Illegal vodka worries liquor producer

  • 2001-03-29
  • Aleksei Gunter
TALLINN - Officials from the Estonian Customs Department and other institutions support the idea recently floated by liquor producers of creating a special team to fight smuggled and sham vodka.

Janek Kalvi, the marketing director at the leading vodka producer Liviko distillery, said his company suggested last week a number of institutions that control taxable products could create special units to try to put a stop to illegal and counterfeited vodka.

The customs department, the consumers protection department and the police all supported the idea but concrete plans have yet to be made.

Peeter Uhtegi, director of the consumers protection department, said the professionalism of fake vodka producers is admirable and evasive.

"Year by year it is harder and harder to expose counterfeit vodka. There are relatively few experts who can do it," he said.

So far the largest haul of fake vodka confiscated by the department in cooperation with the police has been 100,000 bottles.

Uhtegi also said that the recently discussed legalization of homemade liquor and a ban of alcohol sales at night will not stem the flow.

"Some home-grown bootleggers will definitely produce more vodka than they would personally need and start selling it," said Uhtegi.

Liviko and its competitor Ofelia distillery see a way out that would require state support - to reduce excise tax on alcohol.

"When the excise tax was increased from 115 kroons ($6.50) to 145 kroons on Jan. 1, 1999, the amount of state revenues from alcohol sales decreased by 150 million kroons," said Liviko's director Udo Themas.

If the excise tax were decreased, he argues, the price of legal and reliable vodka would be closer to the bootlegged vodka available now in Tallinn for 60 kroons per liter and even less outside the capital. A liter of legal vodka costs about 120 kroons.

A similar scheme recently put into action in Lithuania was successful in hitting the illegal vodka trade. Meanwhile, legitimate vodka sales went through the roof.

The market share of bootlegged vodka in Estonia is estimated to be comparable to the volume of some major spirits producers' total production, said Kalvi.

"We probably have another Liviko somewhere in Estonia," said Kalvi, commenting on the joint capacity of underground liquor producers.

Kalev Motus, from the customs department's unit fighting drug and explosives smuggling, said it is relatively easy to uncover liquor smuggling during customs control compared with drugs or explosives.

Motus admitted a special anti-bootlegging unit would be useful.

Liviko itself improved the protection of its vodka products last week through special labeling. All 25 of its products now carry a special hologram sticker developed in England by Applied Optical Technologies Ltd. The price of the products with the special labels will not rise, he added.

The hologram can be compared with the holograms currently used on Estonian bank notes.

At the moment, there are some 15 special devices in Estonia needed to verify a sticker placed on the cap of a bottle of vodka produced by Liviko, according to Kalvi.

Liviko has given the gadgets, which are equipped with a laser scanner and which cost a little over $200 each, to the consumers' protection department free of charge. Under the scanner, the unique label can be verified.