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Vodka prices may rise 5-fold in Kazakhstan by 2020

06 september 2013, 11:32
0

Vodka prices may rise 5-fold in Kazakhstan by 2020, President of KAZALCO Association Amirzhan Kaliyev told Tengrinews.kz.

The respective protocol of the Eurasian Economic Commission dated June 5, 2012 provides for use of equal excise tax in the Customs Union (CU) member-countries by 2020, he said. This means that the cheapest legal vodka will cost around 1,500-1,600 ($10-11) per 0.5 liters versus the current 320 tenge ($2) in Kazakhstan. "The retail price of cheap vodka will grow almost 5-fold. This will be a gigantic spike with an extreme breakaway from the real life," Kaliyev said.

Producers of alcohol products are not happy with the perspective, he said. "In our view, harmonization of the excise rates has to be done with consideration of our people's incomes. The excise raising policies should be adjusted to the raise of the people's salaries and the cost of living," Kaliyev said.

One of the drawbacks of the excise raising, according to Kaliyev, is that drinking people will no longer be able to afford legal vodka and will start buying cheaper counterfeit alcohol of doubtful quality.

Amirzhan Kaliyev. Photo courtesy of vesti.kz

Amirzhan Kaliyev. Photo courtesy of vesti.kz

Speaking of alcohol abuse among Kazakhstan residents, the representative of KAZALCO said that a majority of the residents were consuming less alcohol every year without any legal restrictions, such as prices raise or introduction of any additional limitations. "We don't see much positive result from the excessive excise tax raise in Russia, on the contrary, many problems have emerged, such as escalation of "shade" production, consumption of spirit-containing technical liquids and mass production of home-brews in the regions. This shows that there is no real need to harmonize the excise taxes and bring Kazakhstan tax to the Russian level repeating their mistakes," Kaliyev explained.

However, Kazakhstan lawmakers share a completely different statistics of alcohol consumption and abuse in the country. In 2011 Senator Murat Mukhamedov said that the number of alcoholics had grown 10-fold in Kazakhstan over the previous 10 years. According to him, 33.3 percent of the population consumed alcohol. Almost 60 percent of them were teenagers and young people aged under 20.

"According to the World Health Organization if the consumed spirit does not exceed 8 liters per year per capita, it does not effect the nation's genetics. We have 12 liters per capita. This shows that our nation is devolving and giving way to destruction," Mukhamedov said. The senator saw the main cause of the problem in low prices for alcohol and its accessibility.

©RIA Novosti

©RIA Novosti

Amirzhan Kaliyev, trying to prove that alcohol consumption was decreasing, spoke about closure of two distilleries and one spirit factory in 2012. According to him, the number of alcohol-producing companies had halved over the previous 7 years. Most over the factories closed down because of insufficient demand for their goods.

Earlier deputy Finance Minister of Russia Sergey Shatalov suggested to harmonize excise rates on strong alcohol and cigarettes in the Customs Union. He explained the suggestion by pointing out that alcohol goods from other CU countries were flooding Russia.

By Vladimir Prokopenko


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