Government Mulls Alcohol Monopoly

Plans to introduce a government monopoly on alcohol will improve both the macroeconomic situation and public health, analysts say.



Judging by remarks made by Deputy Prime Minister Daniyar Usenov, who voiced the idea on August 15, the cabinet believes the alcohol industry should be within the exclusive purview of the government. Usenov cited data showing that current taxes on spirits now amount to just 380 million soms a year, whereas in 1996-97, when the government still had a monopoly, the state received a billion soms annually from the industry.



Experts believe the introduction of a government monopoly will help to protect consumers from poor quality products. State control of the industry also gives grounds for hope that patterns of alcohol consumption will improve, with spirits giving way to an increase in beer and wine drinking.



The introduction of a monopoly on alcohol will also swell the government’s coffers. In Kyrgyzstan, the alcohol industry’s contribution to macroeconomic performance is on a par with mining and energy. Sensible management of the revenue from alcohol sales should enhance that positive impact.



Experts maintain that the state’s intention to take control of the alcohol industry signals a willingness to tackle a range of economic and social problems, from protecting the domestic market to efforts to improve public health. A monopoly would require the state to assume responsibility not only for the profitability of the industry, but also for the quality of drinks on sale. It would also mean that the state would fund alcoholism prevention and treatment out of the income derived from sales.



(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)