Monopoly with GAK

In a country with a cold climate and a drinking population, alcohol and vodka are strategic resources. Is it any wonder that the idea of ​​an alcohol monopoly constantly excites the minds of Russian officials of the highest rank. So the Minister of Agriculture, Alexey Gordeev, obviously decided that the time had come, and wrote a letter to Deputy Prime Minister Alexander Zhukov with a proposal to create a State Joint Stock Company and give it a monopoly right to “purchase alcohol from producers, store it and sell it to consumers.” In addition, the Ministry of Agriculture and Food proposes that all excise taxes, which are paid today by both alcohol and distilleries, should be paid only by alcohol producers. According to the minister, these measures will not only increase tax revenues to the budget by one and a half times, but also legalize the entire “shadow” market.

Now is the time to mentally remember July 1998. Then, shortly before the default, President Yeltsin signed a decree on the creation of the Federal State Unitary Enterprise "Rosspirtoprom", which was supposed to receive all state stakes in alcohol and distillery factories and become a monopolist of the Russian alcohol market. The motives were still the same: the struggle for tax collection and against the shadow market. Nobody, of course, brought any state stakes, which then belonged mainly to regional authorities, to Rosspirtoprom: at that time (especially after the default), the local authorities treated presidential decrees without due reverence. The idea, however, was not forgotten. Already in the spring of 2000, by a government decree, which bore one of the first visas of the second popularly elected President Vladimir Putin, Rosspirtoprom was revived. The first to throw out the white flag was the wise mayor of the capital, Yuri Luzhkov, who transferred 51% of the shares of the Moscow Kristall plant to a monopoly. The others followed him. In total, at the moment, the Federal State Unitary Enterprise Rosspirtoprom (which, by the way, is supervised by the same Ministry of Agriculture and Food) owns large blocks of shares in more than 200 alcohol and distillery factories. However, it cannot be said that this state-owned enterprise has no competitors at all. Another thing is interesting: since the creation of the company, its tax debt has been constantly growing, so there is no need to talk about tax collection. But that's not all. The most interesting thing is that FSUE Rosspirtoprom is on the list of enterprises that should be privatized this year.

This story immediately removes a number of questions arising in connection with the fresh initiative of the Minister of Agriculture. For example, the question of the goals of creating a state enterprise in the form of a joint stock company. After all, its only function will be to receive money from vodka producers and give part of it (which one, of course, will also be determined by the monopolist) to alcohol producers. It is clear that alcohol was supplied directly from distilleries to distilleries, and will continue to be supplied. Probably, the form of ownership was chosen so as not to bother later with corporatization during privatization, as is necessary to do with Rosspirtoprom. With excise tax, everything is also more or less clear. If all the burden is transferred to alcohol producers, the same SJSC will be able to control its payment. The only problem is that now, when the main tax burden falls on distilleries, “scorched” vodka is made from completely legal, high-quality alcohol, and after the implementation of Alexei Gordeev’s ideas, the alcohol itself will begin to be counterfeited. And this is already a threat to the health of the nation.