Arbitration Court confirmed legitimacy of the FAS decision on inadmissibility of prohibiting sale of certain types of alcohol products in the Arkhangelsk region

On 22nd January 2012, Moscow Arbitration Court pronounced legitimacy and justification of the position of the Federal Antimonopoly Service (FAS Russia) on inadmissibility of prohibiting retail sale of certain types of alcohol products in the Arkhangelsk region.

Earlier, on 20th August 2012, FAS found that the law of the Arkhangelsk region was contrary to the antimonopoly legislation. The law prohibited retail sale of alcoholic beverages the content of ethanol with 0.5% - 9% of finished products, wine beverages with the ethanol content at 1,5% - 9% of finished products, and beer-based beverages (beer drinks) in the Arkhangelsk region from 1st July 2012.

The case was initiated upon petitions of the National Association of Producers and Distributors of weak alcohol, “Moscow-Efes” Brewery” CJSC and “Tornado” Ltd.

Investigating the case, FAS established that the regional law prohibited retail sale of some types of alcohol products, circulation of which was authorized and which met mandatory government requirements and sanitary-and-epidemiological standards.

For instance, retail sale of beer drinks in the Arkhangelsk region is prohibited but beer, wine and distilled spirits can be sold.

FAS concluded that unreasonable prohibition of retail sale of certain types of alcohol products permitted for sale contradicted Part 1 Article 15 of the Federal Law “On Protection of Competition” and Sub-Clause “b” Clause 4 Article 15 of the Law on the fundamental principles of state regulation of trading activity in the Russian Federation.

In December 2012, members of the Arkhangelsk legislature reported drafting a new regional law, which eliminates the violations registered in the FAS decision. At the same time members of the legislature exercised their legitimate right to challenge the FAS decision at Court.