According to the estimates by the Union of Cognac Producers and other experts, 40% of the cognac sold in the Russian market is fake, the union chairman Vasily Goncharov said addressing the meeting of the Federal Antimonopoly Service’s expert council for developing competition in the alcoholic beverage market.
Goncharov noted that unscrupulous competition is currently carried out through two methods: selling counterfeit and fake beverages. Counterfeited products are produced illegally, without excise duty and other taxes paid. Russia’s Federal Service for Alcohol Market Regulation (Rosalkogolregulirovaniye) takes efforts to counter such violations, he said.
“At present, fake cognac is the product that is sold legally, with all taxes paid and all necessary documents available, but it cannot be named cognac. This can be cognac drink or cognac-flavored bitters, but not cognac per se”, Goncharov clarified.
A mechanism of introducing minimum sale price could help combat fake beverages sales. The current price for a 0.5-liter bottle of cognac is RUR 371 ($5.5). In October, the Ministry of Finance suggested increasing the price to RUR 388 ($6); however, the Union of Cognac Producers believes that the minimum price should be RUR 493 ($7).