RUSSIA: Beer tax resistance ends in failure
Russia's Government has driven through its plan to triple excise tax on beer, despite fierce opposition from brewers.
Tax on beer rose by 200% on 1 January, following endorsement of the proposal from Russian president Dmitry Medvedev.
Despite mounting a strenuous campaign against the rise, including a warning of mass job losses, multi-national brewers have been forced to accept the decision.
"We still think it was a wrong decision to increase the excise by 200%, but after the President signed the law our campaign has stopped," a spokesperson for Carlsberg told just-drinks today (5 January).
Carlsberg's Baltic Beverages Holdings subsidiary owns Russia's largest brewer, Baltika Breweries, which accounts for around 40% of the beer market.
Last month, Carlsberg reported stockpiling by distributors in Russia looking to beat the tax rise. The brewer estimated that Russia's beer market would shrink by around a tenth in volume in 2010.
But Carlsberg's CEO, Jorgen Buhl Rasmussen, said that the Denmark-based brewer remains committed to Russia. "We still believe that medium- to long-term this is going to be a growth market," he said.
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