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Bootleg alcohol remains a problem for Russia

Most Russians are confident that they only consume legally-produced spirits. The proportion of Russians who consciously purchase counterfeit or bootleg liquor remains relatively small. However, the percentage of those who are either unsure that their drink is the genuine article, or who don't care whether it's fake or genuine, is relatively high. This is what Senior Research Fellow at the HSE's Laboratory for Studies in Economic Sociology Zoya Kotelnikova found

Fake alcohol, designer clothes, accessories and audio technology are commonplace in Russia. Notably, alcohol price is not the sole factor contributing to an individual's decision to buy counterfeit, Zoya Kotelnikova found in her research into  The Use of Counterfeit Alcohol in Modern Russia: The Role of Cultural and Structural Factors. For example, social environment (neighbours, relatives, friends) plays a key role.

A government-backed anti-alcohol campaign has been underway in Russia since 2006. Kotelnikova stresses that it is important to understand how this impacts the market for counterfeit alcohol.

Data from the Russian Longitudinal Monitoring Survey (RLMS HSE) for 2012 were used as the basis for this research, which analyzed the survey responses of over 18,000 people.

Counterfeit in public consciousness

Radical anti-alcohol reforms implemented by the Soviet Union in the mid 1980s fuelled the development of illegal markets for the production and sale of spirits. However, the 2000s saw a marked uptick in the legal alcohol market in line with Russians' increased wealth, sparking structural changes in alcohol use. It became fashionable for young people to drink beer, while middle aged Russians developed a taste for more expensive, less traditional alcoholic drinks.

About 50% of respondents admitted that they had consumed alcohol in the previous 30 days. Of those, 39.8% opted for beer, white wine, champagne, cognac, or whisky. Restaurants and bars were given as the most common places that people choose to drink. As for frequency, that ranges from 2-3 times a month to 2-3 times a week.

About one third of Russians who drink alcohol (27.5%) prefer vodka. They drink it at home and visiting friends, with lunch or dinner, also from about 2-3 times per month to 2-3 times per week.

A new anti-alcohol campaign has been underway in Russia since the mid 2000s. It aims to gradually increase the price of hard liquor (spirits), and to limit distribution e.g. through banning sale in the evening or night. Alcohol market experts predict that we will see a new increase in consumption of bootleg drinks as a result.

The surveys showed that many people, 90.3%, believe counterfeit alcohol to be widespread. Almost half of those believe that the market for counterfeit alcohol has grown over the past 2-3 years, while only 9.7% of respondents indicated that they have seen less fake alcohol on the market.

Few back bootleg booze

Demand for counterfeit alcohol is noticeably lower than demand for counterfeit clothes, audio and video technology – goods that traditionally see a high level of fakes on the market, the research shows.

Of those respondees who said that they have consumed alcohol in the past 30 days, 85.1% were confident that they only drank legally produced drinks. Another 9.2% could not answer and 5.8% said they drank bootleg alcohol. More than half those surveyed who consumed alcohol (55.8%) said that, at the time of making the purchase, they were not aware that they had bought fake alcohol, 12.6% said that they sometimes bought counterfeit alcohol knowingly, and sometimes unwittingly, and 31.5% said that they intended to buy fake booze.

In the 1990s, counterfeit alcohol was mainly traded through open markets and points of sale, such as kiosks on the street. Today it takes place via conventional shops in outlying urban areas, and online shops. However, the researcher stresses that, based on her previous work, counterfeit alcohol can even be distributed via chain stores. For example, suppliers sometimes mix up genuine and counterfeit items – both of which then go on sale to customers. Therefore, some people who drink have been sold counterfeit products.

Indifference to quality equals higher risk

Despite the relatively low percentage of people who knowingly buy counterfeit alcohol, and despite the fact that most of those surveyed understood the health-risks involved, counterfeit goods remain an acute problem on the alcohol market, Kotelnikova says. Data from Rosstat, the Russian Federal Statistics Service, for 2011 shows that there were 246 underground distilleries operating in Russia, producing illegal alcohol. This underground industry involved about 80,000 people, including on the distribution side.

In her research, Kotelnikova also identified the factors that underpin people’s decisions to consume counterfeit alcohol. The conscious consumption of counterfeit alcohol is highest in Siberia, particularly in the area bordering Kazakhstan (18.9%), and among residents of Russia’s North Caucasus (9%). People in the central regions of Russia tend to consume legally produced spirits.

Most of the socio-demographic factors that have an impact are obvious – the lower the social status, education, and income – the higher the likelihood is an individual will consume counterfeit alcohol. Kotelnikova’s research also showed that the consumption of counterfeit alcohol is an overwhelmingly male activity (67.8% of those consuming fake booze are men).

However, surprisingly, price does not have much of a bearing on the choice to consume counterfeit alcohol. Social surroundings play a much more important role. The risks (of consuming counterfeit alcohol) are also higher among those people whose neighbours, relatives, or friends are involved in the production of home-brew or surrogate alcohols.

Customers’ indifference to drink quality or brand has an important impact on the consumption of counterfeit alcohol. People who are indifferent take less of an interest in the health risks than those who actively seek to avoid counterfeit alcohol. These people could therefore be described as conscious consumers of counterfeit alcohol, as could those who are unsure of the alcohol’s quality (but drink it anyway) – this latter group being chiefly comprised of less well educated, older people with low incomes, who live in large families (five or more people).

 

Author: Marina Selina, October 02, 2014