NEW HEALTH WARNING LABEL FOR WINE AND SPIRITS

UNCLAS SECTION 01 OF 02 MOSCOW 000563

SIPDIS

SENSITIVE
SIPDIS

DEPARTMENT FOR OES/IHA AND EUR/RUS
USAID FOR GH, E&E
HHS FOR OGHA
USDA FOR FAS/OCRA FLEMING, THOMAS OGA LUCHOK
STATE PASS USTR FOR MOLNAR, KLEIN, DWOSKIN AND OWEN
BERLIN ALSO FOR LABOR COUNSELOR HAGEN

E.O. 12958: N/A
TAGS: TBIO EAGR ETRD SOCI RS
SUBJECT: NEW HEALTH WARNING LABEL FOR WINE AND SPIRITS

REFS: A. 06 Moscow 9824

B. 06 Moscow 12348

MOSCOW 00000563 001.2 OF 002


THIS CABLE IS SENSITIVE BUT UNCLASSIFIED. PLEASE PROTECT
ACCORDINGLY.


1. (SBU) SUMMARY: A new label for bottles of wine, vodka, and other
spirits warns consumers of the dangers of alcohol consumption by
certain vulnerable groups, including minors, pregnant women, and
nursing mothers. The government is delaying enforcement of the new
law and giving producers and distributors time to comply, which
should avoid most of the chaotic supply disruptions that followed
last summer's implementation of a new excise stamp system for wine
and spirits. From a health perspective, the new warning label is
unlikely to have any effect on drinking habits or contribute to
improving public health, and, from a trade perspective, it has led
to confusion among retailers and domestic and foreign producers.
END SUMMARY.


2. (U) As of February 1, producers of wine, vodka and other spirits
must affix a label to all bottles warning consumers about the
dangers of alcohol consumption to minors, pregnant women, and
nursing mothers, and those with diseases of the nervous and
digestive systems, the liver, and kidneys. Previously, generic
labels were required, but there was no agreement on the standard
language. The government only approved the new specific wording on
January 19, so producers and distributors had trouble meeting the
February 1 deadline. Chief Medical Officer Gennadiy Onishchenko,
who is also the head of the Federal Supervision Service for Consumer
Rights and Human Well Being (Rospotrebnadzor),stated in an
information letter on his web-site January 30 that, as long as some
form of health alert was affixed, inspectors would not remove
bottles from circulation for the time being. Various Russian
Ministries have intervened publicly since Rosprotrebnadzor announced
the label change, objecting to the label's wording and its
introduction.

Dubious Public Health Measure
--------------


3. (SBU) From a public health perspective, it is laudable that the
government is pointing out the dangers of drinking to certain
vulnerable groups. We suspect the government also wanted to take
some action to combat the dangers of alcohol poisonings, which
received much public attention in 2006 (Reftels). However, the new
regulation contains a huge loophole, in that no health warnings are
required for bottles of beer. (Note: The beer industry has blocked
several legislative proposals put forward by the vodka lobby to
treat beer like other alcoholic beverages. Beer is currently
classified as a soft drink. End Note.) There is also no minimum
size for the health warning, and many of the labels we have seen on
store shelves would be difficult to read without a magnifying
glass.


4. (SBU) Russia's leading expert on alcohol and public health, Dr.
Aleksandr Nemtsov of the Moscow Institute of Psychiatry, told us the
new label is unlikely to have any significant impact on societal
drinking habits. He noted that similar health warnings on tobacco
products have not significantly changed smoking patterns in Russia.
He regretted that cardiovascular diseases were not mentioned on the
warning label, since those illnesses are the main health consequence
of drinking. In his view, the Ministry of Health and Social
Development developed the label language without consulting
experts.

Onishchenko Weighs In on Beer, Health and Labeling
-------------- --------------


5. (SBU) In a candid meeting February 7, Onishchenko acknowledged
the new label would have a minimal impact on people's behavior. He
also expressed his deep disappointment beer is not treated like
other alcoholic beverages. He characterized the beer industry as an
"irresponsible business," noting that some beer contains as much as
16 percent alcohol, though "natural" beer production should never
result in a product containing more than six percent alcohol. He
also observed that alcoholism from beer drinking was a serious
problem in Russia. Despite his health-based arguments to regulate
beer, he had only succeeded in convincing the government to
introduce a limited ban on television advertising for beer products,
which now can only be shown after ten in the evening.


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6. (SBU) Onishchenko stated the alcohol industry had been trying to
stir up scandal in the implementation of the new health warning
label. He noted he had met with the association of alcohol
producers to discuss how best to transition to a new labeling
system. Producers had stated they would need six months to comply,
and Rospotrebnadzor had explained producers could continue to use
the old health warning labels in the interim. He did not anticipate
any supply disruptions for domestic product. Dr. Onishchenko showed
no awareness about imported products and did not consult that market
sector before acting, even though Russia imports $1.2 billion in
alcohol annually. While domestic producers were warned in advance
that a six month changeover time would be acceptable,
Rospotrebnadzor did not publicly announce the implementation delay,
and importers were left in the dark.

Confusion for the Alcohol Market
--------------


7. (SBU) It is welcome news that the government appears willing to
grant producers and distributors time to comply with the new law to
minimize possible supply disruptions like those last summer that
followed the chaotic implementation of a new excise tax stamp system
for wine and hard alcohol (Reftels). Russia continues to regulate
alcohol inconsistently, with insufficient communication and
coordination among customs, economic, agriculture, justice and
health ministries. Embassy industry contacts have no clear guidance
on applying the new laws. Despite GOR statements that
implementation of the new law will be delayed, wholesalers report to
us that retailers are asking that bottles carry the new labels, out
of fear that local officials will levy fines against them and
confiscate bottles. Unlabeled alcohol was removed from some store
shelves last week, but has returned over the last few days.


8. (SBU) If Russia were a WTO member, the implementation of the
health label law arguably would be inconsistent with the Technical
Barriers to Trade Agreement, including the notice and comment
provisions. It will be more difficult for foreign producers to
comply with the new regulation, since they will either need to
segregate production destined for Russia and affix the new label at
the point of production or an intermediate storage warehouse, or
unpack and label bottles after they have been shipped to Russia.



9. (SBU) Comment: Confusion in the alcohol market is likely to
continue in 2007. The Duma has announced it will consider a new
alcohol monopoly, and it may include some additional regulation of
retail sales. Trade contacts are preparing themselves for further
shocks from this proposal. Russia continues to set alcohol policy
without sufficiently considering how these changes will affect
foreign products.

BURNS