To the elections with vodka

On September 29, three government departments at once - the Ministry of Economic Development, the Ministry of Industry and Trade and the Federal Antimonopoly Service - proposed in 2017 to significantly reduce the price of vodka. So elections are coming soon.

If the government wanted to reduce male mortality, it would do exactly the opposite: it would lower the excise tax on beer and raise vodka.

Vodka has long played a big role in Russian politics and economy. The vodka monopoly was introduced in the 1470s by Prince Ivan III, the unifier of Russia under the auspices of Moscow. Under Ivan the Terrible, the vodka trade became a real bureaucratic system: there were special representatives (“tavern heads” and “tavern kissers”) who could only sell the sovereign’s drink - they did not have the right to sell drink of their own production along with it. Under Peter I, the “wine” (vodka was then called “bread wine”) monopoly provided the state with about 1/10 of its income. In 1811, vodka revenues gave the treasury 38 million rubles. - this is almost 1/4 of the amount that the war of 1812 cost the country, including the reconstruction of burned Moscow.

Periods when the state sought to make more money on vodka were replaced by times when, in order to win the people's goodwill, the state allowed entrepreneurs to produce alcohol - competition made it possible to reduce prices. Before his death, the Russian autocracy did not seek popularity among the people, but it was very dependent on vodka income. In 1913, vodka provided the autocratic budget with about a quarter of the income. In 1914, the Minister of Finance, Count Vladimir Kokovtsev, was fired for forming a "drunken budget" and soldering the people. Exactly one hundred years ago, in 1916, the Russian Empire even introduced an income tax, which in the future was supposed to replace vodka revenues for the budget, but it was not possible to collect it before the February Revolution.

Mikhail Gorbachev clearly did not take into account all this historical experience - the USSR briefly survived his anti-alcohol campaign (the decree of 1985 on the fight against drunkenness resulted in the cutting down of a quarter of vineyards and a halving of alcohol production).

Vladimir Putin has always pursued a competent policy in the field of vodka monopoly: when the situation allowed, the government increased excise taxes in order to collect more from those who consume alcohol, and in a crisis, when the population is growing disillusioned with the regime, it reduced prices or at least did not raise them. For example, in the summer of 2009, at the height of the crisis, the Ministry of Finance proposed to raise alcohol excises by 30% from 2010, but Putin personally rejected the proposal of the then Minister Alexei Kudrin.

Since February 2015, the minimum retail price of vodka, on the initiative of the same Putin, has been reduced from 220 to 185 rubles. for half a litre. This is how the state takes care of its citizens – it provides the poor with access to a strategically important product. And at the same time it contributes to the solution of an important electoral problem: the willingness to vote for Putin and United Russia is negatively correlated with the education of the electorate (as is the consumption of vodka). That is, the poor, the uneducated, and the drinkers, all other things being equal, vote “the right way” more often than the rich, the educated, and the non-drinkers.

The Ministry of Economic Development proposed to reduce the excise tax from 500 to 360 rubles. per liter of anhydrous alcohol. This, according to the calculations of officials, will reduce the minimum price of vodka from the current 190 to 136 rubles. for half a litre. The Ministry of Industry and Trade is even more determined: to reduce the excise tax to 200-250 rubles, and the minimum price to 100 rubles. The FAS agrees with this idea, also dreaming of "folk vodka" for 100 rubles. for half a litre. This idea is opposed by the Ministry of Finance (the budget is losing revenue) and supporters of longevity and a healthy lifestyle represented by the Ministry of Health.

Who will win? Let's see. Reducing excise taxes on vodka will slow down the gradual transition of Russians to beer - bringing the structure of alcohol consumption closer to the model of developed countries. In the last 30 years, beer consumption has been gradually catching up with vodka (when compared in alcohol equivalent), but vodka is still in the lead. In order to combat alcohol mortality, NES professor Evgeny Yakovlev argues, it would be necessary to sharply increase excise taxes on vodka and lower excise taxes on beer. If vodka were to rise in price by a third, and beer would fall in price by half, male alcohol mortality would decrease by about 40,000 people a year, he believes. But this is clearly an unpopular measure among the base electorate.