In a watershed moment for inverse deflation watchers everywhere, Russia, and specifically its alcohol watchdog entity aptly named "Rosalkogoluregulirovaniye" just delivered the judgment blow, with a decision to hike the minimum vodka price by 36% in 2013... as if a million cirrhotic livers cried out (or was it rejoiced) and were suddenly silenced. The reason for this shock and awe approach to defeating deflation: fighting counterfeiting, by hiking the tax on alcohol purchases, which in turn will push the baseline price of alcohol everywhere higher. In other news, a lightbulb is slowly lighting up above the president's head: "new taxes -> booze -> "fairness doctrine" -> bingo" as vice taxes are set to surge in a banana republic near you. Remember: "that's a tax for that" and if there isn't yet, there will be.
From Moscow News [3]:
Russia’s alcohol watchdog is to fight counterfeit alcohol by raising the minimum retail price for vodka, following similar measure regarding shampanskoye.
The cheapest vodka in Russia could cost 170 rubles for half a liter from January 1, 2013, according to an order project by Russian alcohol watchdog Rosalkogoluregulirovaniye (RAR), Prime reported.
Thus the price of the cheapest vodka in Russia’s shops could rise by 36 percent, from the current 125 rubles.
It is more than the rise of tax, from 300 to 400 rubles (25 percent) per liter of spirit from Jan. 1 2013.
The planned minimum price from producers, according to the project, can be 132 rubles, with prices starting at 138 in wholesale sector.
The lowest retail price for other spirits will also rise. Minimum price for cognac will go up 28 percent, from 219 to 280, brandy will become 31.5 percent more expensive, from 190 to 250.
Elsewhere, Bill Dudley was last seen on a soapbox in Gorkyi Park, telling anyone who listens that vodka prices may be soaring, but the hedonic adjustments on the iPad 4 (or is it 5 now?) make it more than fair, and deflation is everywhere, as far as the bloodshot eye can see.
And now, Russian drunk Fight Club:
Sadly, it also means less "Need for Speed: Moscow"