Licensing and USAIS – future of the Russian brewing industry (2013-12-20)

Beer producers, closing their plants one after another, are waiting for the next trial. The Federal Service for Alcohol Market Regulation got back to the idea of extending force of USAIS for beer and another alcohol fermented beverages like cider, poire and mead products. Previously, in 2006, USAIS was introduced to the producers and importers of strong beverages. Producers have got neither necessary facilities for accounting purposes nor software and marks in time. As a result there was a deficit in shops. Producers and importers estimated losses equal to the amount of 1 billion dollars for 2006.

A draft bill of the Federal Service for Alcohol Market Regulation covering the extending of USAIS to the wholesale and retail sectors (now the system is operating only in the plants, producing strong spirits) is published in the United Portal of Information Disclosure. Also the draft bill contains requirements of the compulsory use of USAIS for producers of beer, beer beverages, cider, poire and mead in the volume of 300 thousand dal per year. It is also offered to extend USAIS control to the wholesalers. This norm of law shall come to force in November 1, 2015.

The government has already offered to extend USAIS to beer production: the following requirement was in the package of amendments to Act “On State Regulation of Alcohol Production and Turnover” that was passed in 2011. But during approvals USAIS norm disappeared from the final version of the draft bill. Instead of USAIA counters brewers had to set up outgoing inventory counters. Compulsory use of these counters began in July 1, 2013 but because of equipment errors beer producers were permitted to fix some information by hand.

The Federal Service for Alcohol Market Regulation explained this measure as a need to fight with counterfeit alcohol products: this was due to the increasing of excise duties for ethyl, alcohol and alcohol-containing products”. According to the information of the Audit Chamber, near 30% of sold alcohol was illegal. Besides, natural persons import to Russia large lots of cheap alcohol products from Kazakhstan and bootleg it – as stated in the explanatory note. From 2013 to 2015 alcohol excise duties will be increased on average by 35 per cent and it can make matters worse and influence on budget payments. The Federal Service for Alcohol Market Regulation refers to the letter of the Audit Chamber dated February 2013 that is predicting “significant budget losses” because of excise duty and VAT non-payment in 2013. By 2015 losses will reach 100 billion rub.

Now only alcohol producers and importers give a report on alcohol production and turnover to USAIS. From the beginning of this year operation of USAIS is testing in retail trade and from December – in the wholesale sector in stocks of some large retailers (“Diksi” and X5 Retail). Public officials believe that USAIS shall cover all alcohol wholesale by the beginning of 2016 and retail sector by the midyear of 2016. This period of time is spelled out in the operation plan of the Service.

From mid year large brewers have already made the outgoing inventory counters. For misrepresentation of information producers will pay the fine off (up to 80 000 rub.) but at present the Federal Service for Alcohol Market Regulation is loyal and the system is operating in test mode.

If the draft bill comes to force, it will not be necessary for producers to buy USAIS counters. They will only connect all fixed equipment to a special program. Industry and Trade Ministry and Economic Development Ministry haven’t got this draft bill yet. This draft bill hasn’t undergone the procedure of interdepartmental approval and maybe, it will be changed.

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