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Beer In Russia – Last Orders?
d=”standfirst”>Russian lawmakers are anxious to restrict the advertising of beer but, more importantly, they want a significant reduction in alfresco drinking, says Jon Rees
NOW IT’S up to president Putin, because if Russia’s legislators have their way the Russians’ propensity to drown their sorrows with a bottle of beer could soon become a thing of the past.
First, Russia’s lawmakers severely curtailed brewers’ ability to advertise their wares, restricting access to television and banning ads which might appeal to younger people. Now they want to go further. Their aim is to fundamentally alter the Russians’ love of a quick drink by making beer harder to get hold of and much harder to drink in public. Putin and the government do not like the plans, since every government, especially a Russian one, has to tread warily when trying to stop their people from enjoying the odd drop. But Putin had to swallow his doubts about the advertising changes and may have to do the same again this time.
The Russians’ mournful love affair with strong drink and their capacity for alcohol are legendary but the effects of that have frequently been unpalatable for Russian lawmakers. Russian beer consumption has doubled in the last five years to over 113 pints a head annually. No licence is required for shops or kiosks to sell beer and it is a common sight to see groups of teenagers knocking back bottles of beer in public parks and squares, and at all hours of the day. The Russian attitude to beer is also significantly different to the West’s. Russians view it as almost a soft drink, and it is quite common to see office workers drinking beer on the train on the way to work.
However, it is partly as a result of the ingrained laissezfaire approach that the country has over 22,000 registered child drink and drug addicts. How to curb the Russian thirst for drink is a tricky area for politicians, though. It was the old Soviet regime which tried to restrict consumption of vodka, and they tried it more than once, too. The last time was under Mikhail Gorbachev, who was vilified by his countrymen as a result.
Now, though, Russia’s lower house of parliament, the Duma, is trying again. A few months ago it passed a law severely restricting the advertising of beer. No beer is allowed to be advertised on television between 7am and 10pm, and no beer advertisements are allowed to feature people, animals or cartoon characters – meaning the semi-nude women, heroic soldiers and cute bears who are used to advertise beers. No beer posters are allowed within 100 yards of a school, either.
These rules, which are set to be introduced at the start of 2005, were wildly unpopular with the Russian government and with the Federation Council, Russia’s higher parliamentary body. But introduced they will be, though the council is pushing for an amendment to allow beer advertising at sports stadia. Now Russian lawmakers have decided the restrictions have not gone far enough.
There has been quite a parliamentary tussle over it, too. The Duma first proposed banning beer drinking in public places, like streets and parks as well as schools, daycare centres and hospitals. Only licensed restaurants and bars would be exempt. It also proposed the introduction of a minimum age (18) for alcohol consumption in Russia for the first time.
Drinking in the profits
This would have an enormous effect on the Russian market, which differs significantly from markets in Europe because about a third of all the beer Russians buy is consumed on the spot, in the street. The brewer, Sun Interbrew, controlled by Belgium’s InBev, is Russia’s second largest brewer (which made $60 million profit in the third quarter of 2004 alone), and it says only 6% of its sales are in restaurants, with about 30% drunk right away. It also says two-thirds of the 20 million hectolitres of beer it sells each year are sold at street kiosks; and there are over 600,000 such kiosks in Russia.
Beer companies are making huge profits in Russia and brewing is also one of the few ways foreigners can get exposure to the boom in consumer goods in the former Soviet Union. Russia is the second fastest growing market for beer in the world, behind China, and brewers have relished its consumption, which makes up for flat sales in the West.
Russian brewers, most of which are foreign-owned like SunBev and the market leader Baltika which is co-owned by Carlsberg and Scottish & Newcastle, were appalled by the new proposals. The bill is part of an attempt by the Russian parliament to curb other excesses in post-Soviet society. For instance, the Duma has also introduced a bill which would curb the amount of violence shown on television and not just in drama, but even on the news.
The brewers, who were apprehensive about the advertising restrictions, were delighted when the Federation Council rejected the Duma’s proposal and sent them back for revision. The Council said it supported the bill “from a moral point of view” but feared it would “drive young people into staircases and provoke clandestine beer sales for higher prices as well as massive bribe-taking by police”. So the brewers breathed a sigh of relief, but not for long.
The end is nigh?
When the Federation Council sent the bill back to the Duma it was intended that the two houses would go into council and revise the measures, and vote again later in the year. The brewers hoped a less strict bill would result, but in fact the reverse was the case. The amended bill is stricter than the original: beer sales and drinking will be banned on commuter trains, on streets, in stadia, on public transport, in parks and in other places where there are no cafes or restaurants. Beer sales would also be banned near schools and universities and to people under 18. Violators of the new rules will be fined 100 roubles.
To become law, the bill must be approved by the Federation Council which, seeing as it was produced by a conciliatory committee which was set up at its urging, is likely. Then, it’s up to Putin to risk the wrath of the Russian people.