29.11.2020

Quarantine alcohol, should we wait for a price increase?

A month ago, psychologists and even some officials predicted a sharp increase in alcohol consumption in the country – supposedly on self-isolation in the four walls, our fellow citizens would have nothing more to do but drink and eat. Fear of rampant alcoholism and rising domestic violence provoked the heads of some regions to take extremely harsh measures. In a number of areas, the time for selling alcohol was sharply limited, and in some places people even fell under the total ban on alcohol.

On the one hand, it may seem that these measures are justified: the people with the spread of the disease began to walk the myth that “50 grams” are vital for “internal disinfection.” Yevgeny Bryun, the chief narcologist of the Ministry of Health, refuted this ancient error – in his words, for alcohol to act as a “disinfection” from the inside, a lethal dose of alcohol must be taken at once. If you are not a fan of radical disinfection, obviously this method will not suit you.

However, in early April, Brun proposed restricting the sale of alcohol to self-isolation throughout the country. The temporary “dry law”, according to the narcologist, should positively affect the behavior of Russians in self-isolation. Sultan Khamzaev, activist and sober Russia project leader, made a similar proposal – he sent a letter to the federal government urging officials to limit the sale of alcohol to one person.

In terms of the introduction of strict restrictions, Karelia, Yakutia, Khakassia and Bashkiria particularly distinguished themselves. Tangible restrictive measures were introduced in the Perm Territory, Tatarstan and several other regions. So, in Karelia on March 31st it was possible to buy alcohol only from 10 a.m. to 2 p.m. True, on April 8, these measures were relaxed, and the sale of strong drinks was extended to 16 hours. According to the head of the region, Arthur Parfenchikov, due to such serious restrictions for the first week of April, the number of offenses committed while intoxicated decreased in the republic by 22%.

In Yakutia, the sale of alcohol was completely prohibited in the first week of April, but later the Prohibition was canceled there, only limiting the sale by time. Petersburg and the Leningrad region have so far avoided this fate.

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What can such restrictions lead to?

– The alcohol market in our country has always been divided into the legal sector and the shadow and illegal sectors. In one or another proportion. And historically, almost any attempts by our authorities to tighten the screws in the legal sector led to dramatic growth in the illegal sector, ”said Igor Berezin, president of the Marketing Guild of St. Petersburg in an interview with the author of the material.

The expert suggested recalling the “story of 35 years ago,” when Gorbachev announced a program to “improve the nation” with limited sales of alcohol by coupons and memorable “non-alcoholic weddings”:

– This led to a significant reduction in sales of the legal sector and a monstrous increase in home brewing. So monstrous that next year had to introduce coupons for sugar, because it became a deficit. His vacation rate was 2 kg per person per month, and he was sorely lacking. To make you understand, now we have sugar consumption of less than 1 kg per month per person. And then two were not enough.

The Saints of the 90s pushed the alcohol market out of control: control over the sale and consumption of alcohol was practically lost, as was the regulation of product quality and tax deductions. Beer advertisements were broadcast on TV almost round the clock, and you could buy a drink anywhere and at any time of the day.

And only after this period of lawlessness, the market began to improve, the specialist noted:

– Reasonable restrictions were quietly introduced: alcohol advertising in the media was prohibited, sales were limited in time, and excise stamps were introduced. And in parallel with this was the process of cheaper. If we calculate the cost of a bottle of vodka in average salaries, then it has been falling all the time since the ’80s. That is, one could buy more and more legal vodka for the average salary. Legal alcohol has become quite affordable, cheap, and a significant part of the market has moved into this segment. For beer – 98%, it’s hard to find a “left-handed” beer, and no, there isn’t much point in making it, for wine – about 90%.

Things are much worse with strong alcohol – according to the president of the Guild of Marketers, experts still do not know which part of this market is “in the shadows”.

– Someone speaks 20%, someone – 30 or even 40%. But no one, of course, knows for sure that he is a gray criminal market, ”Igor Berezin shrugs his hands.

Nevertheless, one thing is undeniably clear: severe restrictions on the sale of alcohol always entail violent growth in illegal production. And “our progressive 21st century” is no exception to this rule.

Surge and decline in sales on self-isolation

Clear disturbances in the country’s alcohol market (and St. Petersburg in particular – here we are in the framework of general trends) nevertheless occurred. Maxim Chernigovsky, General Director of NP Club of Alcohol Market Professionals, shared his observations with us:

– In the first two weeks, quarantine announcements increased sharply: the market as a whole was somewhere around 30%, and Petersburg was no exception. And in the last month, just a decrease in sales of legal alcohol has been observed.

Igor Berezin also noted this trend:

– At the end of March, we had a powerful surge, by 30 percent, of alcohol purchases, as well as other products of everyday demand. People were preparing for the transition to the holidays and stocked up not only pasta, buckwheat and rice, but also alcohol. In the first week of April, we got a decline in everything that people bought, including a decline in this very legal alcohol. Somewhere by 20% compared to the same weeks of April last year. People stocked up on alcohol – they drink it. What happened in the second half of April – we do not know yet, because there is no data yet.

That is, in the “hospital average”, given the surge and decline in sales, over the past 1.5 months, the consumption of retail alcohol in the country remained at the same level as a year ago. True, in different alcohol niches, the fluctuation in demand differed quite significantly. In some segments, growth reached up to 70%. These figures, noted Maxim Chernigovsky, distinguished segments of budgetary alcohol: cheap vodka, inexpensive wine in tetrapacks, etc.

“This whole quarantine story, paradoxically as it may seem, had the least impact on beer sales,” said an expert on the alcohol market. “Although the brewers howl, I read that Heineken’s sales have fallen, but this causes laughter – only 3-5% . And in Western Europe, for example, just beer sagged heavily, and sales of hard liquor increased.

According to Chernihiv, the situation in Russia is very different from Western European. The explanation is simple:

– Many work online, and this mode of operation in the online system just involves drinking beer and all kinds of such weak alcohol.

Import: it all depends on the buyer?

The only segment that significantly “sagged” in sales is imported alcohol, says Maxim Chernigovsky. This is due, first of all, to the growth of the dollar and the euro. Nevertheless, the president of the St. Petersburg Marketing Guild is sure: this is the case when it all depends on the customers. If they are ready to put up with the rampant price increase in retail and buy whiskey one and a half times more expensive, it will be at that price that they will sell it. If not, you can be sure that prices will begin to fall over time, despite exchange rates.

– It all depends solely on people’s willingness to pay this money for alcohol. My wife and I really love Asti Mondoro champagne, ”said Igor Berezin. – This champagne once upon a time with us cost 600 rubles at retail, with the exchange rate of 40 rubles, that is 15 euros. There was some demand for it. Then the euro became 80, and retail doubled the price of champagne, it became 1200. I could buy for that money, but I told my wife: “No, we won’t do it because it’s wrong.” And, apparently, so many people said. For some time this champagne stood at 1200, the sellers saw that no one was buying it at this price, and announced: “We have a New Year’s promotion, it will cost 800 rubles!” For 800 rubles, I began to buy it. And this story has been going on for 7-8 years: they put a price of 1200, for this price they don’t buy it,

The expert emphasized that nothing unusual has happened now: the euro rate jumped six years ago and earlier, and each time the growth in the cost of tequila, rum and foreign wine was limited by the desire of the consumer, and not by the prices of suppliers. After all, if customers cannot afford alcohol that has doubled in price, retailers simply won’t put it on the shelves.

– They will sell this champagne for 1500 – and it will stand, they will not buy it. And what is a product worth? This means that there is no sale, no money, the retail says: “Get out of my shelf, your product costs several months and is not for sale, I lose!” Retail works on the back, it is, in fact, on the side of the buyer, ”said Igor Berezin. – Because it is important for her to have a good turnover. She doesn’t care – the goods will cost 1,500 or 900 rubles, retail will still receive a percentage. So the majority of sales, stocks – this retail forces the manufacturer to concede. It is important that the state does not intervene, and the market will regulate everything. A product like Asti Mondoro champagne will cost that kind of money for which the buyer is willing to take it.

The expert emphasized that initially, about 200% of the margin on alcohol was included in retail trade. And in the catering, it’s 500-600%. So this is the case when a small “boycott” can really affect the seller.

Who began to drink more?

But back to more everyday things – a bottle of beer or a glass of vodka on self-isolation. Are the fears of officials who feared a total binge during the “weekend” confirmed? Less or more we began to drink at a distance? Specific studies have not yet been conducted, so with one hundred percent certainty it is not yet possible to draw any conclusions. But we can speculate, which is what we did with the president of the Guild of Marketers of St. Petersburg.

– Based on considerations of common sense and general erudition, all people who use alcohol can be divided into three groups. The first group is low-drinkers. That is, these are people who generally drink a little, don’t like it very much, they have consumed little before, and now they will not drink more, ”Igor Berezin shared his opinion.

These are the very people who can afford a glass of champagne for the New Year, but in general they have almost no effect on the statistics of alcohol sales. And self-isolation is unlikely to break them. And what about those who are on the other side of the “alcohol scale”? Will they start to drink even more? According to Berezin, it is unlikely:

– The second group is a group of people drinking. Here, 4 million clinical alcoholics and 15-20 million drunkards are all those who regularly drink. And this also will not change in any way under the influence of quarantine. They both drank and will drink. Hardly more, because they already drink at the limit of their internal organs. And they will keep their own – roughly speaking, if a person drinks 10 liters of beer a week, he will drink them, or a liter of vodka a week – he will continue to drink it.

A real change in behavior can be expected from the third group – Igor Berezin called it “a group of drinkers on occasion”:

– What will happen to them is hard to say. What are “occasional drinkers”? A group of friends is gathering for an event, or Friday, evening, office workers go to the nearest beer hall to mark the end of the working week and drink beer. All sorts of birthdays, holidays and other stories. On the one hand, all these cases have become much smaller. We practically do not meet friends, we don’t go to bars on Friday night, we don’t do anything else, and it seems like there are less reasons to drink.

But this is how the situation looks on one side only. On the other hand, the expert noted, very, very many “every evening became Friday evening”:

– Many of us do not need to keep our heads fresh in the morning, we are bored and worried. And this, it seems, is pushing us to start drinking more often without much reason. It is very difficult to say how this balance will turn out and how much will result.

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