Russia on-track to classify beer as alcohol for first time

Russia on-track to classify beer as alcohol for first time

Russia's Parliament has backed a bill that will define beer as an alcoholic beverage for the first time, in a move that could prompt further sales restrictions for brewers.

Russia's State Duma passed the latest raft of proposals to restrict alcohol sales in a first reading this week. It means that beer is one step closer to being officially-listed as an alcoholic drink in the country.

If that happens, beer could be subject to similar sales restrictions as spirits. However, the Union of Russian Brewers is hopeful that beer will avoid some of the worst restrictions.

Alongside the move to reclassify beer, the current alcohol bill would also ban alcohol sales between the hours of 23:00 and 08:00 across Russia. Producers would also be banned from selling so-called long drinks, which excludes hard spirits, in packs of more than 330ml.

However, a Carlsberg spokesperson in Russia told just-drinks that the volume restriction would only apply to drinks of at least 7% abv and that beer has been exempted. Similarly, the night-time sales ban would only apply to beers of more than 5% abv. 

With two more readings to go in the Duma, there also remains time for amendments to the current bill.

Perhaps more seriously for brewers, it is also thought possible that alcohol could be banned from sporting events in Russia. Meanwhile, all alcoholic drinks producers may have to begin printing health warnings on labels.

In January this year, after the proposals emerged, analyst group Sanford Bernstein said that the new restrictions would be "most likely incrementally negative but not material for the beer industry". Brewers have spent the last year digesting a three-fold tax hike on beer in Russia.

Carlsberg said in its full-year results statement this week that it expects Russia's beer market to return to growth in 2011. The market should expand by between 2% and 4% in volume, said the group, which owns the country's leading brewer, Baltika Breweries.

[Updated on detail of volume restrictions. Restrictions could apply to drinks of at least 7%, not less than 7% abv].