LIMITING SALES OF LOW ALCOHOLIC PRODUCTS CAN HAVE ADVERSE CONSEQUENCES FOR THE SECTOR

FAS recommends regional authorities to take into account the developing economic situation when setting additional restrictions for sale of alcoholic beverages

At the beginning of April 2020, some regions of Russia introduced, in particular, limitations (or additional restrictions) for retail sale of alcoholic products in the midst of fighting propagation of the new coronavirus infection.

After such actions of Heads of the subjects of the Russian Federation, the Ministry of Industry and Trade of the Russia has recommended* that the order of selling alcoholic products established earlier in the regions of Russia should not change unless it is strictly necessary, since introduction of additional restrictions can provoke a growth of the share of black-market products and trigger serious social tensions.

At the same time, FAS continues receiving petitions from businesses about the facts of such restrictions in the regions of Russia, particularly, for retail sale of low-alcoholic products such as beer, beer-based beverages, cider, poiré and mead.

In FAS opinion, such actions can contain signs of violating the antimonopoly law, and results in several adverse social-and-economic consequences, including shrinking of the tax base in the regions, stimulating black-market sales of alcoholic products, and, therefore, triggering a growth of consumption of alcoholic substitute goods that can heavily damage health of consumers. Decreasing the number of trade outlets, in its turn, can result in breaching the social distancing regime.

Deputy Head of FAS Alexei Dotsenko pointed out: “Tightening the conditions of economic operations for legal, bona fide market participants can result in decreasing the number of small and medium businesses, particular, small breweries, for which beer stores are now the only sales channel after closure of restaurants and bars”.

Such actions are contrary to the efforts undertaken by the Government of the Russian Federation and executive bodies designed to support small and medium business.

In this context FAS recommends regional authorities to take a balanced approach to introducing various bans and limitations on the markets of alcohol products in order to prevent adverse consequences for the population and small and medium business.

Reference:

* № MD-23185/15 Letter of 03.04.2020