The Last Exile

The Moscow Times is reporting that Brewers in the Russian Motherland are asking him for a re-think on the beer tax which is set to triple:

A letter sent to Putin by the Russian Beer Producers Union suggested raising the tax gradually over the next three to five years. The Finance Ministry proposes increasing the beer tax to 9 rubles ($0.29) a liter next year from 3 rubles, said Vyacheslav Mamontov, the union’s executive director.

“This is the worst option for the industry, which would lead to a decline in beer production of 40 percent to 50 percent,” Mamontov said. The union proposed raising the tax by 5 percent to 10 percent from the originally announced 3.30 rubles a liter for 2010, he added.

Russian beer sales increased 15 percent to 458.4 billion rubles last year as higher prices outweighed the first decline in output since 1996, the union said in March. Sales growth will slow to 4 percent in rubles this year as consumers spend less and switch to cheaper local brands, Renaissance Capital investment bank forecast on March 2. Tripling the beer tax would lead to as many as 90,000 job losses because beer production would decline, the union said in the statement, citing estimates by unidentified experts.

Ordinary Russians may or may not behind the Brewers efforts, but if it was vodka, I bet there would be riots in the streets, which means, overall it was a rather shrewd move for Putin.