Licensed vodka production in Russia fell by 28.3% in the first half of this year, while the black market is growing, according to local reports.

The figures on legal production, released by the Russian Government's State Statistics Service yesterday (17 July) and reported by RIA Novosti, come after the authorities introduced a rolling increase on the defacto minimum price of vodka in 2011. Russian research centre Cifrra warned at the time that the move would benefit illegal producers.

The first tax rise came in January 2012 up to RUB254 (US$7.83) per litre, with the tax level set to reach RUB400 by next year. 

Vadim Dobris, director of Cifrra was reported as saying this week that he expects licensed vodka sales to fall by 10% this year. 

The CEO of Organic Vodka Group, Sergei Kleshchukov, told RIA Novosti that he anticipates that legal vodka production would fall by 25% this year.

“The main fall is observed in the so-called ‘popular product’ segment, where vodka costs RUB170 to RUB200 ,” he reportedly said. “The other segments are not falling, whereas the premium segment is even rising.”