It could be argued that 1998 is the 600th anniversary of the arrival of vodka in Russia. One 19th century source on Russian culture, food and folkways notes that "it can probably be supposed that vodka appeared here no earlier than 1398, when the Genoese began shipping vodka to Lithuania and acquainted us with the pernicious drink."

If this is the case, then it took several decades for this "pernicious drink" to take root in Russia. For most contemporary experts cite the mid- to late-1400s as the time when vodka began to be distilled in Russia. Within another 100 years, the state was starting to move in and set up a monopoly over the production and sale of vodka that would last -- but for a thirty year hiatus -- for the next four centuries. Over that period, vodka has come to play a vital role in Russian culture, in the financing of the Russian state, and, sadly, in the destruction of families and individuals due to alcoholism, abuse and accidents.

The Russian Drink

Many nations of the world have a singular drink that they have come to be identified with and that has come to be identified with them. For the French it is wine; the British and Germans have beer; the Japanese have sake; the Norwegians have aquavit. And, for Russians (and Poles, Belarusans, Finns and Ukrainians), it is vodka.

Perhaps no other spirit would have been so compatible with the Russian soul. The subtle lithesomeness of wine, best taken in the open air with fine cheese and warm bread, is a bad fit with Russia's long winters and short growing seasons. While beer has enjoyed popularity in Russia through the ages (and has seen a recent growth in popularity, see Russian Life, October 1997), it is simply not a "serious enough" drink. It does not pack enough punch to unleash true feelings and passions.

But vodka, so pure and purposeful, so ideal for warming the despondent soul in February or for cooling passions in August, is a feast or famine sort of drink. One would expect something like vodka to arise from a Northern culture with a communal peasantry, where long winters and tortuously short growing seasons meant back-breaking labor intermitted only by community-building social feasts and drinking bouts. What is more, the unique ability of vodka (unlike wine or beer or even mead) to act as an accompaniment to any manner of feast or food (whatever is on hand), plus the fact that it can be distilled from any type of grain or organic matter (again, whatever is on hand), makes it all the more welcome. And, when it was discovered that the best vodka resulted from filtering with birch charcoal (not oak or pine, but birch, the tree of the Russian taiga), well, what more need be said?

The Tsars' Vodka

The growth of vodka distilling at the end of the 15th century was brought on by advances in distilling technology and new surpluses of grain, thanks to the introduction of crop rotation. Not surprisingly, at about this time, state and tsar began to take an interest in vodka. s earning power. Whereas Grand Prince Ivan III (1462-1505) had completely forbidden the production of strong spirits, Tsar Ivan IV ("the Terrible," 1533-1584) built the first kabak (tavern) for his oprichniny (palace guard) in Moscow, on the Balchug. Tradition has it that Ivan saw Tatar kabaks during his siege of Kazan (1552), and he decided to use the same principal of state-owned distilleries/taverns as a way to control the trade in spirits while profiting from them. Still, Ivan IV did not love drinking, and he restricted drinking in kabaks (which spread throughout the country during his rule) to Holy Week, Christmas and "Dmitry's Saturday" [until 1769, an October holiday to remember those killed in Dmitry Donskoy. s famous Battle of Kulikovo field; after 1769, the day was moved to August 29]. At all other times, public drunkenness could lead to a prison term.

Tsar Fyodor (1584-1598), who succeeded Ivan IV, led a drive to tear down kabaks. But Boris Godunov (1598-1605) recognized the economic value of the vodka trade and ordered expanded building of kabaks, even allowing vodka to be purchased and taken off the premises.

By the early 1600s, the smallest towns and villages had their kabak, often called a kruzhechny dvor (derived from kruzhka, the tankard used to measure wine, and dvor, meaning courtyard). The end result was rising drunkenness, which Tsar Mikhail (1613-1645), the first Romanov tsar, combated with limited prohibition. Like Fyodor, he moved to tear down the kabaks, establishing drinking houses where wine was sold only on the premises. The tide turned again with the ascension to the throne of his son, Tsar Alexis (1645-1676), who allowed the building of one kabak in every town (and three in Moscow), which eventually multiplied of their own accord.

Perhaps more significantly, Tsar Alexis codified and institutionalized the state's monopoly over alcohol production and sale in his famous Law Code of 1649. Private production was to be punished brutally and all revenues from the sale of vodka went directly to the royal coffers.

This arrangement would continue more or less unchanged for nearly two hundred years, until another round of reforms, in 1861, removed the state monopoly on vodka production and sales, replacing it with an excise system. This hiatus of state control lasted just 33 years, but that was enough for some enterprising individuals -- most notably Pierre Smirnoff -- to become rich in the distilling business. In 1894, the state again gradually began to impose a state monopoly that was fairly complete by the time WWI began.

Temperance, Or Not

During WWI, Tsarist Russia imposed a "dry law," which sought to keep army recruits sober enough to fight. And when the Bolsheviks stole power in 1917, they extended prohibition on ideological grounds, arguing that the tsarist state sought to keep its subjects docile through liberal distribution of vodka, which may not have been that far from the truth. Catherine II, Stephen White notes in his book, Russia Goes Dry, once supposedly commented that a drunken people is easier to rule. Vladimir Lenin, a teetotaler, saw alcoholism as a disease that would keep Russia from moving forward to communism. As White writes, Lenin said the proletariat, "had no need of intoxication, it derived its  strongest stimulant to struggle from its class position and from the communist ideal; and what was needed was clarity, clarity and once again clarity..." In 1922, at the 11th Communist Party Congress, Lenin would declare that there would be "no trade in rotgut."

By December 1919, new laws were enacted to severely punish private production of strong spirits. Not that this was highly significant: according to White, at least a third of rural households were likely engaged in illicit distilling of alcohol in the 1920s. The government stepped up its anti-alcohol campaign for a time but eventually admitted defeat. In 1925, private homebrewing (the making of samogon) was allowed, as long as it was not intended for sale, while the state monopoly over production and sales continued. Henceforth, the battle against increasing alcohol consumption (by the late 1920s, White reports, the average urban family spent 14% of its income on alcohol) was mainly fought through education and propaganda.

Forced industrialization would put an end to this battle. Once again, a Russian leader chose to use revenues from vodka to finance growth and national defense. By the end of 1930, Stalin, now firmly in control, ordered expansion of vodka production. By the late 1930s, the strength of vodka (which had previously been kept at 20%) was allowed to rise to its "natural" level of 40%. As White writes, by 1940, "there were more shops selling drink than meat, fruit and vegetables put together." During the war, vodka was issued to troops as part of their rations.

Vodka And the State

Stalin's move is not surprising. Since Ivan the Terrible established the first kabak in Russia, the Russian state has used proceeds from vodka sales to further its domestic and foreign agendas. And the Russian public has repeatedly obliged the leadership by consuming vast amounts of vodka. In the last century, upwards of 40% of all state revenue came from alcohol duties and sales. In this century, toward the end of the Soviet era, some estimates put vodka sales at 15-20% of the value of all retail trade turnover. Obviously, the state could not afford to ignore this "lucrative" source of revenue -- vodka production between 1940 and 1985 more than doubled (beer more than quadrupled and wine increased over eight-fold).

But the costs were very real. From the 1940s to the 1980s, consumption of alcohol quadrupled in the Soviet Union. One independent study cited by Stephan White estimated that 15% of the Soviet population in the 1980s could be called alcoholic. The effects on society are not hard to imagine, if painful to elaborate. White offers an exhaustive portrait of the social costs of increased alcohol consumption from the end of WWII to the present day: alcohol abuse became the single largest cause cited for divorce; by the late 1970s, life expectancy for Russian males had dropped to just 61 years; between 1960 and 1987, there was a population loss due to alcohol abuse in Russia of some 30-35 million persons; 74% of all murders committed in the early 1980s were committed under the influence of alcohol, as was the same proportion of rapes; in the early 1980s, 75-90% of absences from work were related to alcohol; economic production was said to drop by up to 30% following weekends and paydays; by one estimate, the economic losses from alcohol abuse in the 1980s were three times the amount taken in through taxes on alcohol.

Certainly, it would be wrong to associate the free availability of vodka as the singular cause of these societal abuses. Also at the root of this social malaise in the 1970s and 1980s was massive societal depression brought on by an untenable socio-economic system, by the "stagnation" and moral vacuum that the empty promises and apathy of late sovietism wrought. When you are living in a lie, escapism is a natural reaction.

But, long before the arrival of totalitarian communism, vodka had a dark influence on Russian culture. The state. s dependence on revenues from alcohol sales have encouraged alcoholism and abuse for hundreds of years. As Adam Olearius, a member of the Holstein Embassy to Russia in the 17th century wrote, "the vice of drunkenness is prevalent among this people in all classes, both secular and ecclesiastical, high and low, men and women, young and old ... None of them anywhere, anytime, or under any circumstances lets pass an opportunity to have a draught or drinking bout. They drink mainly vodka, and at get-togethers, or when one person visits another, respect is rendered by serving one or two cups of wine, that is, vodka."

Misha's Campaign

Fighting this vice (and repairing gashes in the social and economic fabric of the Union) was the impetus for Soviet President Mikhail Gorbachev's anti-alcohol campaign of the late 1980s. This attempt to make an alcohol loving (and dependent) country go cold-turkey (lucidly detailed in Stephan White's aforementioned book) was a vast political failure. It contributed perhaps even more than the loss of empire to the disdain with which Gorbachev is held in Russians' eyes. The campaign, which cut back on production and restricted sales and distribution of vodka as well as beer, wines and other spirits, succeeded in bringing about declines in official sales of vodka (cut by nearly half) and other alcohol products, as well as in actual consumption (estimated at a 25% decline between 1985-6). But the response from the public was increased production of samogon, which created a huge sugar deficit, increased deaths due to alcohol poisoning and decreased work efficiency by other means -- huge numbers of Soviets were waiting in lines to get vodka or wine.

What is more, the campaign against alcohol consumption, insofar as it was effective, freed up purchasing power among consumers that would have otherwise been spent on alcohol. This, combined with the fall-off of revenues to the state from a decline in alcohol sales, contributed to massive shortages of all manner of consumer goods in the economy.

There were some gains, however, most notably in the health of the population. Life expectancies stabilized, birth and death rates dropped, alcohol-related deaths on the job and off went down and the birth rate went up. Divorces declined. But, as admirable as these changes were, the public was gravely dissatisfied with the means to these ends; Russians resented sobriety by government decree. And the government, for its part, was executing its anti-alcohol program unevenly, and on the sandcastle foundation of seven decades of socialist falsehoods. So it was little surprise that, as early as 1987, the cash-strapped Soviet government began relaxing many of its restrictions on sale and distribution. By 1990, White writes, the level of alcohol consumption had bounced back to its pre-campaign levels.

Enter the Market

As in many spheres, the disintegration of the Soviet Union and the collapse of the command economy changed the alcohol market radically. In the early 1990s, poorly executed "shock-therapy" reforms subjected the population of the Soviet Union and then Russia to a prolonged bout with hyperinflation. The state needed medicine to keep the beleaguered population at bay. Cheaper vodka was one answer. According to a recent report by the Rand Corporation and Moscow's Center for Demography and Human Ecology, between 1990 and December 1994, consumer prices in Russia increased by 2,020 times for all goods and services, by 2,154 times for food products but by only 653 times for alcoholic beverages.

The other supposed answer was "free" vodka. In 1992, Russian President Boris Yeltsin signed a decree abolishing the 68-year-old state monopoly on the production, import and sale of vodka. It was replaced by a system of free production and trade of hard liquor based on licensing. This was a very Russian solution to the problems of the monopoly -- to completely overturn the status quo rather than tinker with it. The Financial Times predicted at the time that "the lifting of the state monopoly on vodka is political suicide for a country where economic and other difficulties provoke the people. s desire to drown them in wine."

Market Players

After state control over the production, import and sale of vodka was loosened, distillers, importers and retailers (in the form of kiosks), sprouted like mushrooms after a rainstorm. At present, according to renowned alcohol expert Igor Serdyuk, there are some 1,300 licensed vodka "players;" some 250 vodka brands are registered with Rospatent.

Meanwhile, "top dogs" in the market shift from month to month. The once-fashionable Kremlyovskaya, one-time sponsor of high-profile events like the Kremlin Cup tennis tournament, now struggles to stay afloat. Food and vodka baron Vladimir Dovgan built a lucrative business by introducing the notion of franchising to the Russian market, winning him a prestigious cover story in Russia Review earlier this year. But, at press time, there were reports that the famous Dovgan empire is being shaken by internal squabbles and debt. Vladimir Dovgan himself is currently trying to prove in court that his face, featured prominently in the corporation. s advertising and trademarks, has nothing at all to do with him.

One distiller that seems to be rising above the fray is Kristall, founded in 1901. Kristall, like all distilleries has been hit hard by bootlegging and government policies alike. At one point, annual production plummeted from 13 million dcl (prior to Gorbachev's anti-alcohol campaign) to just 2 million dcl. But the distillery recently introduced new (supposedly fake-proof) bottles and is staging a comeback.

Foreign Vodkas

One absurdity, played out in other consumer spheres with the opening of the market, was the mass influx of Western vodkas. Consumers in the land that invented vodka began flocking in droves to international favorites like Finlandia, Absolut and Smirnoff. But the state, hard pressed to protect local producers (and knowing a good tax base when it sees it) has started introducing severe licensing and excise taxes on imports -- a move which will surely raise import prices even further.

Another problem brought on by the influx of imports has been exemplified by the Smirnoff vs. Smirnov dispute. Internationally-known Smirnoff vodka is a trademark and recipe that, over the course of this century, passed from emigre descendants of 19th century vodka baron Pyotr Smirnov to now be owned by the huge distilled spirits company IDV. But, when IDV decided to go into the Russian market (returning Smirnoff to its homeland, so to speak), it ran into one Boris Smirnov, a former KGB agent who founded a "Trade House of Pyotr Smirnov. s Descendants" and started producing "Smirnovskaya" vodka. The trademark dispute over the right to use the name of Pyotr Arsenievich Smirnov and the title of "Purveyor to his Majesty. s Imperial Court," has raged for three years. American Smirnoff has meanwhile started producing "Russian" vodka of its own at the St. Petersburg-based Liviz factory, while Boris Smirnov has, by most accounts, leveraged the "us vs. them" publicity of the long court battle to build his domestic vodka business.

The True Costs

The liberalization of the alcohol market has also opened up the bottom side of the market, letting in a flood of cheap, fake and often downright lethal vodka. Vodka consumption has been on the rise since the political failure (and public health success) of Gorbachev. s anti-alcohol campaign. According to the Russian Academy of Sciences, by 1988 the combined death toll from alcohol poisoning, cirrhosis of the liver and alcohol-induced violence and accidents was down to 179 deaths per 100,000 -- a level not seen since 1965. But by 1995, according to government data, this rate had climbed to nearly 500 deaths per 100,000 (by way of comparison, the US rate for 1995 was 77). Nezavisimaya Gazeta recently estimated that 43,000 Russians die each year from vodka poisoning alone. And in 1997, the total number of alcohol poisonings from fake wine and vodka (both fatal and nonfatal) in Russia reached 90,000.

According to estimates by the Russian Health Ministry, alcohol consumption in Russia reached 15 liters of pure alcohol per year for every man, woman and child in 1996. (Health Ministry experts concluded that, assuming most children were not drinking, adjusted adult consumption was 18 liters of pure alcohol -- i.e., the rough equivalent of 38 liters of 100-proof vodka per person, per year, vs. 8 liters per adult per year in the US).

As noted above, in the past the Russian state benefited from (and perhaps encouraged) such excess consumption. Yet that is not the case now. Budgetary proceeds from the alcohol business have plummeted to an all time low of 3%, whereas in Soviet times, the infamous pyanye dengi (drunken money) accounted for one-third of the Russian budget. The reason? Money that should have come to the state in the form of taxes instead ended up in the pockets of bootleggers or corrupt state officials.

In today's Russia, vodka supports entire regions. The republic of North Ossetia's economy is reputedly based largely on sales of illegal spirits smuggled into Russia from Georgia. Former North Ossetian president Askharbek Galazov allegedly funded his entire election campaign with money from spirit trafficking. Then there are the many "charitable" organizations, like the National Sports Fund and the Russian Orthodox Church, which have allegedly exploited their privileged, duty-free status to make a killing importing and reselling wine and/or spirits.

Dragon in the Bottle

Thus, it soon became apparent that "free" vodka was dangerous and "cheap" vodka had some very significant social and economic costs. Pressed by immediate economic concerns (months-long wage arrears, namely to the army), in 1993 President Yeltsin issued a decree restoring the "state monopoly" on alcohol production. But this was easier said than done. Once the green dragon (a Russian folk idiom for alcohol) was out of the bottle, it was virtually impossible to put it back in.

For one thing, the means to the end is different from past crackdowns. Yeltsin's "monopoly" is nothing like that of the Soviet era. It is largely one of licensing and other regulatory measures, such as excise stamps and banning alcohol advertising from TV. There are mandatory tax points at distilleries to control "illegal leaks of spirits and vodka" from factories. Special excise stamps were introduced on alcohol (although all attempts to make them technically fake-proof have been in vain). A regional registry of all licensed alcohol producers and traders was compiled. In September 1997, Yeltsin dedicated his radio address to vodka, explaining to Russians that the government. s success in bringing the alcohol market to heel is important not only for preserving the nation. s health but also for maintaining a stable budget and paying pensions on time (a reality that many observers did not appreciate).

Little by little, the new measures have started to pay off. Two or three years ago, as much as 90% of Russia. s alcohol market was widely believed to be "in the shadows." Today, this figure is down by nearly half.

Stamps Chez Luzhkov

One new trend may hold further hope for regulating the vodka market. Cities and regions are setting up control policies of there own -- not unlike State Liquor Control Boards in the US.

Moscow recently passed a resolution requiring an additional type of bar-code stamp on alcohol production. All vodka transported into the city and region is to pass through a network of special "unitary enterprises" for quality testing and bar-coding. While the State Antimonopoly Committee has spoken out against this measure, calling it a barrier to free competition, Mayor Luzhkov and his retinue proceeded anyway.

Moscow is following the example set by Tatarstan, whose authorities introduced a state "monopoly" on the production and sales of hard liquor. In Arkhangelsk, a system has been introduced requiring regional quality certificates for all vodka sold within the region's borders. Needless to say, there are special fees for certification services. In Voronezh, all vodka producers must supply their products to the Voronezh Alko enterprise, which operates under the dependable cover of the local administration. These local authorities do not hide their desire to beef up local budgets and support local vodka producers at the expense of outsiders, and under the pretext of keeping out poor-quality vodka.

But there is a problem with this new, increased local control over vodka production and sales. It will increase prices in the shops. Which, in turn, will increase the price gap between legal and illegal vodka. This gap had been narrowing in recent months, and consumers were noted to be gravitating to better-known (safer) brands sold at well-established outlets. The danger is that higher prices on "safer" vodka may once again turn Russians to cheaper, fake vodkas.

600 years after it first appeared in Russia, vodka continues to challenge to play a pivotal role in Russia, challenging both policymakers. While the specific issues may have changed somewhat, the general tensions have not. Russia cannot base a modern economy on revenues from alcohol. But it is a hard reality to avoid after so many hundreds of years of relying on the "green dragon." All the more so since vodka is become such an inalienable part of Russian culture and cuisine.

It is surely true, following the Russian saying, that there "can be too much vodka." The question is whether there can simply be "enough" vodka, and how much that is.

(c) 1998, Russian Life magazine. All rights reserved.
Originally published in the April 1998 issue of Russian Life magazine.