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Putin wages war on vodka as lifestyle death toll mounts

An anti-tobacco law submitted to parliament this week will ban smoking in public places, advertising and kiosk sales. That follows measures to curb the world’s fourth-highest alcohol consumption per capita with tax increases and by limiting trade.

Russia is the world’s second-largest market for cigarettes and alcohol, according to official estimates. The country’s population of 143-million is five less than in 1991, when the Soviet Union collapsed. Alcohol and tobacco abuse costs the Russian economy at least $104-billion a year, or 5 percent of gross domestic product, the government estimates.

“Putin has set himself the goal of reversing the population decline through encouraging a more healthy lifestyle,” said Sergei Markov, a former lawmaker in the ruling United Russia party and vice-rector of the Plekhanov Russian University of Economics in Moscow. “But if you look at our history, Gorbachev wasn’t successful in that.”

The crackdown risks encouraging Russians to seek counterfeit cigarettes and drinks, according to tobacco companies and alcohol industry analysts. Illegal sales of vodka — which is priced as little as $1 for a half-litre — will rise to 60 percent from 35 percent of the market by 2014, according to the Center for Federal and Regional Alcohol Market Studies. Illicit tobacco trade may expand to 40 percent of the market from 1 percent, the lobby group Tabakprom estimates.

Prime Minister Dmitry Medvedev on Oct 16 railed at Philip Morris International, British American Tobacco, Japan Tobacco and Imperial Tobacco Group, blaming them for addicting millions of children and women to cigarettes since the early 1990s. The four companies control 93 percent of the $19.5- billion Russian tobacco market. Thirty-nine percent of Russians smoke regularly, according to the World Health Organization.

Five foreign-owned companies hold more than 80 percent of the beer market in Russia — Baltika Breweries, part of Carlsberg, Anheuser-Busch InBev, Heineken, Andalou Efes Biracilik & Malt Sanayii and SABMiller. The alcohol market in Russia, which is 24 percent vodka and 51 percent beer, is worth $34.4 billion according to Euromonitor, a consumer research company.

Russian vodka sales will decline 4 percent by 2016 and beer sales will remain stagnant over the period, Euromonitor predicts. Russia this year increased the minimum price of a half-liter of vodka to 125 rubles ($4) and plans to raise it to 200 rubles by 2015, according to the government daily, Rossiiskaya Gazeta. Beer duties were increased threefold in 2010 and will be six times higher in 2015 than in 2009…..

The Independent: Read the full article

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