Weekly analytical column of Vadim Drobiz
Week April, 11 2016 – April, 17 2016
Vadim Drobiz – Head of the Center for Federal and Regional Alcohol Market Research (CFRAMR)
The most quoted in the Russian media expert on the alcohol market of Russia, former Soviet republics and Eastern Europe. The latest news, detailed analysis, commentary, statistical databases on the alcohol market since 2002.
Full versions of the materials published in Russian on the website Vadim Drobiz http://cifrra.info/
The benefits and harms. What more?
For one of the Russian TV channels I have prepared material on the anti-alcohol campaigns in the world in general and the Soviet campaign period 1985 – 1990 years. From my point of view, all that is written about this in the Russian media and say officials mostly lies and myths.
I believe that illiterate anti-alcohol campaign (ААС), based on the prohibitions and restrictions, meaningless, stupid and destructive. They are in this case are means of PR interest groups of persons, or carried out in order to cover a certain other planned events, objectives, reform, the corporate interests of the public and state medical organizations …
- International ААС
– the positive experience of AAC there is no and was not. It is impossible to change something only prohibitions and restrictions in any country of the world. Without fail they must be accompanied by a dramatic improvement in the level and quality of life. Without this, usually, in the course of the AAC, and after its completion predominate adverse side effects, which even at the beginning did not expect.
- Historical facts
– it is useful to remember that the basis for the beginning of the liberation struggles of the future United States from Britain were high taxes on alcohol in the 17th century.
– Prohibition in the United States in the first third of the 20th century has led only to negative consequences: repeatedly increased production of illegal alcohol; there was a total criminalization of State institutions and society (Hollywood on this subject took a lot of pictures); Mafia flourishing (especially Italian), home moonshining; there was a flowering of addiction etc. Published data show that with the introduction of Prohibition in the United States real serious reduction in alcohol consumption, taking into account illegal production, has not occurred.
– the later period: the last 30 years, Finland and Sweden live on anti-alcoholic recommendations of the World Health Organization. The result – only negative consequences. Alcoholism in the two countries officially grown at times among adults and adolescents. This does not save even a state monopoly on the retail sale of alcohol. In fact, in Sweden and Finland there is a massive moonshining, the purchase and importation of alcoholic drinks from neighboring countries, especially the Baltic, Russia and Belarus. Finnish tourists, for example, bought in 2014- 2015 and imported to their country for more than 30% of all alcohol sold in retail trade in Estonia.
– in any country with European culture (they include and Russia, despite that Russian authorities say about “turn to the East”), not to come up with the local authorities from Prohibition to semi-dry, or what else, 80% of the adult population (the most energetic, socially and economically active, educated, healthy, etc.) consume alcohol. It was, is and will be. Of this amount, not more than 10% -15% alcohol abuse.
3. Russia and the world today:
– In 2013 it was officially recognized that alcohol consumption in the EU and in Russia on average equal to 12.5 liters of pure alcohol per capita per year. Of course, different countries have different culture consumption, consumption patterns, drinks themselves, their quality, but the volume is approximately the same. With regard to the set of the WHO threshold of 8 liters of alcohol per capita per year, after which begins the alleged degradation of the nation, the country with European culture have a minimum of 120 years consumption per capita accounts for about 10-12 liters. So WHO already in 2015 raised the question of increasing the set threshold from 8 to 10 liters. With the same amount of consumption in the 12-12.5 liters of alcohol per year alcohol drinks in Russia today is 8-10 times more expensive relatively, than in EU countries and North America. Example: on unemployment benefit in the US, the EU and other developed countries resident can buy more than 200 bottles of legal strong alcohol. On unemployment benefit in Russia – 20 bottles (10 times smaller!); on minimum wage – 30 bottles; on the normal (by Russian standards) wages in the region- 70 bottles of legal vodka.
From this involuntarily raises two questions:
– why Westerners are not drowned in alcohol at such its availability? Simply population of all countries consume alcohol to its limits – physical, financial, cultural, religious, medical, customs, etc.
– why Western governments allow for such a low price and availability of alcohol? In my opinion, they well aware that much more expensive and more difficult to deal with the social and health consequences of use and abuse populations of illegal and surrogate products than with the same, but from a legal factory production. In Russia today 65% of spirits – is illegal and the surrogate products. Over 50% of the volume of alcohol sold outside the legal official retail.
4. Russian history
– in Russia has always drank a lot (the last 300 years at least), but had never been very drunk country in the world. Just Russian drunkenness due to poverty of the population has always been at the household level “ugly”, unattractive and uncomfortable, way to release the “steam” dissatisfaction with their lives. For a long time, the population of Western countries prefer to drink alcohol in the bars, cafes, restaurants (there are drunk alcohol 40%), while in Russia only 3%, and mostly Russians drink on the street, in parks, on a picnic, etc. For 70% of the Russians too expensive to go to bars and restaurants.
– 19th century – the heyday of alcoholism in Russia. In archives can be found information that more than 50% of children in the late 19th and early 20th century have been drinking alcohol. In 1861, the abolition of serfdom – 20 million people of the 60 million population of Russia become free but left without money and property – and most of them with grief and despair began to drink.
– it is a complete lie about the “temperance riots” in Russia, which took place in the second half of the 19th century. These were the revolts of the population for reducing prices for vodka! False assertion that Russian was a sober country in the 18-19 centuries and the beginning of the 20th century only reduces the importance and complexity of the problem of alcohol abuse in Russia.
– has not been in Russia 4 liters of alcohol per capita in 1905, as claimed by the official statistics, simply because while there was virtually no social statistics. While 90% of the population lived in rural areas and to collect any statistical data it was simply impossible. Because of excessive alcohol consumption in Russia in 1914 introduced a dry law. It was abolished the Soviet government after the Revolution: according to official data each year were seized up to 1 million moonshine devices in the country. It was therefore decided surrogate, artisanal products to replace with the state quality factory production. From this product the government began to receive excise duties.
– in 1950 – 1980 years in the Soviet Union formed a reasonable structure of consumption of alcohol – “wine-vodka”, to which today are moving spirits markets in different countries: 10 liters of spirits per year per capita, 27 liters of wine products and 24 liters of beer. From moonshine-vodka country after World War II the Soviet Union has become a country with a culture of wine consumption. This prevailing consumption pattern began to break down of the reforms since 1985.
5. The anti-alcohol campaign of 1985- 1990 years
Particularly strong reasons for starting the company was not. Alcohol consumption in Russia at that time was at the level of any European country. Once in power, Mikhail Gorbachev decided to start with reforms. For more political effect decided to start with the anti-alcohol campaign. Though actually needed economic reforms. On the significance at that time alcohol problem was in 10th place. In fact, this campaign was needed to cover the ideological, political, social and economic reforms. Similarly, the anti-alcohol campaign in 2008- 2015 years in Russia was necessary as a screen for carrying out administrative and fiscal reforms in the alcohol market in the years 2010- 2016.
In 1985, with the help of a campaign, created an artificial shortage of legal factory quality alcohol. The main thing what experienced a large part of the population – a deep sense of humiliation from action of the power – all admitted alcoholics! On vodka were introduced stamps, there were long queues for it, have been actively promoted nonalcoholic weddings, holidays, birthdays, etc. But alcohol abuse does not exceed 15% of the population!
Any anti-alcohol campaign ostensibly aimed at reducing consumption. But if 65% -70% of the adult population of the country moderate consumers, they don’t care about the campaign. It only creates inconvenience to which people adapt quickly. Even more, it is indifferent to drunks – they go straight to the surrogates.
6. Impact of anti-alcohol campaigns:
– anti-alcohol campaign can not be carried out in European countries in the period of serious social and economic reforms. It always acts destructively.
– implementation of any restrictive measures on alcohol consumption can not be separated from the general socio-economic policy of country. In Gorbachev’s time appeared many hopes, older people do not want to die so great was during this period the belief in a bright and happy future of the country. People wanted changes. That is what caused the fall of mortality at that time, but not the results of a semi-dry law. Today, it seems strange, but it was …
– Prohibition did not destroy the Soviet Union: in the period of its existence the alcohol brought into the treasury 5%-6% of revenue, after the anti-alcohol measures of Gorbachev was 3%, this does not destroy the economy!
– real reduction of alcohol consumption did not happen, although the official production fell by 2 times. All was immediately replaced by a surrogate, artisanal products. Even I, almost teetotal man, at that time had always at home 3-4 jars (3 liters each) of house wine. And basically everywhere was moonshining. As a result:
– criminalization of society and the population in the presence of powerful illegal production.
– flowering of addiction … In the USSR this problem almost unknown until 1985 …
– the destruction of reasonable patterns of wine and vodka consumption. It began refuse of wine consumption. A significant role played the effects of economic reforms: a sharp decline in the level and quality of life, falling incomes, total deficit of all.
– formation of hatred among the population to state institutions of power, a sense of moral humiliation and resentment of the fact that normal people have taken away the right to make own decision to drink or not, to decide the rate of drinking, etc.
– in Russia today as a result of ill-considered and sometimes just silly alcohol and anti-alcohol policy have created a most unpleasant phenomenon that has become unaffordable for the majority of population the factory legal alcohol, which immediately led to a sharp increase in the volume of illegally-surrogate alcohol sold out legitimate retailers in the volume more than 1 billion liters per year, which is buy no less than 20 million people in the country.
7. Positive experience of anti-alcohol campaigns:
A positive experience in reducing alcohol abuse is still accumulated in Western Europe in the second half of the 20th century. This occurred for the following reasons:
– by increasing the level of quality of life, medicine, income, care about their health, etc.;
– change the nature of work: people with street work began to move en masse to offices;
– motorization of the population, fear of losing a driver’s license if caught driving drunk;
– the population had other interests. Due to the fact that alcohol in Western countries is cheap (relative to wages), for food and drinks the inhabitants of these countries spend 10% -15% of their income, while 65% of Russia population spends more than 50% of their income. Therefore, the citizens of Western countries have the opportunity to buy something else, to go traveling, has fun, relax, etc. The development of any state and society depends on the availability of public money not only for food and drinks, but also everything else that moves the economy and developing business in these countries!
8. It is necessary to say that …
All the anti-alcohol campaign in the past 120 years in different countries of the European culture led to the same result – increase in drug consumption.
The fall in beer consumption in Russia: causes and consequences
Now Russian media talk a lot about what the Russians reduce the consumption of beer. If they drank 11.5 billion liters of intoxicating drink in 2007, then in 2015, – about 8.2 billion liters, and in the coming year, this trend has continued to decline in consumption. Loss of consumer has a negative impact on the market, since almost the entire volume of beer, produced in Russia, sold here. A capacity to move quickly to the export the majority of brewers have not.
Since the beginning of this year, the American company Cargill stopped the work of one of the largest producers of malt in Russia. Other such enterprises are also not loaded in full. The reason for this was the fall in demand for malt, which experts link with the fall of the beer market. The beer market, in turn, suffers from strict regulation: aggressive excise policy of the state, a ban on advertising, restrictions on beer sales places, threats ban the use of plastic packaging and the introduction on 1 January 2016 in wholesale sector of the automated system of state control over the volume of production and turnover of ethyl alcohol and alcohol-containing products. Another important reason – the general economic crisis in the country.
In my opinion, the main cause of all the present troubles of Brewers – demography. In the 1990s, the birth rate in Russia has plummeted, and until 2002 the country’s children were born in two times less than in previous years. And young people start consume beer at about 17-18 years (in Russia it is permissible age). Here since 2007, when the beer began to consume the first representatives of this not numerous generation, began reducing the consumption of beer.
This trend will be guaranteed to last at least until 2020, independently of all other causes. The new beer consumers becomes potentially half, and on the other hand, people exit from this market in the previous amounts at a certain age – after 55 the Russian men almost do not drink beer. So that is a very significant demographic reduction of the beer market.
Similar processes occur in other sectors of the alcoholic drinks. On the wine market in Russia there is observed a drop from about 2011-2012. Backlog of beer due to the fact that the primary audience of wine in the country are women. They are more or less actively begin to drink wine in an average of 21-22 years. As for spirits, there is a demographic crisis will begin in 2017-2018, respectively. Young people, whatever drinks they drank up to 27-28 years, still come eventually to the strong alcohol.
In addition to the problems of demography Russian beer market is currently characterized by two important circumstances. The first – a gradual shift from the “pedestal” Western beer companies. Five multinational holding companies have come to the Russian market in 1995 and by 2007 it occupied 92%, leaving only 8% to local. But then they began to give ground, and by the end of last year they accounted for already 73% of the market. It is the Western companies had major drop in production – in the last five years, they closed about 12 plants in Russia. And two years later, I think, they will have less than 70% of the beer market in Russia.
This is partly the reason in the second trend – the development of crafting brewing. This are small brewery, which makes beer in small quantities for unique recipes. All are basically Russian. By the way, Russian brewers are increasing production in the face of the current ban beer advertising. I want to note that the usual advertising stimulates consumption of a particular brand of beer but not in general beer consumption.
Western companies think that Russia will become a conditional Czech Republic or Germany, where population drink 120-130 liters of beer per capita per year. It will not work in Russia. In our country, there is also no a direct relationship between the consumption of beer and spirits. Reduction of consumption of one is not at the same time to increase the consumption of another. It is worth recalling that in the Soviet Union and after its collapse no one took the beer as an alcoholic beverage. In 1995, beer consumption was 15 liters per capita per year. When came to the Russian market Western companies for a period 12 years this figure increased to 81 liters per capita. At the same time the market of low-alcoholic beverages was established. It seemed that in these conditions the consumption of vodka and its surrogates, as well as other alcohol drinks had to fall sharply, but nothing happened. From this I conclude that in Russia is no exist relationship between beer and spirits. It is only in the minds of western brewers, operating in Russia, which is necessary to justify the market decline. But they are the true reasons prefer not to mention.
But, as for the market of low-alcoholic beverages, it is practically in Russia no longer exists, because he has fallen in four times over the last ten years, and it was destroyed by Russian laws.
Hangover means no more popular in Russia?
I recently got a call from the office of one of the leading Russian newspapers (“Vedomosti”) with a request to give clarification: it was found another “crisis” in Russia – there was a sharp drop in the import sector, the production and sales of remedy of hangover. They asked: “If this is due to the general decline in alcohol consumption in Russia?” I had to reassure journalists:
– such hangover remedy bought before the country’s middle class, apparently forgetting under pressure of advertising superiority over them classic domestic remedies – cucumber and cabbage brines. It is historically Russian, native and the most effective remedy for a morning hangover, and most importantly – cheap! So this is a vivid example of effective import substitution by native product!
– but more importantly it seems to me a complete rejection of such means in order to survive the next round of the socio-economic crisis in the country, in which we ourselves were driven in 2014. What is the point in remedy of hangover? Why leave the pleasant euphoric state of mind and body when there are so many problems and hardships? Being constantly in lightweight intoxication can be easier to survive the crisis! (Just kidding).
– and finally: beer, in principle, previously perceived in Russia as an active hangover drink, but the drop, experienced by the beer market in 7-8 years, says the loss of the product even such a primitive and useful properties. And maybe that’s the reason the beer market decline in the country? (Again, just kidding!)
– by the way, in medical journals are increasingly repeated that morning sex is recommended as an effective hangover remedy! If this is true, then we will wait for boomers explosion in our country. In the evening drinking in Russia is still a lot, and in the morning from this bad headache!
Note: One of the causes of poor health during a hangover – improper fluid shifts in the body: in vessels liquid is not enough, and in the tissues – excess. Properly distribute the liquid helps to drink plenty. But before drinking water, it is desirable to make up a stock salt-electrolytes, for example, drink a glass of brine of cabbage or cucumber. But need to remember that a drink should be a brine, not marinade. The dose should be small – not more than glass.
Brine is a mixture of water and salt used to preserve or season vegetables, fruits, fish and meat in a process known as brining. In Russian cuisine the leftover brine, called rassol, has a number of culinary uses, e.g., for shchi, rassolnik, solyanka. Rassol, especially cucumber rassol, or sauerkraut rassol, is also a favorite traditional remedy against morning hangover.
Loyalty to the brand
We are trying to live in a free, democratic market… How many beautiful names and terms presented us with marketing in recent years. Among them is such a thing as lifetime of brand. It can be different. In Russia, one can count several types of alcoholic brands live long enough:
– strong foreign premium – they live a long time. It’s all easy to explain – an age-old loyalty: if on the status is necessary to drink these distillates – then they need to drink in spite of the price of the product: just like Johnnie Walker whiskey and Vodka Absolut;
– wine imported luxury brands – it is for dudes and aesthetes, experiencing their own superiority over the rest of the consumers. Due to them, even at such exorbitant prices for such wine from advertising and activities of the various ambassadors brands in the world, such brands also live for a long time;
– mass wine cheap foreign brands – they are in the Russian market is becoming less and less. In this regard, it can be claim that their lifespan is coming to an end.
– russian wine brands – actually just formed. But at the hearing. Perhaps they have a great future, but only time will tell…
– russian cognac brands – as long as everything is very vague, but let them be all right;
– russian beer brands – it’s just the murder of country’s population with advertising. In recent years, much lose their consumer audience.
– brands of the former republics of the Soviet Union – for example, the Moldovan cognac “White Stork”, Armenian cognac “Ararat”, Georgian wine “Kindzmarauli” and “Apsny” etc. Oddly enough, these brands are still live, but mostly among the elderly. Youth knows them a little.
– old Soviet vodka brands – there are constant litigation between Russian businessman Yuri Shefler, owner of SPI (Spirits International), and the state enterprise “Souzplodoimport” per brand “Stolichnaya” and others. Its brands with a long history and popularity among the Russian pipple.
– new Russian vodka brands of the past 20 years. The list of the main ones is presented in the table below.
Market shares of major Russian vodka brands on the volume of products sold (in%)
|Brands||January – November 2014||January – November 2015|
|In total||26%||27,6 %|
The figures show that the proportion of factory vodka brands on the Russian alcohol market market falls. There has been a significant increase in moonshining. It seems to many almost a blessing: it is safer for health, and cheaper for purse. In Russia, there are moonshiners festivals. In stores are bought at great speed moonshine apparatus. Just a little bit – and it will get the scope of the industry, when those who are now do for themselves, will start producing it for sale. This could end very badly for the country!