Until recently, beer has not been considered an alcoholic
beverage in need of strict regulation, allowing it to gain market
share across Russia, with sales supplanting bottled water and
juice. The dynamic Russian beer market consequently attracted many
large beer producers to Russia. However, recent amendments to the
law have reclassified beer as an alcoholic beverage, which may
significantly affect the market.
Federal Law No. 218-FZ of July 18, 2011 "On the Amendments
to the Federal Law on the State Regulation of Production and
Circulation of Ethyl Alcohol, Alcoholic and Alcohol-Containing
Products and Individual Legislative Acts of the Russian Federation
and Invalidation of the Federal Law on Restrictions of Retail Sale
and Consumption (Drinking) of Beer and Drinks Made on Its
Basis" (the "Alcohol Amendment Law") came into
effect on July 22, 2011, except for several provisions that will
gradually come into effect on January 1, 2012, July 1, 2012 and
January 1, 2013. The Law was prepared as part of the state's
policy to curb alcohol abuse and prevent alcoholism.
Under the provisions of the Alcohol Amendment Law, beer and
beverages produced on the basis of beer (the "Malt
Beverages") are now classified in the same category as
alcoholic beverages and fall within the scope of Federal Law No.
171-FZ, dated November 22, 1995 "On State Regulation of
Production and Circulation of Ethyl Alcohol, Alcoholic and
Alcohol-Containing Products" (the "Alcohol
In accordance with the Alcohol Amendment Law, the sale of
alcoholic beverages is prohibited at petrol stations; wholesale and
retail markets; all public transportation stations, which includes
railway stations and airports (except for duty-free shops); and
other public places determined by the Russian government, including
areas surrounding these locations.
Based on the Alcohol Amendment Law, in order to obtain a license
for the retail sale of alcoholic beverages, the applicant must
submit documents confirming title, the full right of use, the
operational right, or a leasehold right (based on a lease agreement
for the term of one year or more) of a stationary trading space and
warehouse with the licensing authority.
According to the Alcohol Amendment Law, it is prohibited to
consume alcoholic beverages in and/or near and around:
children's, educational, medical and sports facilities,
including the surrounding area;
mobile retail outlets; and
other public places, including courtyards, parks, squares,
beaches, etc., except for catered public events.
Consumption (drinking) of alcoholic beverages by minors (under
18 years old) is also prohibited.
Once the Alcohol Amendment Law comes into force it is expected
to stabilize alcohol production, sale and consumption in Russia.
The focus of the Alcohol Amendment Law is to increase the oversight
over the economic interests of consumers; control production and
sale (wholesale and retail sale) of alcoholic products in Russia;
increase the quality of the alcohol products produced, including
beer and related (malted) drinks; decrease the sale of counterfeit
alcohol; and decrease alcohol consumption, which is currently
approximately 11.7 liters per head (for liquor) and 71.2 liters per
head for beer.1
1. U.S.-Russia Business Council Daily Update, August 19,
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