Russia facing vodka drought

MOSCOW, Russia -- It is a prospect to make the blood of any patriotic Russian run cold -- vodka supplies running dry.

The country's national drink could soon be a rarity on shop shelves after a new law on excise payments brought most distilleries to a halt.

Angry vodka producers said on Monday the situation would be a boon to bootleggers, never slow to supply the nation with its favourite tipple.

Ironically, the new excise system was designed to increase control over the alcohol market and stem the sales of bootleg liquor, which reportedly accounts for 40 percent to 70 percent of Russia's alcohol market.

A standard half-litre (one-pint) bottle of vodka in Russia costs from 35 to 150 rubles ($1.21 --5.17).

The new law, passed last year but enacted only on June 1, gave authorities six months to prepare the new system.

The law splits duty payments between producers and wholesalers and introduces special excise stamps to help combat rampant bootlegging in a country where vodka is a staple for millions of people and makes up a large chunk of state revenues.

But producers said the government had failed to get the new arrangements in place before the deadline, forcing them to halt production last Friday.

Warehouse supplies of vodka are expected to run out in a week, threatening to leave Russians without their favorite drink, alcohol producers said.

"We already saw longer lines for vodka on Friday, and if it continues we will get a vodka riot," the marketing director of the Russian Wine and Vodka Company, Gherman Klimovsky, was quoted by the Moscow Times as saying.

The company makes the Flagman vodka and is the Russian distributor for the British food and spirits conglomerate Allied Domecq.

"If the government does not act promptly, legal vodka will disappear from the shops and bootleggers will step in," Alexander Timofeyev, general director of key Moscow vodka plant Kristall, told Reuters.

Timofeyev, who company makes the world-renowned Stolichnaya vodka, dismissed media reports of looming vodka riots, as wine and spirits suppliers have been given until September to sell off existing stocks.

But he said the government had to act quickly.

"I hope that before the end of the week our life will get back to normal," he said. "Otherwise there will be a surge in illicit production."