Vodka is already a major employer – at least 2,000 people work in the bottling plant of Ayu, the local market leader. But trade in fake excise stamps is said to be flourishing, meaning the government is missing out on much-needed revenue. According to the Economics Ministry, the sector contributed just $7.5 million in taxes last year. Officials estimate that 72 percent of Kyrgyz vodka is distilled in the shadows and goes untaxed.
The heartbeat of local vodka is undoubtedly Ayu, producers of Shpilka (Stiletto), a brand enjoying moderately successful sales in the United States. Local media outlets portray the firm’s ultimate beneficiary, MP Sharshenbek Abdykerimov, as a kind of Kyrgyz Rockefeller, capable, as the local newspaper De Facto wrote last year, of “finding a common language with any government” to protect and expand his business interests.
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At the beginning of this year, six of nine domestic producers lost their licenses when they failed to meet the minimum 100,000-decaliter annual requirement introduced in 2009 for vodka producers. Some media have accused the family of the former president, Kurmanbek Bakiyev, of having a hand in the legislation, and of colluding with major producers to drive smaller rivals out of business.
Pressure was “much worse in the Bakiyev period,” recalls Mirlan Sadykov, director of Alsuu. Sadykov accuses his competitors of having “state inspectors check on other businesses and paying newspapers to write dirty articles about other vodka companies” prior to the riots that ushered out the Bakiyev family in 2010.
The vodka wars are not entirely over, says Kurenkeyev of The Association of Alcohol Producers, noting that producers of other liquors do not face any minimum production requirements. The sector is still defined by a “small group of men playing cat and mouse,” he told EurasiaNet.org. “The losers are the state and the market.”