The State Duma on Friday cleared in a first reading a bill that would triple duties on beer, a move the government hopes will help plug a budget deficit but that brewers fear could lead to factory shutdowns.
The bill was approved by a majority of 315 votes in the 450-member chamber to include amendments to the Tax Code increasing the duty 9 rubles per liter, from the current 3 rubles. The bill implies that the duties will rise to 10 rubles from Jan. 1, 2011, and to 12 rubles from Jan. 1, 2012, for beer with an alcohol content of between 0.5 percent and 9 percent.
Officials have said the changes will bring in an extra 65 billion rubles ($2.24 billion) of budget revenue in 2010. The federal budget is expected to run a deficit of 6.8 percent of GDP next year, or around 3 trillion rubles.
The proposed increase “is bad news,” Heineken CEO Jean-Francois van Boxmeer said Friday. “It’s a fierce increase at once. Will it have an impact on consumption and volume? Yes.”
The shares of Danish brewer Carlsberg, which owns Russia’s largest brewer, Baltika, have regularly fallen in the past months on news from Russia alongside the shares of SabMiller and Heineken.
Carlsberg has said it could shut down some factories and that higher duties could cost Russia some 100,000 jobs.
(Reuters, Bloomberg)