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Last Updated: Sunday, 20 August 2006, 18:18 GMT 19:18 UK
Russia's thirst for imported alcohol
By Chloe Arnold
BBC News, Moscow

For weeks, spirits and hugely popular wines from Europe and the New World have been missing from the shelves of Russia's stores. It is to do with a crackdown from the Kremlin, suspicious that alcohol importers are avoiding paying the correct level of excise duty.

Assistant shows empty wine shelves at supermarket
Shelves of imported wine emptied as the new laws came into force

Times have changed in Russia.

When I first came here as a student 15 years ago, everyone drank vodka.

It came in simple glass bottles with no-nonsense names like Stolichnaya (or Capital) and Moskovskaya (or Moscow), and they had foil covers instead of real lids.

Today it is very different. In Moscow, at any rate, many Russians have turned their backs on vodka, partly for health reasons, and partly because of their new-found affluence.

Now, they drink wine imported from western Europe, South Africa, Australia and Chile.

Restaurants here serve absurdly expensive wines.

New Russians, as they are known - or the nouveaux riches - will happily blow 300 or 400 on a bottle, and get through half a case over dinner.

I have heard several instances of diners ordering the most expensive wine on the menu, giving it a sniff and then sending it back without even tasting it. It goes without saying that the restaurants charge them in any case.

So when the Kremlin brought in a new law that effectively banned the import of alcohol for two months, there was uproar. Wine shops across the capital closed their doors and restaurants switched to serving local beer as their stocks ran dry.

New legislation

The new law requires every bottle to display a different excise label with a bar code and more detailed information about its provenance. All bottles with the old labels have been removed.
Bottles of vodka
Many Russians have turned their backs on vodka

So why the recent legislation?

"Ostensibly, it was to combat counterfeit alcohol, particularly vodka," Dmitry Pinski, one of the biggest wine importers in Russia, tells me in a warehouse the size of an aircraft hangar.

Hundreds of Russians die every year from drinking moonshine.

But most of the fake vodka is produced inside Russia - it is not shipped in from abroad - so the new regulations seem heavy-handed.

Some in the business say the real reason is more sinister. The company in charge of providing the new labels is an arm of the FSB - the successor to the Soviet secret police, the KGB.

They say the government is simply trying to bring another area of business here under their control. Already though, the new labels are being sold more cheaply on the black market. So why anyone would want to go legal is beyond me.

Many of Dmitry's colleagues in the wine importing industry have gone under. But not all of them. I rang his biggest competitor, Maxim Kashirin, to ask for an interview.

"Of course," his secretary said, "but you'll have to do it today. Tomorrow he's off to Costa Rica for a six-week scuba-diving holiday."

Expansive cellar

Maxim did manage to fit me in, and before touring his expansive cellars, we chatted in his office.

It had floor-to-ceiling windows, a see-through fridge full of champagne, and giant black-and-white photographs on the walls of naked women drinking champagne out of Greek urns.

It is a far cry from the alcohol crisis of the 1980s, when Mikhail Gorbachev, then in charge of the Soviet Union, decided to restrict sales of vodka, because drinking had become such a problem

Rumour has it that what prompted the Russian government to bring in the new labelling system was the discovery that some importers were deliberately under-declaring the value of their wines to avoid paying higher duties.

What blew the lid on the practice, allegedly, was a bottle of Chateau Mouton Rothschild 1986, about as fine a wine as you could hope to drink.

Apparently, a senior customs official was given a bottle as a "gift" - not, I should emphasise, by someone in the wine industry.

Not being a connoisseur, he surfed the net to find out how much the bottle was worth. I have just had a look myself.

According to FinestWine.com, Chateau Mouton Rothschild '86 retails at almost 2,000 a bottle. Importers of the stuff to Russia were valuing it at 3 a bottle. The customs man smelt a rat.

Today the situation for importers is getting a little easier. The new labels are available, though still not widely, and wine, whisky, gin and tequila are slowly trickling back onto the shelves. But the backlog of bottles with the old stickers could take up to a year to re-label.

Improvised cocktails

It is a far cry from the alcohol crisis of the 1980s, when Mikhail Gorbachev, then in charge of the Soviet Union, decided to restrict sales of vodka, because drinking had become such a problem.

Russian beer drinkers
Russians are falling back on beer

Taxi drivers sold hooch from under their seats and people improvised cocktails made from windscreen-wiper fluid, eau de cologne and even melted shoe polish.

Back in the warehouse, I ask Dmitry, who supplies wines to the Kremlin, what world leaders at the G8 summit drank in St Petersburg last month, when the alcohol crisis was at its height.

Dmitry chuckles. But he is discreet and will not tell me, though I suspect the Russian President, Vladimir Putin, would have laid on something a little more extravagant than Stolichnaya and melted boot polish.

After all, where there's a will - or at any rate, when Tony Blair, George Bush and Jacques Chirac show up for dinner - there's a way.

From Our Own Correspondent was broadcast on Saturday, 19 August, 2006 at 1130 BST on BBC Radio 4. Please check the programme schedules for World Service transmission times.

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