Duma's plan to triple beer duty may cost Russian jobs

Published on Friday 6 November 2009 21:19

RUSSIA'S lower house of parliament yesterday moved to triple duties on beer, which the government hopes will help plug a budget deficit but beer companies fear could lead to factory shutdowns.

Beer duty will increase to nine roubles from three roubles.

Government officials have said the bill will bring in an extra 65 billion roubles ($2.24bn) of budget revenues in 2010, specifying this would go into the regional and federal budgets, which is seen running a deficit of 6.8 per cent of GDP next year, or around three trillion roubles. It was not immediately clear when the Duma will hear the bill in the key second reading, when most draft bills can be amended. Danish brewer Carlsberg has said the firm could shut down some factories in Russia while new higher duties could cost the country some 100,000 jobs.

The shares of Danish giant Carlsberg, which owns Russia's largest brewer, Baltika, after buying out Scottish & Newcastle's half-share in the business, have regularly fallen in the past months on news from Russia alongside the shares of other international drinks giants SabMiller and Heineken.