Actuality August, 31, 2007

Wine-makers and importers of wine

can soon get free rein from USAIS. The wine market is expecting another relaxation of restrictions. Due to bill introduced to the State Duma it will be possible to play on the wine market according to the rules almost as simple as at the beer market.

At the beginning of the week deputies introduced the bill, aimed to add one more stroke to the far too bright picture of the state alcoholic beverage market regulation. However, this time it is not tightening the screws, but some kind of relaxation of restrictions. It is offered to “rehabilitate” import and wine production, take off the contro l of USAIS. It concerns table light wines.

Wine producers will not have to equip enterprises with USAIS counters, importers will have the possibility to avoid formalities and delays connected

with the work of system. Besides, the authors of the bill suggest to reduce the cost of licenses for production, storage and deliveries of wine materials and table wine from 250 to 30 thousand rubles, and also to equate wine as the advertising object with beer. Other novelties are the following: territorial licensing is introduced, classification of wines of the Russian production is determined, the multiple-stage grape production inspection system will be created. If the bill draft is accepted, it will come into effect on January, 1st, 2008.

The development of new bill was initiated by Russia’s Ministry of Economic Development and Trade, the Ministry of Agriculture

and the Kuban wine-makers. The chairman of the State Duma committee on economic policy, enterprise and tourism Eugeniy Fedorov is sure, th at the bill will do wine-m akers and wine dealers, small-scale and large-scale enterprises, small and branch major concerns a good turn.

According to his words, the rules of production and sale of wine products “are considerably simplified” in comparison with those which work

in relation to alcohol-containing production. However, in spite of the accepting by experts and market participants new rules, they did not fail to express concern: say, if the state loses its grip, those who glue documentary stamps on bottled in basements slops will liven up.

The bill may become more stringent after the second reading.

Getting freedom from USAIS control may become a real business catalyst for importers of wine.

It will be recalled that, that 85 % of the wine market are “covered” by them. One of co-authors of the project, the deputy of “United Russia”, Elena Panina said, “The Russian wine is not almost produced, there even no vineyards remained, that’s why the importers of wines of 8,5 to 15% strength will have to follow the bill”. The dynamics of wines importation to the country is in 2004 230 million liters, in 2005 277 million, in 2006 190 million, in January-July, 2007 105 million (according to the National Union of Wine and Spirits Producers and Distributors NO “SUAR”).

The costs connected with the work of USAIS, bureaucratic obstacles and technical difficulties resulted in reduction of wine import volumes (without mentioning the prohibition of Moldavian wine deliveries). Aleksey Suschev, the head of External Economic Activity (EEA) department of company “Amphora”, is sure, that first of all the mobility of work of importers will increase, “After all what happens now

? Before to deliver an alcohol lot, it is necessary to introduce certification, copyright codes etc. The whole process takes about 10 days — two weeks at the best, and at the worst one month. So we should win at mobility”. But in his opinion the abolition of USAIS will not influence the price-level; price policy has its own laws.

And as to possible increase of volumes of counterfeit production, Aleksey Suschev doesn’t see the connection between USAIS and the quantity of infringing goods, “Initially, as I understand, USAIS w as developed for protection from infringing goods, however, it failed. In fact, in order to ensure the complete control over the alcohol market it is necessary to supervise everything, up to the shops.

And after all documentary stamps can be easily falsified.

We are given documentary stamps at the customs office, we sell a lot to a distributor, and it goes to the shop …”

At the same time the head of information department of NO “SUAR” Vadim Drobiz said, that USAIS “nevertheless ensures the control of wine turnover”. Also he noted that the share of illegal production on the alcoholic market makes already not less than 30 %. However, will it be possible to solve this problem by methods of administrative control ?