Daily Archives: June 29, 2006

First Sign of the Neo-Soviet Apocalypse: Hopelessly Incompetent Russians Can’t Even get Alcohol Right

The New York Times reports that Russians can’t even manage to effectively sell alcohol. If this is how they handle that most favored of all subjects, do you dare to imagine what a hospital is like? La Russophobe doesn’t, but it’s likely why the population is plummeting so severely … and then there’s the matter of the nuclear weapons …

MOSCOW, June 26 — For wine drinkers here, things were bad enough when the authorities banned imports from Georgia and Moldova in the spring, but one could get by with other imports that were — no offense — better. Things are about to get worse.

In the last few days, wines from France, Italy, the United States and everywhere else have started disappearing from shops, supermarkets and restaurants. So have the whiskeys of Scotland and Ireland, the gins of England, the tequilas of Mexico. The reason is neither panic buying (though that would be in order) nor an unexpected appearance of Russian teetotalism, but rather a new federal excise law that has bottles flying off the shelves in a way no one intended.

Starting Saturday, any bottle of imported alcohol is required to have a newly designed excise stamp. It sounds simple enough, but little ever is in Russia, recalling the aphorism popularized by the former prime minister, Viktor S. Chernomyrdin: “We wanted better, but it turned out as usual.”

The deadline is being called Black Saturday, but by Tuesday the whole week was looking very black indeed.

Bureaucratic delays have slowed the distribution of the new stamps to importers, who are responsible for stamping the bottles themselves.

And the law requires thousands of dollars worth of computer equipment and software that has to be installed and certified by experts from an enterprise called Atlas, which is affiliated with the Federal Security Service, the K.G.B.’s successor.

The equipment must also be kept in special rooms with detailed requirements on space, temperature and the size of dust particles in the air.

The turmoil has left in the lurch hundreds of importers and distributors already reeling financially from the ban on Georgian and Moldovan wines (ostensibly for health concerns, though it is almost universally believed to have been a political move to punish two irksome governments spinning out of Moscow’s orbit).

Worse, the law forbids selling imports with the old excise stamps and requires sellers to warehouse them in the meantime, forcing stores to empty their shelves this week in preparation or, at one supermarket chain, to sell their imported stocks at a steep discount that was not, alas, widely advertised.

The law, passed last year, signed by President Vladimir V. Putin on New Year’s Eve and already delayed once, has disturbed the booming imports of wines and other alcohol that in Soviet times most could only dream of buying. In 2005, imports totaled $1.2 billion, more than double the amount only two years before, according to official statistics.

Imports accounted for half of the wine sold in Russia last year. The rest, like Russian vodka and other liquors, is also subject to the new excise law, but despite a brief scare over the possibility of a vodka shortage in the spring, the new stamps were developed and distributed by a different agency — the Tax Service, not Customs, as with imports — in time to meet an April deadline. “It will be a summer of low-quality Russian wine,” said Vadim I. Drobiz, a spokesman for a union of wine and spirit makers and dealers, noting that most Russian wines are mass produced from concentrate shipped from abroad.

The law was intended to bring order to a market that has been prone to smuggling and counterfeiting of the current stamp, even of some of the nicer brands.

The new stamp, printed with special materials and details for each bottle, should accomplish that, though not without significant disruptions in imports that Mr. Drobiz and others said could last through the year and even into 2007, while costing the market and the government millions in lost revenues.

Mr. Drobiz predicted that at least half of the country’s alcohol distributors would be forced out of business. Many, he said, have already been crippled by debt because the ban on Georgian and Moldovan wines left them with unsalable merchandise. As a result they cannot easily borrow more to refill the now-empty shelves with other imports.

Only 70 of 126 licensed importers have managed to acquire the new equipment and software necessary, the newspaper Vedomosti reported. Many foreign exporters have also been wary of sending new shipments until the mess can be sorted out, compounding the shortages. Irina A. Sazonova, a spokeswoman for the Federal Customs Service, defended the law’s implementation. “There are no problems,” she said. “The stamps are issued to every importer who asks for them.”

At the same time, she said that as of last week, fewer than half the requests for stamps for 162 million bottles had been granted, since the requests take as long as a month to process. Only 1.8 million bottles of foreign alcohol with the new stamps have been shipped so far, an amount Mr. Drobiz said amounted to only 5 percent of the market.

And the effect is already evident. Store after store visited this week had only a smattering of bottles with the new stamps, mostly spirits, not wine. Some made a futile effort to fill shelves that would normally have been full of wines and whiskeys with other products, often vodka, beer or boxed Russian wine.

Fyodor Omelchenko, the manager of an Italian restaurant called Vivace, said his wine menu was suffering. Where once he offered 70 wines, he said, he now has only a dozen. “The assortment will be reduced to a minimum,” he said, expressing a hope that the supply would be restored in weeks, not months.

Aleksandr Khaidukov, the manager of the wine section of the Davidoff store on Moscow’s prominent shopping street, Tverskaya, summarized the frustration with a colorful expletive that translates roughly as catastrophic.

His cellar shop, once abundantly stocked, was already virtually empty, its selection boxed and sent to a warehouse — during a recent hot spell, he noted, in which temperatures have exceeded 90 degrees — where its ultimate fate remains in limbo. (A proposal to give distributors until December to affix the new stamps on the bottles with the old ones is in the works, but even so the old bottles must be removed by Saturday.)

“You cannot sell,” he said, “but you still have to pay rent.”

Andrei Y. Yegorov, a spokesman for Wine World, one of the largest importers, said the government had disregarded the warnings of importers to delay the deadline or phase it in, perhaps to benefit domestic producers but more likely out of incompetence.

“The roads are bad in Russia,” he said, speaking euphemistically. “That is why nothing is sorted out in time.”

Second Sign of the Neo-Soviet Apocalypse: Clueless Mother Russia says Russian Kids not Allowed to be Sexy, Censors Many Magazines

Russia is desperate for babies, but the Kremlin is telling Russia youth that sex is filthy, just like in the good old USSR. The Moscow Times reports:

The Prosecutor General’s Office is seeking to shut three popular youth magazines that, it says, exploit teenagers’ thirst for sex and drugs.

Cool, Cool Girl and Molotok have violated laws pertaining to the media, narcotics and children, a statement posted on the Prosecutor General’s Office web site said.

The statement followed a complaint filed by Deputy Prosecutor General Sergei Fridinsky, who has demanded that the Federal Service for Media Law Compliance and Cultural Heritage seek the closure of the three publications.

Fridinsky was among 13 deputy prosecutors who submitted their resignations Tuesday. For now, he is apparently still on the job.

“The titles are widely popular among children and teens and are being sold without regard to age limit and at an affordable price,” the statement said.

It added that despite not being registered as erotic or advertising publications, the magazines “systematically print promotional materials with color illustrations that exploit the teenage readers’ interest in sex.”

Cool and Cool Girl are published by Burda Russia, while Molotok is published by Kommersant Publishing House. Darya Samsonova, a spokeswoman for Burda Russia, declined to comment on the prosecutors’ statements, saying her office had not been officially notified of the complaint.

Yekaterina Mil, deputy editor of the Molotok publishing house, which prints Molotok, said the magazine did not violate any laws and that it was not advertising sex but merely educating teenagers on the subject, The Associated Press reported.

Annals of Cold War II: No Trade Deal For Neo-Soviet Union

WASHINGTON (Reuters) – The United States and Russia are unlikely to reach a long-sought trade deal by the time Moscow hosts a summit meeting of leading world powers in mid-July, a top Republican senator said on Wednesday.

“I don’t think it’s possible,” Senate Finance Committee Chairman Charles Grassley, an Iowa Republican, told reporters after a committee meeting. Differences, including on the political front, are too big to be resolved by the July 15-17 G8 summit in St. Petersburg, he said.

Russia has been negotiating to join the World Trade Organization for more than a decade. Its biggest remaining hurdle is a bilateral accession deal with the United States.

Earlier this year, Russian President Vladimir Putin complained Washington was stalling Russia’s entry — a charge U.S. official have denied. Meanwhile, the United States has raised concerns that Russia is backsliding on democratic reforms and moving toward authoritarianism.

“There’s also the political issue of what the president sees in Putin’s heart. He sees a good heart,” Grassley said, referring to statement Bush made in November 2001. “I look in that heart and I see the old Soviet regime.”

Still, Blake Marshall, executive vice president of the U.S.-Russia Business Council, said the two sides could reach a deal soon, if not by the G8 summit.

“My guess is we are getting close, and so if for some reason it doesn’t materialize by mid-July it shouldn’t be too terribly long after,” Marshall said.

Negotiators have made progress recently on agricultural concerns, but some big issues remain, he said.