MOSCOW, July 31 (RIA Novosti) Consumer rights watchdog obliges Russian laser show promoters to get permits / Russia to put up prices of strong drinks from 2009 / Crocodiles on the run in Russia / Antimonopoly regulator to simplify investigation of price fixing / Evraz keeps its ground so far /
Kommersant
Consumer rights watchdog obliges Russian laser show promoters to get permits
A letter signed by Gennady Onischenko, chief of Russia's consumer rights regulator Rospotrebnadzor, says laser show organizers will have to submit laser equipment performance data, manuals, an allocation scheme and laser beam trajectories before being allowed to put on a show.
The measures come after a laser at the Aquamarine Open Air Festival caused irrevocable retinal injuries to several dozen people, all of whom were diagnosed with retinal haemorrhage. Victims say they were hospitalized with a 70% loss of sight, and discharged with 30% damage from which they will never recover.
The injured say they submitted a mass petition to the Prosecutor-General's Office demanding an inquiry and reimbursement for moral and physical injury. The case was handed over to the prosecutor's office in the Vladimir Region. Anna Senkova, senior aide to the local prosecutor, said Wednesday that no criminal case had been initiated, as pre-prosecutorial activities were still under way.
On July 19, a few days after the incident, it was established that the trance music festival where the injuries occurred had been organized by the the Cosmic Connection promotion company. The company's representative, Alexander Pogosyan, also known as DJ Sashi, said, "the laser show was commissioned from a firm possessing all the necessary security certificates, but the firm responsible for the laser equipment used software which caused the beams to drop down occasionally."
Russian laser show organizers say the Aquamarine incident and the response by the authorities will primarily hit legitimate businesses.
"Rospotrebnadzor had to respond to the scandal, and they did, though they have no clear idea of what they want from us," said Valentin Vasiliev, chief of a laser show firm EQ. "We have no idea who or how they will give permission to us, but there will be more problems and it will hit the business. Promoters who organize events for a few hundred people will go on with their parties without any approval from the authorities."
Rossiiskaya Gazeta
Russia to put up prices of strong drinks from 2009
In the first six months of 2008, Russians drank 71.6 million decaliters of alcohol, according to the National Alcohol Association. Not undiluted, but mixed in all sorts of drinks, mainly strong ones. But next year we may see a change in the pattern. Low alcoholic drinks will become a better economic proposition.
In the meantime, the consumption of vodka and other spirits dropped only by 1.7% in the spring and summer, while in the rest of the world the public typically opts for wine and beer in the warmer seasons.
But from January 1, 2009, Russia is raising excise duties on strong drinks, especially vodka. The state's share of a bottle's price - which makes up the excise - is considerable. So the pleasure of tossing off 100 grams of vodka will cost more.
Vadim Drobiz, head of the Center for the Study of Federal and Regional Alcohol Markets, says that a bottle of the lowest-priced over-the-counter vodka will cost 93 rubles next year, against the current 85 rubles. Remembering that excises have been raised over the past three years in stages, in 2010 the same bottle will cost more than 100 rubles and in 2011, over 109 rubles.
Some of the alcohol producers have resisted tooth and nail the adoption of amendments to the Tax Code that set the excise ball rolling. They went so far as to say that a few of them would stop paying anything to public coffers and go "into the shadows."
Vodka manufacturers proposed that the excises be lowered. One can understand them - their profit from a bottle of vodka is 3% and they have no way of cutting the price further down unless they want to lose their custom or reduce production.
Traders have more scope for maneuver. Wholesalers and retailers claim 40% of the cost of the half-a-liter bottle. But it seems they are not likely to maneuver, at least not until a law on the fundamentals of state regulation of trade is passed. But the law is still in the works.
Incidentally, under-the-counter vodka is bottled from the same vessels as over-the-counter one. This is done at the same distilleries, but only during the third shift - this vodka makes about one-third of market. But there is a difference: under-the-counter drinks pay no taxes or excises, and their sales bring benefits all around - producers have higher profits and consumers pay less. The losers are the ones financed out of the budget, because the treasury gets nothing. The current price of under-the-counter vodka is 55 rubles per bottle.
Two years ago the Finance Ministry tried to plug all avenues for under-the-counter and surrogate alcohol. To keep track of every drop of alcohol produced in the country, the Unified State Automated Information System (EGAIS) was introduced. The idea was that counters installed at distilleries would send data to a certain computer brain on how much ethanol was produced and to whom it was sold. Developers boasted that it was like launching the first sputnik - no one else had attempted anything like that. But the sputnik failed to take off. One piece of equipment quarreled with another, servers would not stand the strain, while counters went mad. Now part of the alcohol bypasses the system, and distilleries are obliged to replace government counters with better ones purchased with their own money.
Experts are low-key in their comments: "The system is being reconfigured." A lot of water will flow under the bridges before EGAIS is able to perform its mission, specialists believe. Still, the number of deaths from alcohol poisoning is dropping - it has fallen by almost 10,000 in the last couple of years. An achievement, if a small one.
Novye Izvestia
Crocodiles on the run in Russia
Police in Krasnoufimsk, in the Sverdlovsk Region in the Urals, yesterday caught a crocodile that had escaped from its owner.
Animal protection organizations say crocodiles on the run can be found in summer in nearly all Russian regions. Experts say the reptiles are especially dangerous in the hot season, something their amateur owners fail to take into account.
Exotic reptiles became popular in Russia in the late 1990s, when hundreds of crocodiles were legally imported and smuggled into the country and sold for at least $10,000 per reptile. Crocodiles became the symbols of hundreds of security agencies and restaurants. As the fad lost attraction, their owners became lax in guarding them, which sometimes cost them their lives.
In the last two years, police and animal rescue groups had to track down and catch about 15 crocodiles on the run, the latest of them in Krasnoufimsk. Several days before, Crocodile Felix, who escapes almost every summer, was caught in its usual lair, near the stadium in Perm in the Urals.
In May this year, guests in a restaurant saw a crocodile moving among their tables and ran for their lives. In August last year, a 2-meter Cayman crocodile fell from a balcony on the 12th floor. The reptile only broke one of its teeth.
Reptiles usually escape in summer, when they become active. "Experienced owners allow their reptiles to sunbathe because they know that otherwise they would escape," says Lyudmila Ivushkina, a zoologist.
Experts warn that a 1.5-meter croc is more dangerous than a pit bull terrier. Although reptiles' hunting skills do not develop outside their natural environment, they still have instincts, which come to the fore under stress.
Vedomosti
Antimonopoly regulator to simplify investigation of price fixing
Igor Artemyev, head of the Federal Antimonopoly Service (FAS), yesterday proposed amending the Criminal Code to increase punishment for "preventing, limiting or liquidating competition" from five to six years in prison.
This will simplify the collection of proof, said an Interior Ministry officer, because the amendments legalize the tapping of suspects' conversations.
The amendments would also mean that investigators would only have to prove that the suspect had received an income exceeding 5 million rubles ($213,220) to initiate proceedings.
The draft amendments are to be submitted to the government in August, said Alexei Sushkevich, chief analyst at the antimonopoly regulator.
The FAS has redoubled its efforts after Prime Minister Vladimir Putin called on it three weeks ago to wake up and do its job actively and effectively. It has initiated proceedings against LUKoil, Gazprom Neft, Rosneft, TNK-BP, Surgutneftegaz, Tatneft, Mechel, Raspadsky Coal and Evraz Holding.
On July 25, the Kurgan division of the FAS fined Unimilk, a leader on the Russian dairy market, 16 million rubles ($682,303) for forcing a distributor to coordinate resale prices with it in writing.
Some regional divisions of the regulator initiated proceedings against several companies for abuse of the dominant position on the market of jet fuel.
Yevgeny Voevodin, a senior lawyer at CMS Cameron McKenna, said few criminal cases had been opened for violating competition legislation.
Sushkevich said it was extremely difficult to prove damages.
Igor Panshensky, a partner at the law company DLA Piper, said damage could be inflicted on an indeterminable group of persons, whereas profit is distributed among a limited number of individuals.
Ilya Rachkov, a partner with the Moscow branch of Noerr Stiefenhofer Lutz, an international law firm, said proving super-profits is much more difficult, because it entails determining which part of a company's revenues constitutes profits gained from abusing said company's dominant positions on the market.
Kommersant
Evraz keeps its ground so far
Russia's antimonopoly regulator, the FAS, yesterday announced its decision to initiate proceedings against the coal mining company Raspadsky Coal and the steel and coal mining business, Evraz Holding, for abusing their dominant positions on the coking coal market.
Raspadsky Coal, Evraz Holding, as well as mining group Mechel, which has lost one-third of its market value after Prime Minister Vladimir Putin criticized its sales policy on July 24, control over 50% of the Russian coking coal market.
The FAS claims they all sold coal in Russia at monopoly prices and forced unprofitable conditions on buyers.
The regulator initiated similar proceedings against Mechel in mid-July following complaints by Novolipetsk Steel, which said Mechel had stopped coal supplies.
A source close to the FAS investigation yesterday told the business daily Kommersant that cases could be opened against all companies that sell coking coal.
Anatoly Skryl, head of the consulting and intermediary company Rosinformugol, said the other coal producers are Vorkutaugol (part of Severstal Resource) and Belon, a subsidiary of the Magnitogorsk Iron & Steel Works (MMK).
But unlike Mechel and Evraz, coal is not a commercial product but a raw material for them. For example, Severstal Resource said it supplied coal only to its parent company, Severstal.
Evraz Group yesterday reused to comment on the news, although it said in an earlier press release that it exported less than 1% of coking coal in the first half of the year.
This reaction by the steel producer points to its fear of price fixing charges, the same as have recently been presented to Mechel. Evraz's quotations on the LSE did not change immediately after the FAS announced its decision, going down by 2.5% only by the end of the trading session.
Vsevolod Topolyansky, Alfa bank's vice president for the equities market, said this means that investors trust "the lobby of Evraz Group," whose largest beneficiary is Russian billionaire Roman Abramovich.
At the same time, the news that charges could be brought against more companies has eased tensions regarding Mechel.
First Deputy Prime Minister Igor Shuvalov said on July 29 that a repetition of the Yukos affair regarding Mechel was "improbable." As a result, Mechel's shares gained 10% that day and another 10% on July 30.
Analysts do not think steel companies will suffer much. Dmitry Smolin, an analyst at the Uralsib financial corporation, said he was surprised the FAS's ire had been directed at Evraz. He said Yuzhkuzbassugol, a subsidiary of Evraz, provided the bulk of its output to Evraz, which holds only 40% in Raspadskaya.
"I think they want coal producers to suffer for the growing steel prices, which have affected the oil sector, and for inflation," Smolin said.
In his opinion, the coal companies will pay minor fines but the FAS will strengthen its control over pricing in the sector.
Investors do not think even such minor attacks are justified.
If the government thinks high coal prices affect strategic sectors, it can subsidize their operation by using revenues from the sale of coal deposits, write Deutsche Bank analysts. They think the FAS, while trying to attain short-term goals in the struggle against growing prices, may slow down investment in the sector for a long time to come.
Evraz Group S.A. is one of the largest vertically integrated steel, mining and vanadium businesses in the world. In 2007, it produced 16.4 million metric tons of crude steel, 12.6 million metric tons of pig iron and 15.2 million metric tons of rolled products.
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