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Inverse Deflation Alert: Russia Hikes Minimum Vodka Price By 36%

Tyler Durden's picture


In a watershed moment for inverse deflation watchers everywhere, Russia, and specifically its alcohol watchdog entity aptly named "Rosalkogoluregulirovaniye" just delivered the judgment blow, with a decision to hike the minimum vodka price by 36% in 2013... as if a million cirrhotic livers cried out (or was it rejoiced) and were suddenly silenced. The reason for this shock and awe approach to defeating deflation: fighting counterfeiting, by hiking the tax on alcohol purchases, which in turn will push the baseline price of alcohol everywhere higher. In other news, a lightbulb is slowly lighting up above the president's head: "new taxes -> booze -> "fairness doctrine" -> bingo" as vice taxes are set to surge in a banana republic near you. Remember: "that's a tax for that" and if there isn't yet, there will be.

From Moscow News:

Russia’s alcohol watchdog is to fight counterfeit alcohol by raising the minimum retail price for vodka, following similar measure regarding shampanskoye.


The cheapest vodka in Russia could cost 170 rubles for half a liter from January 1, 2013, according to an order project by Russian alcohol watchdog Rosalkogoluregulirovaniye (RAR), Prime reported.


Thus the price of the cheapest vodka in Russia’s shops could rise by 36 percent, from the current 125 rubles.


It is more than the rise of tax, from 300 to 400 rubles (25 percent) per liter of spirit from Jan. 1 2013.


The planned minimum price from producers, according to the project, can be 132 rubles, with prices starting at 138 in wholesale sector.


The lowest retail price for other spirits will also rise. Minimum price for cognac will go up 28 percent, from 219 to 280, brandy will become 31.5 percent more expensive, from 190 to 250.

Elsewhere, Bill Dudley was last seen on a soapbox in Gorkyi Park, telling anyone who listens that vodka prices may be soaring, but the hedonic adjustments on the iPad 4 (or is it 5 now?) make it more than fair, and deflation is everywhere, as far as the bloodshot eye can see.

And now, Russian drunk Fight Club:


Sadly, it also means less "Need for Speed: Moscow"


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Mon, 11/19/2012 - 09:59 | 2995589 kaiserhoff
kaiserhoff's picture

Now, that will piss off Ivan.

Mon, 11/19/2012 - 10:01 | 2995590 GetZeeGold
GetZeeGold's picture





The horror......the horror.

Mon, 11/19/2012 - 10:05 | 2995607 Surly Bear
Surly Bear's picture

This just self defense, Russia invades Poland saying has nothing to do wih vodka recipe....

Mon, 11/19/2012 - 10:13 | 2995633 Zer0head
Zer0head's picture

so in real time what does it mean drunk by noon instead of 9am

Mon, 11/19/2012 - 10:41 | 2995704 GetZeeGold
GetZeeGold's picture



Probably didn't even really notice your Stolleys got replaced with Popov.

Mon, 11/19/2012 - 10:57 | 2995750 samcontrol
samcontrol's picture

this is the plan inflate inflate everywhere....

Mon, 11/19/2012 - 11:14 | 2995793 Manthong
Manthong's picture

That’s the way it always goes with communists… nonessentials drop in price and the necessities for life skyrocket.

This doesn't bode well for Putin’s popularity.

Mon, 11/19/2012 - 14:25 | 2996351 Boris Alatovkrap
Boris Alatovkrap's picture

This is really really sucks! This is moving for shadow money to hard (liquor) assets combining with government tyranny! Putin can kiss big Russian after-thought! Putin is done!

Mon, 11/19/2012 - 10:05 | 2995608 Surly Bear
Surly Bear's picture


Mon, 11/19/2012 - 10:06 | 2995610 bigdumbnugly
bigdumbnugly's picture

hitting 'em where it hurts

Mon, 11/19/2012 - 10:09 | 2995613 vast-dom
vast-dom's picture

it's like they just took away all the water in Russia.

Mon, 11/19/2012 - 10:04 | 2995605 kliguy38
kliguy38's picture


Mon, 11/19/2012 - 14:29 | 2996363 Boris Alatovkrap
Boris Alatovkrap's picture

I know of this Ivan for which you are speaking - Ivan Tudrinkalot

Mon, 11/19/2012 - 10:01 | 2995594 Racer
Racer's picture

They are raising the price 36% to fight counterfeiting?

ROFLMAO, how stupid can you get!

Mon, 11/19/2012 - 10:02 | 2995595 Capitalist
Capitalist's picture

The Russians are experimenting with a new central planning transmission mechanism: Vodka prices.

The ECB is taking note of this liquidity measure.

Mon, 11/19/2012 - 10:08 | 2995612 wisefool
wisefool's picture

Of course. 1st world nations have high rates of stress, taxation, and the corresponing indulgences, low birth rate. 2nd and 3rd world nations win every war with the opposite approach. On a long enough timeline...

This tax will pay for the baby making incentives putin put in place a few years ago.

Mon, 11/19/2012 - 10:07 | 2995609 RacerX
RacerX's picture

Right. It's not "Inflation", but "Negative Deflation".

Lower is better, no?

Mon, 11/19/2012 - 10:11 | 2995628 orangegeek
orangegeek's picture

Communists are such a laughable bunch of little creatures.

Mon, 11/19/2012 - 10:29 | 2995668 MassDecep
MassDecep's picture

Yeah, aren't we a laughable bunch?


Signed: Maryland USSA


Mon, 11/19/2012 - 10:15 | 2995635 The Proletariat
The Proletariat's picture

Awesome!  Best Regards, Bootleggers. Mafia. Black Markets.

Mon, 11/19/2012 - 10:17 | 2995643 GetZeeGold
GetZeeGold's picture



Going long speakeasys <--- just Google it...and yes I'm that old.

Mon, 11/19/2012 - 12:48 | 2996071 Things that go bump
Things that go bump's picture


Mon, 11/19/2012 - 10:14 | 2995636 bugs_
bugs_'s picture

Inelastic goods economics.

surprised they aren't slapping more taxes on gold.  oh wait that won't raise enough.  best stick to ATF and H.

Mon, 11/19/2012 - 10:24 | 2995642 Mercury
Mercury's picture

 Sorry, Grey Goose is only for central planners. I'm sure you'll enjoy our house brand.


Mon, 11/19/2012 - 10:30 | 2995677 kaiserhoff
kaiserhoff's picture

Must taste like panther piss.

Mon, 11/19/2012 - 10:45 | 2995719 Winston of Oceania
Winston of Oceania's picture

Honestly you can have the wheat vodka, I'll take the authentic Polish potato vodka shaken or stirred...

Mon, 11/19/2012 - 10:17 | 2995645 spentCartridge
spentCartridge's picture

Moonshine, bitchez ...

Mon, 11/19/2012 - 10:17 | 2995647 yogibear
yogibear's picture

Benny Bernanke and the Federal Reserve is hoping for massive inflation. If Bernanke and the Fed can get 30 to 40% a year they would be happy. Some US companies are already raising price that amount.

Mon, 11/19/2012 - 10:19 | 2995653 Terp
Terp's picture

4.25 EUR for half a liter. And the 5 EUR tax is on top of that?


Wow, booze in mother Russia is expensive. What happened to the times when a liter of vodka was cheaper than a loaf of bread? Damn.

Mon, 11/19/2012 - 10:22 | 2995658 MiltonFriedmans...
MiltonFriedmansNightmare's picture

All your vodka are belong to us....

Mon, 11/19/2012 - 10:36 | 2995692 De minimus
De minimus's picture

Still sounds like the old Pravda to me.


Mon, 11/19/2012 - 10:56 | 2995743 LeisureSmith
LeisureSmith's picture

Raising the price on legal alcohol to combat counterfeiting.....genius. The black market says Thanks.

Mon, 11/19/2012 - 11:01 | 2995767 Mister Ponzi
Mister Ponzi's picture

The Russian government announced some weeks ago to do more in their fight against smoking and especially drinking as a much larger percentage of (male) deaths relative to Western Europe/the U.S. is alcohol-related in Russia. A recent study delivered huge estimates regarding the economic loss due to these incidents. Therefore, a reaction like this is completely unsurprising. It is also safe to say that a population that - for good reasons - has learned during many decades to mistrust its government and to not rely on government's help will substitute expensive official vodka with cheaper home-made versions. If you look for a new profession why not trying eye doctor in Russia?


Mon, 11/19/2012 - 11:59 | 2995918 monad
monad's picture

Long black market money laundering banks

Mon, 11/19/2012 - 12:07 | 2995942 resurger
resurger's picture

lets see!

36% increase in Russia! How much will it cost now in Saudi Arabia in terms of Riyal that is... (Including the hike in smuggling prices as well)

Mon, 11/19/2012 - 12:12 | 2995969 FrankDrakman
FrankDrakman's picture

170 rubles per half liter? That's $11 CAD for the full liter.

Here in the Great White North, $11 CAD will not even buy you a 375 ml bottle of Schmirnoff's. Because of our standardized bottles here in Ontario, you can get 750 ml for about $24 CAD (more for Grey Goose, Ketel, etc.), and 1.1 liter for $37. A Russki gets 3.5 liters for the same amount.

'course, nothing beats Detroit, where I once purchased a US gallon of Fleischman's vodka for $7 US.

Mon, 11/19/2012 - 12:46 | 2996065 spentCartridge
spentCartridge's picture

70CL bottle of Smirnoff at my local Spa today ~ £13.00  (they gots a deal on)


The weed is free  :)


Mon, 11/19/2012 - 15:05 | 2996449 1000924014093
1000924014093's picture

If only one could buy futures in russian moonshine . . .

Mon, 11/19/2012 - 17:31 | 2996943 Intoxicologist
Intoxicologist's picture

Drink up, bitchez!
