Belarus: Tobacco and alcohol still controlled by the state

Belarusian President Alexander Lukashenko has said that the state will retain control over the tobacco and alcohol sector. The leader noted the importance of the sale of these two products in the Belarusian budget, ignoring the social costs associated with tobacco and alcohol consumption.

Alexander Lukashenko’s decision to maintain state control over the tobacco and alcohol sectors was announced when Andrei Demidovets was approved as CEO of Minsk Kristall Group, a distillery controlled by the Belarusian government. The leader believes that state control of these two sectors is a guarantee of quality and prevents the proliferation of a black and artisanal market. Moreover, although Lukashenko says that these products are closely linked to the health of Belarusians, they are nonetheless essential for the state budget.[1].

Alcohol consumption in Belarus is a cause for concern

Existing consumption data show high levels of alcohol consumption in Belarus. The former Soviet republic is considered one of the countries with the highest alcohol consumption. With 17.5 liters of pure alcohol consumed per capita per year, Belarus even ranked first in the world in 2010. According to one study, the inconsistencies in policies against alcohol consumption, particularly in tax policies, the continuous increase in the standard of living of Belarusians during the 2000s and the lower increase in the price of alcohol compared to necessities are the main factors explaining the high levels of consumption recorded at that time. For example, in 2008, the price of a bottle of vodka was lower than that of five liters of milk.[2]Since 2011, however, alcohol consumption, particularly vodka, has fallen to 11.2 litres per year per capita, a level equivalent to that of the United Kingdom.

Tobacco production controlled by Belarusian authorities

Following the collapse of the Soviet Union and the liberalization of the economy, Lukashenko opposed the privatization of the tobacco sector, effectively thwarting plans by British American Tobacco and RJ Reynolds to create a joint venture[3]. In fact, most of the production is carried out by the Neman (Нёман) company, a joint-stock company controlled by the state. However, in 2018, the Belarusian leader decided to give the exclusive wholesale rights for all cigarettes manufactured by Neman to Aliaksei Aleksin, an energy tycoon who heads the Energo-Oil company. According to a network of investigative journalists (OCCRP), Aleksin in return donated various luxury vehicles and offered a security service to Lukashenko, for a total value of $1.7 million.[4]. According to OCCRP, Aleksin’s wholesale takeover of the factory coincided with a record increase in the number of cigarettes manufactured in Belarus and smuggled into the European Union from Lithuania, with which the country shares a long land border. In 2020, Lithuanian authorities seized 17.2 million packs of contraband Belarusian cigarettes, compared to just 4.8 million in 2017. Despite ratifying the WHO Framework Convention on Tobacco Control (FCTC) in 2005, Belarus has worrying levels of tobacco use, with 50.21% of men smoking and over 231% of women. Until 2021, British American Tobacco was one of Neman's main business partners in Belarus, leading many to protest outside the manufacturer's headquarters during the 2020 presidential election protests.

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[1] Tobacco Reporter, Belarus To Retain Control Over Tobacco, 03/12/2024, (accessed 04/12/2024)

[2] Grigoriev, P. and Bobrova, A. (2020), Alcohol control policies and mortality trends in Belarus. Drug Alcohol Rev., 39:805-817. https://doi.org/10.1111/dar.13032

[3] Gilmore AB, McKee M, Tobacco and transition: an overview of industry investments, impact and influence in the former Soviet Union, Tobacco Control 2004;13:136-142.

[4] OCCRP, Soon After Taking Over Belarus' Tobacco Industry, Oligarch Donated Luxury Cars to Lukashenko Regime, 11/29/2021, (accessed 12/04/2024)