Russian Law to Restrict Beer Sales

By ANDREW E. KRAMER

Published: July 20, 2011

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MOSCOW — The slow but steady gain of beer over vodka as the drink of choice among Russians suffered a setback on Wednesday when President Dmitri A. Medvedev signed a law restricting beer sales outdoors and late at night.

In the last decade, as Russians’ incomes have risen, brewers have earned remarkable profits despite the rising taxes on beer. The new law could particularly harm the Carlsberg Group of Denmark, the leading beer seller in Russia with about 40 percent of the market. It sells Tuborg, Carlsberg and some local brands.

Part of the success with sales was because of the widespread availability of beer in Russia and the police’s tolerance of drinking in parks and on the subway, unlike more regulated markets outside Russia

The new law, which will take effect in 2013, will restrict sales from 11 p.m. to 8 a.m. It comes after similar regulations for vodka.

The law also prohibits sales from sidewalk kiosks and at train stations. That could be a problem for brewers, as about 30 percent of beer sales now come from these sites.

In a sign of the growing importance of the Russian beer market, shares in Carlsberg dropped sharply this month when the law appeared likely to pass in Parliament.

Until the new rules take effect, Russian regulation will continue to favor beer over vodka as a more healthful alternative. The laws combined with changing lifestyles in Russia have helped beer in the marketplace.

Russians still drink slightly more vodka than beer. Russian regulators say the average consumer drank about 12.5 liters of alcohol last year, with beer accounting for about four liters and vodka more than five liters, according to Bloomberg News.

“The law brings some order into the sale of beer,” said Vadim Drobiz, director of the Center for Federal and Regional Alcohol Market Studies, according to Bloomberg News.

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nytimes.com/2011/07/21/business/global/