Russia reduced excise duties on vodka by 5 percent Thursday to help struggling domestic producers compete with a flood of imports, Itar-Tass said. New duties were set at 80 percent for vodka and 75 percent for other alcoholic drinks.


Itar-Tass said the reduction would raise profit levels at distilleries and translate into lower prices.


Under Russia's complicated procedures for calculating excise duties on domestically produced alcohol, a 5-percent cut in duties has a magnified impact on prices.


Industry experts say the price of vodka could drop by as much as 30 percent a bottle as a result of the excise duty decision.


Some industry lobbyists had called for a cut of 15 percent in the duties.


But Finance Ministry officials doubted whether losses to the budget from such a large reduction could be recouped through higher output.


Health officials also have voiced concern about Russia's problems with chronic alcoholism.