November 03, 2006

Ruthless wars for market domination in Russia

Part I. Alcohol market war

More than 40,000 Russians die annually of poisonous alcohol substitutes, and the problem was highlighted this week by reports on massive alcohol poisonings from several regions across the nation. Alcohol subsitutes are sold at cheap prices by street vendors and even stores, and officials have turned a blind eye on the problem.

First Deputy Prime Minister Dmitry Medvedev -- whom President Vladimir Putin put in charge of national to improve life quality and social conditions in Russia -- acknowledged Friday that widespread alcohol abuse was threatening the Kremlin's goals.

"If regional officials don't deal with these problems, then we won't be able to meet any goals under the national health project," Medvedev said during a televised conference with regional officials, adding that he was "shocked" by reports about massive alcohol poisonings.

More than 100 Russians have died and about 1,500 have been hospitalized in several provinces in recent weeks by an outbreak of toxic hepatitis caused by bad alcohol. Since the year's start, at least 18,000 have died of poisonous alcohol, according to statistics cited at a session of the upper house of Russian parliament Friday.

The house's speaker, Sergei Mironov, proposed introducing a state monopoly on ethyl spirit production and sales to cope with the problem, and criticized the Cabinet for dragging its feet on the issue.

Meanwhile, officials in the central Voronezh region on Friday announced the seizure of 600 tons of hazardous liquids that authorities suspected were intended to be resold as vodka. The liquids, containing 95 percent ethyl alcohol, included cleaners, car-window deicers and chemicals used for removing rust, the region's chief health official Mikhail Chubirko said, according to ITAR-Tass news agency.

In the western Belgorod region, 44 of 915 people sickened since August have died, the government emergency agency's local branch said, according to ITAR-Tass.

In most other affected regions, the high numbers of fake-alcohol reports started only last month. In the Siberian region of Irkutsk, officials reported 25 fatalities among 604 affected.

In the northwestern city of Pskov, near the border with Estonia, at least 16 people died of toxic hepatitis, and 369 remained hospitalized after drinking bad alcohol since mid-September, local officials said.

Vladimir Ryabenchenko, chief of emergency department at Pskov regional public health office, said most of those hospitalized were longtime alcohol abusers.
"Most of the victims of toxic hepatitis are people who have the most serious problems with alcohol, those who drink week by week," Ryabenchenko told The Associated Press. "They drink whatever is possible, including liquid for glass cleaning ... Those people normally don't watch TV, and therefore they don't get the news about the danger."

Homemade alcohol - known in Russian as "samogon," which means self-distilled - is common, and eau de cologne, aftershave products, cleaning liquids and various technical fluids are all widely consumed.

"Take for example a liquid intended to spark a campfire. People in low-income groups don't use it to spark campfires, they drink it," Gennady Onishchenko, the nation's top sanitary official, was quoted as saying by the gazeta news Web site Friday.

Earlier this year, Russia's interior minister described the widespread abuse of low-quality, often poisonous alcohol as a "national tragedy."

Pavel Shapkin, the head of National Alcohol Association, blamed the government for long ignoring the problem. When authorities finally tightened controls over the sales of ethyl spirit-containing liquids earlier this year, bootleggers turned to drugstores for cheap antiseptics that contain alcohol as well as chemicals that may cause hepatitis and other diseases.

While vodka sells at prices starting at about 70 rubles (about $2.60) per half-liter bottle, bootlegged alcohol is offered as cheap as 15 rubles ($0.60), Shapkin said.
"People who even once tried to drink antiseptics will never be able to fully recover," Shapkin said on Ekho Moskvy radio.

From 1991 to 2001, alcohol consumption in Russia increased about 40 percent, according to the World Health Organization.

Russia's population is dropping by about 700,000 a year. Experts attribute the plunge to economic turmoil that has badly hurt the state health care system, leading to a drop in birth rates and life expectancy.

Increased poverty, alcoholism, soaring crime and emigration have also taken their toll. Average life expectancy is just 66 years -- 16 years lower than Japan and 14 years lower than the EU average.

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