Russian Beer Taxes

This post is in honor of the issue that has been dominating the news cycle for at least a week: Russia  and its role in the presidential election. I don’t know if you can correlate  a decrease in drinking beer with an increase in nefarious behavior but it is a fact that beer production in Russia has declined significantly since 2010.

In 2010 the Russian government decided to raise beer excise taxes by 200 percent. Before this, beer was not legally considered alcohol. It was an attempt to curtail drinking and a response to alcoholism in the country. In 2010 Russian brewers produced 1 billion deciliters, about 630,000 barrels (31 gallons to a barrel). In 2015, they produced 659.5 million deciliters. Production has steadily gone down.

Since 2010, the Russian government has increased the excises taxes on beer every year.This year the Russian government once again raised taxes. Although overall production has decreased, the largest brewers have been losing market share to craft beer.

It is not clear that the high excise taxes have produced any decrease in alcoholism rates.  The taxes, however, contribute money to the national budget. Beer excise taxes are 1.3 percent of the budget and 45 percent of the overall alcohol excise taxes.

Although most people  would assume that Russians are heavy vodka drinkers, the drink of choice is beer. Russia ranks 26th in world-wide beer consumption. The United States is 17th.

States can often have two motives for taxing alcoholic beverage – financial and sumptuary. Governments need to find a balance since deeply curtailing consumption can hurt the bottom line. Russia’s tax policy for beer seems to be more weighted towards public health and decreased consumption.

For more information about Russian beer, see this USDA report.