Tear of a Komsomol Girl [cocktail recipe]
Lavender Toilet Water 15 g.
Verbena 15 g.
Herbal Lotion 30 g.
Nail Polish 2 g.
Mouthwash 150 g.
Lemon Soda 150 g.
—Venedikt Erofeev, Moscow to the End of the Line, trans. H.W. Tjalsma (New York: Taplinger, 1980), pp. 69–70
Government to Introduce Excise Taxes on Medicinal Tinctures to Combat Alcoholism
December 13, 2016
The government has proposed imposing excise taxes on medicinal tinctures, household chemicals, and cosmetics containing alcohol. The reason is that the populace consumes them instead of the expensive liquour sold in shops. As RBC has previously reported, approximately 10% of Russians suffer from drugstore alcoholism.
Prescribe and Report
The Finance Ministry has drafted amendments to existing laws and the Tax Code that would impose excise taxes on alcohol-based pharmaceutical products, except for vital and essential drugs (VEDs). The ministry was ordered to do this by Deputy Prime Minister Alexander Khloponin, who oversees the alcohol market. In late October, he reported on the matter to Prime Minister Dmitry Medvedev. RBC has a copy of his letter. A spokesperson for Khloponin refused to comment on the document’s authenticity or its contents.
Due to a drop in incomes and an increase in prices for strong alcoholic beverages, Russians have been increasingly been drinking alcohol-based liquids not intended for consumption, Khloponin argues in his proposal. Among such liquids, he lists Cucumber Lotion, Boyara (a tincture of hawthorn and rose hips), and Bread and Wheat, two alcohol-based additives. The sales of such products have recently increased in Tatarstan, Ufa, Samara, Cheboksary, Saransk, and Kaluga, according to the document.
Currently, the Tax Code does not deem alcohol-based medicines, veterinary drugs, food products, and cosmetics sold in packages containing 100 milliliters or less as excisable products.
Vadim Drobiz, former head of the Research Center for the Federal and Regional Alchohol Markets (TsIFFRA), told RBC that between twelve and fifteen million [i.e., approximately 10% of the Russian population] regularly consumes medical tinctures and cosmetic lotions not intended for consumption. The “parallel” alcohol market’s capacity already accounts for around 20% of the official market’s turnover, as RBC reported in an investigation published on November 24.
Khloponin has proposed labeling all alcohol-based non-food products as excisable and abolishing the zero-rate excise tax for certain brands of cosmetics and household chemicals. The rate of the excise duty should be the same as that imposed on strong alcoholic beverages. Currently, the excise rate on strong spirits is 500 rubles per one liter of pure alcohol.
The excise taxes should be extended to all alcohol-based medicines, except for medicines included in the VEDs list, writes Khloponin. In addition, the pharmaceutical market should apply the Unified State Automated Information System (EGAIS) for accounting for the production and turnover of alcohol to the distribution of ethanol intended for the production of medicines. According to current laws, the EGAIS will be introduced to the pharmaceutical market from 2017, but it will record only ethanol production.
Khloponin argues that retail sales of the flavor additives Bread and Wheat should be banned altogether. The regions also need to have the authority to independently monitor sales of alcohol-based non-food products.
The Finance Ministry did not respond to RBC’s inquiry. The Health Ministry informed us that as part of the fight against “drugstore alcoholism,” the ministry had drafted a federal law bill banning the sale of alcoholic pharmaceutical products from vending machines [see article, below].
Hospital Budgets and Pensions
If the Finance Ministry finalizes its undertaking, the public will suffer, Elena Nevolina, executive director of the National Pharmaceutical Chamber, noted in an interview with RBC. Many popular tinctures, such as valerian, Corvalol, Valocordin, and Votchal drops, are not included in the VEDs list. After excise taxes are imposed, their prices will skyrocket or they will simply vanish from the market, she argues. This might indirectly impact the work of ambulance brigades, since pensioners, accustomed to consuming certain medicines, will be more likely to summon ambulance crews if the medicines are unavailable, Nevolina believes.
Another alcohol-based medication not included in the VEDs list is Aseptol, a topical solution widely used by medical personnel to disinfect their hands. The retail price for 100 ml of the solution is currently around 35 rubles. After the excise duty is imposed, its price could double, believes Nevolina.
Although hospitals purchase Aseptol in large quantities, it amounts to less than 1% of all sales. According to research by the DSM Group, purchases of Aseptol amounted to 179 million rubles in 2014, 195 million rubles in 2015, and 171 million rubles in the first nine months of 2016. The public procurement market for Aseptol accounted only for 549,000 rubles, 820,000 bules, and 936,000 rubles of these total sales, respectively.
Based on an excise tax rate of 500 rubles per 1 liter of pure alcohol, the price of Corvalol would increase by one and half times, and the price of Carniland (Votchal’s drops) and Valocardin, by a few percent.
The measures proposed by the government will enable better monitoring of the pharmaceutical alcohol market, said Dmitry Dobrov, board chair of the Union of Alcohol Producers.
“EGAIS and excise taxes have proven effective in the alcohol market. Sales and tax revenue have been growing, and illegal production has practically disappeared,” he said.
Major Pharmaceutical Manufacturers of Alcohol-Based Drugs
The Industry and Trade Ministry supplied RBC with a list of the major manufacturers of alcohol-based medicinal products. The leaders in terms of sales and production are Gippokrat from Samara (whose 2015 revenue was 980 million rubles and overall production, 51.8 million units); Flora Kavkaza from Karachay-Cherkessia (230.9 million rubles; 13.4 million units); Begrif from Novosibirsk Region (211.7 million rubles; 10.9 million units), the Tula Pharmaceutical Factory (251.5 million rubles; 9.6 million units); and the Ivanovo Pharmaceutical Factory (138.1 million rubles; 7.5 million units).
The market for alcohol-based drugs has been growing from year to year. According to DSM Group, it amounted to 3 billion rubles in 2014, almost 4 billion rubles in 2015, and 3.1 billions rubles in the first nine months of 2016.
Boyara 24 Alcodispenser Shows Up at New Location in Izhevsk
Argumenty v Izhevske
October 15, 2016
Yet another dispenser for selling the alcohol-based Hawthorn (Boyaryshnik) liquid has been installed in Izhevsk. As Susanin News Agency reports, the 24-hour sales point, where even a child could shop, has been installed on January 9th Street.
For 20 rubles, the Boyara 24 machine dispenses a bottle of liquid containing 75% ethyl alcohol. Hawthorn Lotion for Oily Skin, as indicated on the label, is designed to cleanse and tone the skin.
But few locals used the alcohol-based liquid as it was intended. The dispenser’s target market is society’s drunken stratum. To obtain a bottle of Hawthorn, you merely have to drop money into a coin slot and turn a handle. The dispenser imposes no limits on the times when the liquid is sold or the age of purchasers. It does not even need electricity to run round the clock.
During an experiment conducted by a Susanin News Agency film crew and concerned citizens, it transpired that the alcodispenser did not work properly. Four attempts were made to purchase Hawthorn Lotion, but the machine dispensed bottles only in two instances. Empirically, therefore, we established that the dispenser sells the alcohol-based liquid for 40 rubles rather than 20.
The first such dispenser showed up in Mechanical Engineers Village approximately two weeks ago. It was successfully dismantled, most likely by penniless alcohol enthusiasts.
Translated by the Russian Reader. Photo of lavender toilet water courtesy of knigi-janzen.de