Ukrainian Economy Ministry proposes raising minimum alcohol prices

MOSCOW. Nov 24 (Interfax) - Ukraine's Economy Ministry has proposed raising the minimum retail prices for alcoholic beverages, including an increase of 5%-13% for vodka and spirits, 40%-85% for wines (except for sparkling wines and carbonated wine drinks), and 12% for sparkling wines and carbonated wine drinks.

The government's draft decree on this score was published by the Economy Ministry on its website on Thursday for public discussion, Ukrainian media said.

The ministry also plans to adopt a differential strategy on setting the minimum retail prices for still (non-sparkling) wines, other wines, vermouth and other fermented drinks depending on the type and size of bottles and other packaging: 0.7-liter glass bottles or other packaging, Tetra Pak-type and Bag in box packaging, food-grade aluminum cans, or 1-liter plastic bottles.

Under the government's initiatives, the minimum prices for vodka will be raised by 4.7%, i.e. from 89.4 hryvni to 93.6 hryvni fora 0.5-liter bottle, for 3-star cognac (brandy) by 6%, from 128.3 hryvni to 136 hryvni for a 0.5-liter bottle, for 4-star cognac (brandy) by 6.6%, from 139.3 hryvni to 148.6 hryvni for a 0.5-liter bottle, and for 5-star cognac (brandy) by 6.4%, from 151.7 hryvni to 161.4 hryvni for a 0.5-liter bottle.

The minimum retail prices for a 0.7-liter glass bottle of grape wine may be raised by 57%, from 42 hryvni to 66 hryvni, by 11.9% for a 0.7-0.75 liter glass bottle of sparkling wine, i.e. from 109 hryvni to 122 hryvni for a bottle.

The current minimum prices, set back in 2021, no longer match manufacturers' actual costs for the production and sale of alcoholic beverages and require an adjustment, according to the document.

The government expects that adjusting the minimum wholesale and retail prices for alcoholic beverages to a level where they will be economically justified and sufficient to cover manufacturers' own costs for the production and distribution of alcoholic beverages will make it possible to increase the collection of taxes and other duties to the state and local budgets by 300 million hryvni.

Furthermore, this measure will help cut the consumption of alcoholic beverages by the population and reduce the number of alcohol-induced deaths.

Data from the Unified State Register of Producers of Alcoholic Beverages indicates that Ukraine has 77 producers of ethyl, cognac, fruit and grade alcohol and 462 manufacturers of alcoholic beverages. A total of 454 entities have wholesale trade licenses for alcoholic beverages, except for cider and perry. As many as 94,197 entities in Ukraine trade in alcoholic beverages.