Alcohol and tobacco manufacturers will focus on foreign markets

April 22, 2016 18:31

According to the National Statistics Committee, the highest increases in prices in January-April 2013 were prices on local cigarette brands without filter.

In the framework of harmonization of excise policy within the EEA from 1st January 2013, Belarus increased excise taxes on tobacco and alcohol. As a natural result, the sales of alcohol and tobacco products decreased. Belarusian manufacturers of these products, given the reduced domestic market opportunities are forced to look for export options to maintain their production volumes. 

From 1 January 2013 excise rate on alcohol in Belarus was increased by 11.8-61.6%, depending on the type of alcoholic beverage. Excise taxes on tobacco products from January 1st, 2013 increased by 1.5-3.5 times. In Q3 and Q4 further increases are envisaged. Belarusian government introduced these measures to meet its commitments within the EurAsEC Anti-Crisis Fund and to harmonize the excise policy within the CES. It is planned to continue gradual increases of excise duties on alcohol and tobacco to level with Russia.

As a result of the excise growth, prices on alcohol and tobacco products have increased significantly. Prices on domestic non-filter cigarettes increased by 67.5% in January –April 2013, vodka by 17.4%. Such a significant rise in prices has resulted in reduced sales of alcohol and tobacco products in the domestic market. In Q1 2013 sales of vodka in real terms fell by 9%, and tobacco products - by 1.4% over the same period in 2012. Stocks of alcohol started growing due to existing production plans approved earlier for 2013.

The situation has also deteriorated due to growth of incomes. Beer imports in Q1 2013 increased by 38% over the same period in 2012, spirits by more than 30%. The population increased demands for better quality alcohol. Therefore, alcohol and tobacco producers are forced to pay attention to foreign markets, since the current excise policy reduces the domestic market’s profitability. The main tobacco producer, Grodno Tobacco Factory, expects to double exports in 2013, since domestic market is limited and will not expand.

Thus, excuse duties growth on the one hand forded citizens to reduce alcohol and tobacco consumption and increases budget revenues, but on the other hand reorients local producers towards international markets. Further increase in excise duties may be able to reduce alcohol and tobacco consumption and complement efforts targeting fight against alcoholization of the population – due to increased costs.

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The Belarusian authorities have launched a discussion on the moratorium or abolition of the death penalty under the pressure of Belarusian human rights activists and international community. Apparently, the authorities are interested in monitoring public sentiments and response to the possible abolition of the capital punishment. The introduction of a moratorium on the death penalty would depend on the dynamics in Belarusian-European relations, efforts of the civil society organisations and Western capitals.

In Grodno last week, the possibility of abolishing the death penalty in Belarus or introducing a moratorium was discussed.

The Belarusian authorities are likely to continue to support the death penalty in Belarus. During his rule, President Lukashenka pardoned only one person, and courts sentenced to death more than 400 people since the early 1990s. Over the past year, Belarusian courts sentenced to death several persons and one person was executed.

There are no recent independent polls about people’s attitude about the death penalty in Belarus. Apparently, this issue is not a priority for the population. In many ways, public opinion about the abolition of the death penalty would depend on the tone of the state-owned media reports.

That said, the Belarusian Orthodox Church and the Roman-Catholic Church stand for the abolition of the capital punishment, however their efforts in this regard only limit to public statements about their stance. Simultaneously, the authorities could have influenced public opinion about the death penalty through a focused media campaign in the state media. As they did, for example, with the nuclear power plant construction in Astravets. Initially unpopular project of the NPP construction was broadly promoted in the state media, and eventually, according to independent pollsters, was accepted by most population.