During a discussion on the budget recently, Hrant Bagratyan, a member of the National Assembly of the Republic of Armenia and the Armenian National Congress (ANC) parliamentary group, said that Armenia should gradually become a “wine-drinking” country, and one should raise the vodka excise, bringing down that of wine. He claims that the changes will allow Armenia to become a country producing wine, plus our budget will have 5-billion-AMD additional revenue. www.aravot.am asked Avag Harutyunyan, the director of the Maran company and the president of the Union of Armenian Winemakers, to comment on this.
“Bagratyan raised two issues regarding the excise taxes of vodka and wine. They are different, but important issues. Regarding the excise tax of wine, we have always said that it should be eliminated completely, as in neighboring Georgia. Georgians had eliminated the excise tax of wine, and after that, the production of wine nearly doubled. When the Russian market closed its door on the Georgian wine, Georgia found a way of overcoming the crisis, and it increased the wine production from 5 million bottles to 10 million bottles a year. If Armenia does so too, the budget will not suffer many losses,” Mr. Harutyunyan is convinced.
According to him, 5 million bottles of wine are sold in Armenia annually, and the excise tax from each bottle is 100-200 AMD. The president of the Union of Armenian Winemakers states that unequal pricing policy is pursued toward vodka and wine.
Read also
As for the second issue raised by Bagratyan regarding the price of vodka, according to Avag Harutyunyan, that unfair policy can be noticed when a half-liter bottle of vodka containing 40 percent alcohol is sold in the Armenian market for 1000 AMD, i.e. for as much as wine containing 10 percent alcohol: “Whereas vodka should be 4 times more expensive, as in many developed countries around the world, because the price of liquor is determined by alcohol. So a half-liter bottle of vodka should cost 4000 AMD, in order to be equal to the price of wine. I don’t say that the price of vodka should necessarily quadruple, but even if it doubles, and the excise tax of wine is eliminated completely, the state will not suffer. This is what Bagratyan and I have been saying for 10 years, but it is a voice in the wilderness, and zero attention is paid.”
The winemaker asserts that per capita consumption of vodka in Armenia is 16 liters a year, and that index is the third highest around the world after Russia and Moldova. According to our interlocutor, raising the price of vodka and freeing wine of the excise tax will bring
about development of winemaking, the budget will get a lot of revenue, and people will start to drink less vodka and more wine. “In this case, the state will do nothing, but it will benefit, at the end of the day, the people will also benefit. One should just go for a conflict with some oligarchs, which, unfortunately, the government doesn’t want to do,” our interlocutor states.
Gohar HAKOBYAN
