Moscow – First the new Russian President, Vladimir Putin, moved to
curb the powers of his regional governors. Now follows a no less
ambitious
bid to take control of one the nation’s mightiest levers of power –
vodka.
It’s not a campaign against the formidable drinking habits of the
population – Putin preaches pragmatism, not mission
impossible.
Rather, this is a straight crackdown on the booming black market supply
of
sub-standard alcoholic drinks and the nebulous accounting practices of
private entrepreneurs dominating the billion-dollar industry.
Since the bulk of proceeds from sales of hard liquor often flows into the
budgets and pockets of those same regional governors, the government
has as
an aperitif reopened a page from the Soviet era, setting up a state
enterprise called Rosspirtprom.
This will establish unified control over existing state shares in Russia’s
89 major distilleries, and presumably is to replace the local bosses’
jealous monopoly on production with its own.
The Russian parliament is also urging as a first step that a state
monopoly
be reimposed on the production of popular traditional brands of vodka like
Russkaya, Moskovskaya, Stolichnaya and Zubrovka.
Alcohol was always one of the country’s most strategic products, rigidly
controlled and supplied in cheap abundance by the Soviet government to
keep
the working man happy with his lot.
With the collapse of the Soviet Union in 1991 the state monopoly was
gradually eroded by the rapid appearance of independent manufacturers
of
vodka and other strong alcoholic beverages.
Some firms specialised in producing cheap and often dangerous liquor
affordable to large impoverished sections of the population, often with
little quality control and with tragic consequences.
In 1999 some 27,198 deaths in Russia were attributed to alcohol
poisoning,
more often caused by sub-standard hooch than quantity. This year already
looks like a record-breaker, with 9,261 fatalities recorded in the first
quarter.
But while grand government schemes often come and go in Russia with
little
visible effect, this time the financial incentive for an all-out clampdown
on the industry is there.
According to government estimates, illegally produced liquor in 1999
accounted for 40 per cent of the 2.5 billion litres of spirits consumed,
meaning that about 1.2 billion dollars circumvented state
control.
To reestablish its presence on the market, the government intends to
review
the legality of controlling stakes in famous distilleries like Kristall in
Moscow, Bacchus in Voronezh and Kedr in Irkutsk, which were often
surrepticiously acquired by proxy by regional governors.
In some regions, tax breaks are conspicuously accorded to the these
producers while the brands of “outsiders” are barred from the
market.
Following Putin’s recent appointment of seven new regional envoys to
ensure
the governors observe federal laws and Moscow’s instructions, an eighth
official with sweeping powers over the nation’s distilleries will be
appointed alongside as “liquor chief”, press reports say.
And just to complete the picture of a Soviet-style operation to bring the
market to heel, the man tipped to head the fledgling Rosspirtprom is a
certain Sergei Sivenko, a lieutenant-general of the FSB domestic
intelligence service and colleague of career KGB agent Putin.
