The Government Alcoholises the Belarusians
Lately many in Belarus talk about prohibition to sell cheap poor quality alcohol and fight against alcoholisation of population in Belarus. However, sales of vodka in Belarus amount to a half of the market share.
Moreover, the government as watchdog and owner of most of distilleries in Belarus is steadily increasing production of vodka over the last years, effectively guaranteeing one of the most sustained sources of raising money for the budget. It turns out that the campaign against drinking is in direct conflict with replenishment of the state budget?
According to the latest Belstat data, the vodka sales continue to expand in Belarus. Between January and October this year sales of vodka increased by 1.2 per cent as compared to the same period of last year. Ten and a half million dekalitres (dL) of vodka were sold; its share in the total volume of alcohol sold amounted to 49.8 per cent (45.6 per cent in the period between January and October 2011). The other half accounts for all other pleasures, i.e. fruit and berry wine, beer, liqueurs and spirits, wine and brandies.
The State Constantly Increases Quotas for Production of Spirits
The alcohol market in Belarus is subject to government regulations. Production and sale of alcohol are licensable activities. Therefore, the share of counterfeit goods in the market is very miserable if not nil. This positive element was repeatedly emphasised by experts from Ukraine, Russia and Poland at one of the recent international conferences.
At the same time, the government sets and, if needed, adjusts quotas for alcohol production. The quotas are based on alcohol consumption and the government programme of fight against alcoholism, we were told in the Beldziarzhkharchpram consortium.
However, the quotas for production of vodka and other liquor increase steadily. If in 2010 they amounted to 17.2m dL and in 2011 to 18.6m dL, in 2012 they increased to more than 20m dL. This upward trend takes place against the background of drop in production of fruit wines ("plonk" in common language), which represents simple substitution but not fight against alcoholism as it is presented by officials.
The Beldziarzhkharchpram consortium says that increase in production of spirits is oriented mostly towards export sales and not towards domestic consumption. However, export sales amount so far to less than 5 per cent. In 2011 1.3m dL of vodka and liquor were exported, and the plan for 2012 is 1.8m dL. The share of imports in the Belarusian market is small. It is 0.4 per cent for vodka and 3.2 per cent for liquor.
The main producers of alcohol are local companies most of which are government-owned. According to the data of the Beldziarzhkharchpram, since 2005 the number of vodka and liquor producers increased from 17 to 25 companies. Eighteen of them are controlled by the government.
During this period their production capacity increased twofold. If in the beginning of 2005 this figure amounted to 13.6m dL, at the beginning of the current year it was 26.1m dL. As we can see, the production capacity of domestic producers allow them to further expand sales of the "firewater".
State Producers of Spirits
The Belarusian producers of spirits can be divided into three groups.
The first is represented by a single company, Minsk-Kristall. This is the largest producer with 30 to 33 per cent market share. Also, achievements of the Minsk company were recognised at the international level. The same-name vodka of the Minsk plant, according to the magazine Drinks International, was rated 9th among the world's bestselling vodkas and got into the top 50 of the most sold alcoholic drinks.
Minsk-Kristall recently opened a 7,000-sq.meter logistic centre in Kaliadzicy. For this purpose, BYR 122.1bn ($14,3m) were spent, including BYR 88.9bn ($0,5m) of borrowed money. It is clear that the Minsk company should increase sales in order to recover the costs. One of the latest examples is resumption of bottling of alcoholic drinks under the Nemiroff brand at the facilities of Minsk-Kristall.
The second group of producers of vodka and liquor includes five major government-owned companies located in every administrative region of Belarus whose dwellers are their main customers. These are Prydzvinnie from Viciebsk, Belalko from Brest, Liquor Plant from Klimavicy, Radamir from Homiel and Niomanoff from Hrodna. Their total share is estimated at about 40 to 45 per cent.
Private Producers of Spirits
The third group is private producers of spirits. This is the least representative group but three quite strong players stand out with total share of 17 to 20 per cent. First of all, one should note the Malinauscyzna Alcohol and Vodka Plant Akvadiv, which is located in the vicinity of Maladziecna. It is owned by companies of the pro-governmental businessman Uladzimir Pieftsijeu and Minks-Kristall. Such partnership between the private sector and the government assured Akvadiv a place among the top five producers of spirits.
Winery Dionis founded in 2003 by businessman Siarhiej Barok, previously an importer of alcohol, is also located in Minsk region. Its production facilities are situated in the vicinity of the town of Zaslauje. Despite the fact that the company has the word "wine" in its name, its 40° products are also sold with a bang.
Dionis will badly need additional resources in the near future. Siarhiej Barok must build a sailing centre for the government before 2014. In return for this, Dionis received a plot of land on the Pieramozcau Avenue in Minsk for building a health complex and a business centre.
The Minsk Winery, or rather its Brest branch which produces the full line of spirits, gains serious momentum in the market of vodka. In particular, during the first half of 2012 the Brest branch of the Minsk Winery bottled more than 1,1m dL of liquor which is 88 per cent more than during the same period of last year.
The Minsk Winery is among the top three producers of liquor in the country. But shareholders of the Minsk Winery Siarhiej Litvin and Uladzimir Vasilko are not going to rest on their laurels. They are going to build a large alcohol-producing plant in Dziarzynski district.
As we can see, in the future Belarus is not going to decrease production of spirits. The fact is that this business is a steady source of raising money for the budget. The excise tax and VAT command a significant part (40 per cent) in the price of a bottle of spirit.
Spirit Producers – the Largest Taxpayers
Thus, nothing surprising in the fact that all above companies are among the major taxpayers in the entire country as well as in their respective regions. Two companies are among the top ten taxpayers in Belarus for 9 months of 2012. Minsk-Kristall is the 7th in the list, and the Minsk Winery is the 10th. They are also among the top ten revenue-generating companies in Minsk.
For Minsk region, Akvadiv is among major revenue-generating companies, for Homiel region is Radamir, and for Viciebsk region is Prydzvinnie. Belalko is the largest taxpayer in Brest region. Niomanoff and Klimavicy Liquor Plant are among the top three in Hrodna and Mahiliou region respectively.
Whether the authorities are interested in giving up a steady source of raising money for the budget and thus creating additional trouble for them is probably a rhetorical question.
Aliaksandr Zajac, Siarhiej Jakaulieu
Originally published in Russian on TUT.BY
Relations with the West: No Step Backward
Lukashenka and his entourage believe that their resistance to the wave of democratisation from the West is quite rational and well-reasoned.
They hope that sooner or later, if they remain tenacious and consistent, the West will let them alone and will accept their reasons. It will not criticise Lukashenka (or his autocratic successor) more than it criticises presidents of Kazakhstan and Azerbaijan.
Last month, Lukashenka and Foreign Minister Uladzimir Makiej gave interviews where they substantiated position of authorities in their relations with the West. Their first message is that Belarus is not ready for democracy. Lukashenka denies democracy as it is defined by the Western civilization. Makiej hints in some of his statements that Belarus has a long way to go before becoming a democratic country.
Their second message – if the West "exports democracy" to Belarus (regime change happens), the West will get many problems in Belarus which it is absolutely not ready to handle now and will not be ready during a long time.
“Belarus is not ready for democracy”
On 4 October Lukashenka said that politicians in the West did not know Belarus at all and did not understand its specifics: "Brussels politicians do not probably know where this Belarus is situated, and even if they know, they think that we have nothing here but swampland and two small rivers". Insisting on democratisation, "the European Union wants not only turn upside down history but also our country".
Drawing on the example of Arab countries where the regime change took place, Lukashenka pointed out that the West was "exporting revolution and not democracy".
"I said already in the first days of these revolutions that the West should be condemned for interference; nobody has the right to interfere in internal affairs of states; they should sort out their affairs on their own. It was seen by the naked eye that it was a foreign, overseas scenario. And after situation began developing in a bad direction for them (for those scriptwriters), they launched open bombing attacks.
Nobody needs export of revolution. So, why would you need to export democracy, in their understanding of this word? Democracy is good, but are people ready and are the conditions in place for receiving such democracy in the country? They must have seen that it was not possible, that those states were not ready for it".
The West will face big problems in case of the regime change in Belarus
Lukashenka did not speak about possibility of the regime change in Belarus. He persuades both the West and Russia that his power in Belarus rests on broad popular support and impregnable. However, drawing on the example of the regime change in those countries, the specific features of which ("they are not ready for democracy") the West, in his opinion, does not understand, Lukashenka said that the West got big problems: "What, did they need Islamisation of the Arab East? Did they need it? No, they didn't. Now they regret it themselves, if they understand already what they have done and what they are doing now".
On October 18, press secretary of the Belarusian Foreign Ministry Andrej Savinykh repeated what was said by Lukashenka and Makiej in a more adequate way and named Belarus specifically. In particular, Savinykh said: "Western politicians demand that these (democratic) standards are introduced immediately, instantaneously, ignoring economic and political shocks and disproportions, which will arise inevitably if this process is sped up artificially. Proven record of many countries showed that artificial social experiments never brought positive results. This assertion is fully recognised by Western academic community but silenced by Western politicians".
Perhaps, Lukashenka, Makiej and the nomenklatura frightened by the events of 19 December 2010, think that repression in Belarus is directed against revolution and revolutionaries. In October, Lukashenka made a number of statements where he condemned actions of the "fifth column" of the West – opposition, as well as the West for its support of revolution.
On 20 October, Lukashenka said: "Money for opposition activities arrive through Poland and Lithuania, these main channels, as well as from various Western foundations, we know it. The masters are in the United States, Germany, and the Great Britain. And I wouldn't say that these are some private foundations, some businessmen, no, these are foundations financed by the state".
However, in fact, the activities of the authoritarian power are directed against any precondition for democratic development in Belarus. While justifying its actions by fight against revolution and radicals, the authorities dealt another blow against civil society. Persons who, with all imagination of the authorities, could not be classified among assaulters or revolutionaries got in the firing line.
On 2 October, financial police officers from the Financial Investigations Department of the Committee for State Control. searched the premises of independent publisher and editor-in-chief of Arche magazine Valer Bulhakau. More than 5,000 books were confiscated. On October 18, he was sentenced to a fine for illegal business practices. On 12 November, facing institution of criminal proceeding, Valer Bulhakau had to leave Belarus.
Conditions of defrosting relations with the EU: suggestions from the authorities
When accepting credentials of ambassadors from a number of the EU countries on 5 October, Lukashenka claimed: “We expect that the EU will give up the senseless pressure on our country, will take steps to restore confidence in it as a most serious partner and a kind neighbour. The mentor tone and allegedly the only truly western world view can be imposed ad lib on the countries that see themselves as part of the European Union in future. But this does not concern Belarus.”
On October 18 the spokesperson of the Ministry of the Interior Andrei Savinykh called on the EU to initiate talks: “Both sides have a list of claims. They can be resolved only at negotiating table and within constructive interaction.”
Taking into account the many words said by Lukashenka about “senseless pressure” and the following speech by Savinykh about unpreparedness of Belarus to make a jump into democracy, as the West wants it to be, one can suppose that in case the talks start, the authorities will offer a definite “zero variant” to the West. The West will close eyes on everything what happened in Belarus on 19 December 2010 and later (beatings, dismissals, arrests, tortures). The authorities in their turn will release political prisoners and will talk about it as a large step towards the West.
This is Lukashenka who will gain from it to a larger degree. The released political prisoners will remember for a long time what they have lived through behind bars. The society that they will see after the release will be significantly different form the one before 19 December 2010.
Just before 19 December 2010 Lukashenka claimed that no one would support the leaders of the opposition, people would not go out to the square. On the day of the next presidential elections Lukashenka will have much more confidence that the elections will be quiet and calm. It will be announced about the victory of Lukashenka with a huge overbalance in the first voting. And nobody will spoil him his play with the West.