles.
And so it went down in history as "Andropovka." Grateful citizens even came up with
their own lore about what VODKA stands for: vot on dobry kakoi Andropov, or How
kind he is, Andropov.
Acting President Vladimir Putin has not been so kind to vodka drinkers, i.e. to the
majority of his people. Although he also comes from the KGB and has a law-and-order
appeal, his vodka policies, so far, have been vastly different from Andropov's. An
increase in excise taxes in recent months has caused retail prices of vodka to rise by as
much as 40 percent since last summer.
That may well change if Gennady Kulik, deputy chairman of the State Duma's economic
policy committee, gets his way. He has proposed a "people's vodka," which was
immediately baptized "Putinskaya."
The idea was floated Thursday at a round table of vodka producers and merchants,
where Kulik said the government's increase in vodka taxes was a "grave mistake."
"Vodka helps us lead a normal way of life," Kulik was quoted as saying by the
Kommersant newspaper.
According to reports in the Russian press, Kulik's proposal is simple: The government
announces a "tender" among alcohol factories. The winners get "quotas" to produce
cheap, "people's vodka" and then receive tax breaks - as much as half of the excise tax is
slashed.
To the applause of the audience, Yury Bobryshev, chairman of the board of the Rosalko
vodka company, called for naming the vodka "Putinskaya," Kommersant reported.
Backers of Kulik's proposal said the availability of cheap legal vodka would help push
out the illegal vodka producers, while at least bringing in some tax revenues for the
state.
Economist Mikhail Delyagin, though, was sharply critical of Kulik's proposal, saying it
would not be possible for taxed vodka, even if cheap, to compete in price against
untaxed, illegal vodka.
Delyagin said that, by a conservative estimate, about one-third of Russian vodka
output is illegal. "Nobody really wants to fight it," he said Friday in a telephone
interview.
Further, tax breaks for selected factories would open the way for corruption while at the
same time violating the rules of economic competition, he said.
Delyagin, director of the Institute of Globalization Problems, said there was reason to be
skeptical of any plan proposed by Kulik.
"Any proposals coming from Kulik have to be considered first and foremost from the
point of view of the Criminal Code, and only then from the point of view of economic
expediency," he said.
Kulik, who served as deputy prime minister in Yevgeny Primakov's cabinet, has gained a
reputation as a supreme lobbyist of the agro-industrial complex. He has played a major
role in several widely criticized projects, including the acceptance of U.S. food aid.
Yabloko leader Grigory Yav lin sky in November 1998 asked Primakov to look into
allegations that Kulik had engaged in improper commercial dealings.
Delyagin said Kulik's plan to allow some companies to produce a "people's vodka" and
pay less tax would inevitably lead to bribery and tax evasion.
The creation of unequal conditions for various vodka producers also goes against
Putin's declared economic policies. Russia's would-be president has said his goal is to
create a level playing field with equal opportunities for businesses regardless of their
ties to authorities.
It was unclear what officials from the Finance Ministry and State Tax Service thought of
Kulik's proposal. None of them attended Thursday's round table, newspapers reported.
Even vodka producers were divided over the "Putin" vodka proposal. One of the
project's critics was former Tax Minister Georgy Boos, now Kulik's fellow Duma deputy.
"There will be no such thing as people's vodka," Boos was quoted by Vedomosti as
saying. "There will be people's machination and several factories will get huge
advantages."
In order to protect legal, tax-paying vodka producers, the government on Feb. 25 set an
official minimum retail price of 62 rubles per liter, which translates into 31 rubles per
standard bottle. It was as if to say what is cheaper is illegally produced and can be
dangerous. The measure did not generate another price hike, because retail prices were
already above the official minimum.
A trip on Friday around some city liquor stores revealed that the cheapest legal vodka
available was Stolichnaya produced in the town of Beslan, North Ossetia. It went for 33
rubles. Mid-range vodkas produced by Moscow's Kristall distillery were from 45 to 57
rubles per half a liter. Premium vodkas were on sale for 105 to 210 rubles.
Svetlana Romanova, a saleswoman who said she had two years' experience selling
vodka, said Beslan Stoli sold well. But she was skeptical whether a 20 ruble
"Putinskaya" vodka would sell. "Cheap vodka means sh***y vodka," Romanova said.
"People will be afraid of it. It is better to make it mid-priced."
In another store, a slightly drunken woman in a white gown asked for the "cheapest"
vodka. Asked whether she would like to see cheaper vodka, she blurted out angrily:
"Both sausage and vodka are so expensive. Yes, I like to drink a bit." She then headed
back to the dental clinic where she works.
Vodka policy has a history of helping make or break the country's leaders. Soviet
President Mikhail Gorbachev was hated by most Russians for his notorious
"anti-alcohol campaign" in the mid-1980s, which shut down factories and introduced
vodka rationing. |
