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The Russian Brewers Union has appealed to the Government to request further measures to protect small and medium-scale brewing businesses in Russia. The main threat to the sector, according to the Union, is the existing taxation regime. A letter addressed to the Cabinet of Ministers has requested the amendment of the current taxation.

According to the State Statistics Committee there are 310 major Russian brewers, out of which 30 are big companies with capacity over 60 million litres. The left 280 brewers are small and medium-scale businesses. The latter are mostly exposed to the shortcomings of the federal policy in the small business sector, according to the Union Executive Director Vyacheslav Mamontov.

"That is why the Russian Brewers Union has requested the Government put the small and medium-scale businesses under a simplified taxation regime. Nowadays, simplified taxation procedures are applicable to businesses with annual turnover RUB15m and staff of not more than 100 employees. Many brewers are not entitled to the simplified taxation procedures as they fall under excise goods producers category.

The Russian Brewers Union also requested that the Cabinet of Ministers fix the excise rate for 2004-2005 at the same rate as this year. Last year the excise imposable on the most popular brands (0.5% to 8.6% alcohol) was RUB1.12 per litre. As from this year the excise has been hiked by 25%, and the brewers are arguing that, "such an excise policy implemented by the Government is a restraint for investors in the sector, and rather targets elution of turnover assets from producers," a press release from the Union said.

"The Russian Brewers Union proposes a different excise rate system to be introduced depending on business capacity and sales. The request also stipulates details: if a brewer's capacity is over 60 million litres (the majors) the excise should be 100%; if a brewer's capacity is 40 – 60 million litres the excise should be 75%; if a brewer's capacity is 20-40 million litres the excise should be 60%; 10 – 20 million litres - 50% and less than 10 million litres - 40% excise accordingly.


20 February, 2003