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Russia plans crackdown on sale of beer

* Lower parliament chamber may pass bill this week
* Bill's passage a formality -source
* Beer sales would be banned in shops 11pm-8am, from Jan. 2013
* Total ban at other locations, including outdoor kiosks
* Carlsberg shares slump 4pct; Russia is brewer's biggest market

Russia is planning further tough restrictions on the sale and consumption of beer, hitting shares in Danish brewer and Russia market leader Carlsberg (CARLb.CO).

A proposed lower parliament bill would ban all beer sales at outdoor kiosks, public transport stations, airports and petrol stations, which account for around one-third of national sales.

The bill, which would become law from January 2013 if approved, would also prohibit shops from selling beer between 11pm and 8am.

Shares in Danish brewer Carlsberg (CARLb.CO) slid 4.21 percent by 1450 GMT on concerns that Russia, its largest single market, would pass the law.

Carlsberg owns the best-selling Baltika brand and has an overall 40 percent share of the Russian market.

Part of the government's long-running campaign to curb alcoholism, the move comes less than two years after an unexpected trebling of beer excise duties caused an outcry among brewers.

Beer sales are yet to recover to pre-financial crisis levels due to the tax rise, which was passed on to drinkers. Carlsberg CEO Jorgen Buhl Rasmussen told Reuters last month he hoped Russians switching to beer from vodka would aid market growth.

FORMALITY

A beer industry source told Reuters the lower parliament, the Duma, may pass the bill this week, before the summer recess.

The bill would then have to be endorsed by the Federation Council upper parliament chamber and signed into law by President Dmitry Medvedev.

"In fact the bill has already been passed," the source said speaking on condition of anonymity. "The bill has been approved during its discussion. Only the voting remains, which is rather a formality."

Other major brewers operating in Russia are Anheuser-Busch InBev , SABMiller and Heineken .

"We support the ban of beer sales at night, especially as we have been granted a grace period," Kirill Bolmatov, director for the government relations of SABMiller Russia, told Reuters.

"The volume sold through kiosks will be redistributed and sold in supermarkets, restaurants, bars and cafes."

He said the ban on beer consumption in public places may hit sales volume significantly in the short term, but added the company understood the logic behind the decision.

"I believe it will have a short-lasting effect. We understand how drinking beer in the streets irritates people, therefore we do not complain," Bolmatov said.

Russia last introduced restrictions in 2005, banning beer consumption on public transport and various public places.

7 Jul. 2011

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