Criminal cases against brewers. Everything is legal. (2014-10-21)

At the beginning of October 2013 our Union informed representatives of the Russian brewing business of the fact that a wish to earn money, avoiding excise taxes is fraught with consequences…

“Even today, prepare for checking of production capacity figures, given to the Federal Alcohol Market Regulatory Service, equipment inspection etc”.

“The time of plant shutdown, institution of a criminal proceeding for tax default, uninformedness, personal foolishness and “hope for a miracle” is nearing”.

“It is rather surprising that several of you are planning to settle the issue of “survival”, not paying excises, developing shadow beer markets in the country. Do you really think that this question will be neglected by the State Government Bodies? May rest assured that the point of the shadow beer market has been already in process”.

“We often mentioned the fact of increasing of shadow beer market in our analytical notes. For obvious reasons transnational brewing companies can’t be accused of tax default. But we can predict what will be happened after studying data of the Federal State Statistics Service by the market regulator”.

So as to appraise the seriousness of the situation do you need plant shutdown and institution of a criminal proceeding for tax default?

But according to the informed source, not all participants drew a conclusion.

According to the mass media, there are many criminal cases. We hope that these examples will be instructive for others.

By the way, earlier we thought that illegal beer marker was created only by Russian independent brewing companies

“However, we’d like to warn the representatives of the Russian independent brewing industry against early “Dizziness from Success”. Under external reasons it’s impossible to accuse transnational companies of default in excise duties payment and negative response of the government for appearing the “beer shadow market” will be directed to Russian independent brewing companies and now we have information that there is more in it than meets the eye”.

It is clear that owners of transnational brewing companies assert that all beer produced in Russia is legal and all taxes are paid but they forget that these companies are led by hired Russian managers that are highly interested in production of “not taken into account volumes” from so called “surplus raw materials”. They sell it and put money into the pocket.

10 billion rubles or almost 10% from so called “beer” excise taxes – the share of the shadow beer market in Russia. So, the reaction of the market regulator and public bodies will be strong.

We’ve already told that, at present, the Federal Service for Alcohol Market Regulations is tied by the leg: ”The market regulator has no opportunities to perform his direct functions without introduction of licensing; in our case – how can the market regulator influence on a careless brewer? To bring to account for doubtful declaring – a penalty charge 40.000 rub., and for production of low quality goods (breach of requirements of the technical rules), a maximum penalty in case of provenpersonnel injury – 1.000.000 rub”. But soon the power of the market regulator will be broaden and law enforcement bodies will support the Federal Service for Alcohol Market Regulation.      

Who is at fault and what can we do?

Unfortunately, we have to state – we stroke a warning note.

It bears reminding that by order of the Deputy Chairman of the Government of the RF A. Khloponin from September 3, 2014, the Government Commission for Competitiveness and Alcohol Market Regulation has been established. The members of the Federal Service for Alcohol Market Regulation, the Ministry of Finance, the Ministry for Economic Development, the Federal Council, the Ministry of Trade, the Ministry of Agriculture, the Ministry of Health, the Ministry of Justice, the Ministry of Caucasus, the Federal Tax Payer Service, FSB, MIA, the Federal Customs Service, the Federal Anti-Monopoly Service,the Federal Service for Oversight of Consumer Protection and Welfare andRoszdrav will join the Commission.      

As you remember, the Government Commission for Alcohol Market Regulation was liquidated two years ago and its renewal speaks for forming of a fresh approach of the Government towards the alcohol market, directed to:

– alcohol market condition monitoring and performance evaluation of the state regulation;

– designing and taking actions for implementation of the state policy in production and circulation of alcohol products;

– working out and implementation of measures directed to prevention and stopping of illegal alcohol production;

– development of proposals concerning improving of competitiveness and statutory regulation in the alcohol industry.

We are grateful to the Federation Council for our support and it is worth noting that within the conference from July 2, 2014, dedicated to improving of tax system, it was observed that the rate of the slowdown of the legal alcohol production exceeded the reduction of consumption according to the State Concept in two or three times.

But achieving performance targets of the Concept is the key criteria for evaluation of the activity of state bodies. According to the brewing plan, production and consumption volumes shall be reduced more than twofold by 2020, approximately to 6 billion litres.

We consider that a sound state policy, leading to closing of transnational companies and reducing of beer production volumes, having impact on redistribution of production volumes of the independent brewing companies, shall be continued.

But, “dear independent”, it is not good to thank the Government for this policy in a “black” manner, creating the shadow market of uncounted alcohol products. Theresponsewillbehardline.

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