The Russian Federal Service for Alcohol Market Regulation, with the beautiful name of Rosalkogolregulirovanie, decided on the matter: From 2011 on, a price floor for brandy is introduced to the Russian market.
An amount of 120 million litres of brandy is sold in Russia every year and every second bottle of cognac is a fake.
Next year, brandy and cognac will follow Vodka: They’ll have a price floor. That means, in 2011, the cheapest 500ml bottle of brandy must cost at least 190 rubles (that’s $6.3.. give me a break). That price will probably change a bit during the next weeks, market research will give the final answer.
The union of alcohol producers’ chairman Dmitry Dobrov comments:
“The minimum price allows us to effectively push the fakes out of the market. Despite all the fears, shops are following this rule en masse. This measure has worked with vodka and infusions, it will definitely work with cognac. The level of prices suggested by the officials is absolutely adequate to the lowest level of prices for real cognac.”
Cognac market participants will react positive to this, as keeping prices high and quantities low is the core philosophy of bigger cognac players. Cheap brandy production is seen as a major threat for the well established brand of Cognac, as cheaper ‘eastern european cognacs’ use lower quality standards than the French original.
Officials hope that the new law could change the current situation of fake cognacs
A source at the Rosalkogolregulirovanie (again, loving this name) told newsbcm:
“We have repeatedly stated: the introduction of minimum prices will apply to the entire range of alcoholic beverages. But there can be no question about a one-stage introduction of such prices – everything will be gradual, as each level of the price floor is carefully studied. The main objective is to remove the underhand products and surrogates from the market, and not to hurt the legal and law-abiding manufacturers.”
Source: www.newsbcm.com, www.mn.ru