Alcohol producers calling for retention of minimum prices of alcohol, gradual increase in excise duties

13:20

Ukrainian alcohol producers are calling on the government to retain the minimum prices of alcohol introduced in November 2008, and not to allow a sharp jump in excise rates for their products.

"We signed a letter to be sent to Ukrainian Premier Yulia Tymoshenko and Ukrainian President Viktor Yuschenko with explanations of our position and a request not to revise the minimum prices [of alcohol]," the director of the Union of alcohol and tobacco wholesalers and producers (SOVAT), Volodymyr Demchak, said at a press conference in Kyiv on Thursday.

He said that there are initiatives to cut or cancel the minimum prices of alcohol. He is sure that proposals were given by companies that illegally produce alcohol. He said that a mechanism for minimum prices is an efficient one in fighting with the shadow alcohol market, which today is around 20%.

"There are real results after ten days of the action of minimum prices," he said.

According to the letter, which was also sent to Interfax-Ukraine, there is a proposal to increase the excise rates for alcohol in 2009.

"The initiatives will destroy the efforts of MPs on the legalization of the alcohol market and will doubt a rise in payments from the excise duty to the national budget, which was seen over the past five years," reads the letter.

Honorable board chairman of CJSC Odesa Cognac Plant (the Shustov trademark), Robert Huliyev, said at the press conference that the increase in the excise rate on cognac will have dangerous ends in the conditions of the crisis in Ukraine. Experts said that the increase in the excise rate would lead to a fall on the cognac market by 50%.

Demchak said that the association imitated a gradual increase in the excise on cognac.

Alcohol companies said that the increase in the excise in the conditions of the crisis will lead to a considerable fall in demand for alcohol.