You are here

Russia works to shake off bootleg vodka hangover

33904122 - 11_02_2015 - eqsalon12.jpg
In a recent raid, police seized more than 100,000 half-litre (one-pint) vodka bottles with counterfeit labels and tax stamps from the barn in the village of Kuchki.

[KUCHKI, Russia] In a snowy field outside Moscow, an abandoned barn conceals an illicit vodka distillery that produces thousands of bottles of Russia's national drink for the black market.

In a recent raid, police seized more than 100,000 half-litre (one-pint) vodka bottles with counterfeit labels and tax stamps from the barn in the village of Kuchki.

Surrogate alcohol, a cheaper alternative to store-bought spirits, accounts for many deaths in Russia every year and is coming under growing scrutiny in a country with one of the highest liquor consumption rates in the world.

This week at least 71 people died in the Siberian city of Irkutsk after drinking bath essence containing toxic methanol in a bid to get merry on the cheap.

Market voices on:

The bottles discovered in Kuchki cost under US$2 each - three times less than vodka sold in shops.

"We don't know what they make this vodka with," said Alexander Kulikov, spokesman for Russia's alcohol regulator.

The equipment at the barn looked clean, but Mr Kulikov recalls a case in which vodka-makers at another illegal facility were working "with mud up to their knees".

After banning the sale of spirits at night and hiking alcohol taxes, authorities have started cracking down on bootleggers in a bid to curb the damage wreaked by illegally-produced booze.

Officials say they have dismantled more than 170 workshops, seizing over 37 million litres since Oct 2015.

Authorities are also hoping the crackdown will help address the problem of unpaid taxes by illegal alcohol producers, as low oil prices have hit Russia's coffers.

A new law came into force in July requiring business owners who sell alcohol to join an electronic registry that tracks each bottle from production to sale, an initiative meant to prevent surrogate booze from making its way onto the shelves.

This has seen legal vodka sales bounce back after years of stagnation, hinting that the black market is shrinking.

Vadim Drobiz, a researcher who studies alcohol markets, says the black market share in hard liquor sales dropped to 50 per cent this year after standing at 65 per cent in 2015.

But as Russia struggles to pull itself out of a recession that has battered the currency and significantly diminished people's purchasing power, it seems unlikely the black market will disappear altogether.

According to Mr Drobiz, up to 25 million Russians do not earn enough to purchase liquor at official selling points.

Hoping to save a few rubles, the poorest often turn to cosmetics and household products containing alcohol, a factor blamed for a large number of drink-related deaths.

In late 2014, when the ruble lost half its value off the back of Western sanctions and low oil prices, authorities dropped the price of vodka after President Vladimir Putin expressed concern that soaring prices could boost consumption of illegal booze.

Throughout history, Russian leaders have had to act with caution when it comes to regulating alcohol.

On the eve of World War I, tsar Nicholas II ordered a crackdown that fuelled moonshine production and demoralised his troops.

And in the 1980s, a sobriety campaign spearheaded by Soviet leader Mikhail Gorbachev drove his popularity down.

The number of alcohol-related deaths has fallen in recent years, according to the state statistics agency, with experts attributing this to measures implemented to curb the sale of illegal spirits.

"Alcohol abuse is down," said Yevgeny Bryun, who heads Moscow's toxicology centre, stressing that the number of poisoning cases had dropped 30 percent in the past three years.

"But we need to go further," he said, citing the need to stop Russians from drinking pharmaceutical products.

A remedy called hawthorn liqueur, which is believed to help treat insomnia and is widely available in pharmacies, has become popular among Russians looking to get drunk cheaply, and authorities are weighing measures to better control its distribution.

The health ministry is expected to limit its sale to 25-millilitre bottles, while the finance ministry is looking to impose taxes on it like an alcoholic drink.

The bath essence scandal in Irkutsk saw Mr Putin order tougher laws on the production and sale of perfumes, lotions, medicines and household cleaners containing alcohol.

But Mr Drobiz warned against introducing stringent regulations on such products, which remain the only drinking option for many impoverished Russians.

The problem, he said, lies the products' legal status: drinking legally-sold cologne is safer than drinking its black market equivalent.

"It's better that a pensioner drinks hawthorn liqueur sold in pharmacies than a homemade version," he said.