Russian Government mulls beer sales restrictions - report

Russian Government mulls beer sales restrictions - report

Brewers in Russia could find sales hit by a fresh wave of regulation if proposals in the country's state parliament are approved.

The country's Duma will spend the next few months debating whether beer should be subject to a range of new sales restrictions, according to a report in Moscow News. Beer could be officially recognised as an alcoholic beverage in the country, which would also make it subject to the same regulations as spirits, the report said.

Russia's largest brewer, Carlsberg-owned Baltika Breweries, could not be immediately reached for comment on the proposals. However, Trevor Stirling, an analyst for Sanford Bernstein, said in a note today (14 January) that Carlsberg has confirmed that the newspaper report is broadly accurate. 

If passed, the proposals would add to the pressure on Russia's beer market, which is expected to show a decline of high single digits in 2010 following the Government's three-fold increase in beer duty tax 12 months ago.

A plan to limit the size of beer cans and bottles in Russia is potentially one of the most damaging proposals, said Stirling. According to Moscow News, the Government may limit can sizes to 33cl, compared to the popular 50cl size currently on sale. There has been speculation that this might only apply to RTDs, however.

Stirling said a limit on beer pack sizes would cause a "huge operational headache" for suppliers and that brewers' sales and margins would be threatened by the increased cost of beer per litre.

But, Stirling added that most of the proposed measures are "most likely incrementally negative but not material for the beer industry".

Russian ministers are also reportedly considering extending a night-time sales ban on alcohol across the country after successful trials in Moscow. Alcohol could also be banned from sporting events, a move that may jeopardise brewers' ability to profit from the FIFA World Cup in 2018.

The beer industry is already lobbying to prevent a ban on sales of beer at more than 5% abv at Russia's street kiosks. A spokesperson for Carlsberg told just-drinks in November last year that the industry was lobbying politicians in an attempt to fend off the ban. "Brewers will take part in this process and we will try to convince legislators not to align beer with spirits legislation," he said.