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Russia cracks down on vodka kingpins in tax scam

Russia cracks down on vodka kingpins in tax scam


Source: RT.com

17 Feb, 2016


Armed FSB and Federal Tax Service officers have raided Russia’s largest vodka bottler and several Caucasian liquor producers in a massive tax evasion case, business daily Vedomosti reports.


A hundred law enforcement agents including a special tactics group and an armored personnel carrier were involved in the raids.


Since the 1990’s, vodka production has been one of the most dangerous businesses in Russia and has long been suspected of connections to organized crime.


According to the newspaper’s federal sources, the FSB acted on behalf of Russian President Vladimir Putin.


The company in question, Status Group, controls 18.4 percent of the Russian vodka market by volume terms and 15.1 percent in monetary. The company sells mostly cheap vodka brands – at 185 rubles ($2.5) per 0.5 liter – the minimum price allowed by Russian law.


The 11 Caucasian liquor producers are in the Kabardino-Balkarian Republic. They allegedly used a scheme to avoid paying about 23 billion rubles (about $300 million) in taxes in this region alone.


However, at the moment there are no tax claims against Status Group. The company was buying vodka from local wholesalers that got the alcohol from the liquor producers.


While the company in question produces legal vodka with a legally obtained license, damages from illegal alcohol are much higher; Vedomosti quotes a source in the Finance Ministry. According to the publication’s sources, the issue is under personal control of President Putin, and this and other illegal schemes will be shut down.


The owners of Status Group have not been disclosed. According to business media RBC, the company is owned by Vasily Anisimov, a former co-owner of Metalloinvest.


He is thought to have a $2 billion net worth. A spokesman for Anisimov claims he is not a shareholder in Status Group and has nothing to do with the company.