The Vodka Report - Russia and Ukraine

Head of the Union of Alcohol Producers, Dmitry Dobrov, has the same opinion. He says: “The largest alcohol companies believe that in 2015 growth in sales of legal products can be up to 10% due to the reduction of the price difference with the illegal vodka. 

“If legal vodka producers are able to keep the prices at the current level their sales will go up.”

However, the representative of the Siberian Alcohol Group does not expect significant sales growth in 2015. “This year will be difficult for the economy and the population is not ready for the price of legal products on the shelf,” says a spokesperson for the service. 

Ukraine hopes for the best

Representatives of Ukraine’s largest vodka holding company, Bayadera Group, also hopes for the best in 2015, but admits that the situation in the country’s market remains complicated. 

“We have not a simple, but very important year,” says the company’s head, Sergei Velichko. 

“We hope the market will stabilise and the fall of sales will be stopped. The main condition for that is that the excise tax should not be raised, because the level of prices today is already excessive for consumers.

“If the state decides to further increase the excise duties, it is obvious that the market will collapse even further. A further increase in excise duties could be disastrous for the majority of domestic enterprises.”

Velichko adds: “Last year was very difficult and we can hardly expect an increase in the purchasing power of the population. Most likely, it will remain at the same level or even decrease. The price of alcohol this year will continue to rise despite the changes in the excise rate, due to a significant devaluation of the Hryvnia. 

“Almost all enterprises are affected by the changes of the exchange rate of the currency.

“The glass industry has also raised the price of its products. Taking into account all these factors, the margin today is on the verge of zero for all vodka producers,” Velichko concludes.