12:55 - 30.10.2017

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Azerbaijan has taken a number of measures aimed to liberalize and promote to business over the last few years, including simplification of the process of licensing, virtually eliminating (except for tax and other important-for-public health spheres) inspections of business activity, and creation of partner relations between business and the government.

But unfortunately, using that, some businesses not only carry out unhealthy competition, which results in the dumping of prices, but also in sale of counterfeit products and eventually that leads to a real threat to the health of consumers.

The fact that counterfeit products prevail not only at stores but also in catering and tourism facilities making, by the way, the face of the country amid large-scale development of tourism, is a significant alert for concern.

These days the State Security Service of Azerbaijan conducted a special operation, following which 619,500 units of counterfeit excise stamps. Excise stamps were imported from Georgia with the purpose for use in the manufacture of fake alcoholic beverages, whose sale is planned on the local market in the future. This is not the first such case, and its volume testifies about the quality of alcoholic beverages sold in Azerbaijan, and the immensity of the problem. Thus, the Ministry of Taxes of Azerbaijan, the governmental body exercising control over the circulation of excisable goods, revealed 44,779 unmarked excisable goods as a result of its operational control measures between January and September at 540 facilities, and in compliance of urban and district courts’ decisions the breaker entrepreneurs paid a fine in the amount of AZN 89,100.

Azerbaijan Free Consumers Union’s chair Eyub Huseynov stated that the Union has been monitoring the strong drink market for the last 15 years and this is the "dirty" segment of the market, as more than 70% of products sold are counterfeit.

"State Security Service’s last operation is the most successful in this sphere, and six people have been prosecuted and even arrested on the case. Unfortunately, this is one of many facts of import of counterfeit products and excise stamps in our country," Huseynov considers.

The State Service for Antimonopoly Policy & Consumer Protection declares it is ready to consider any complaint from consumers, but such complaints have not been reported, and this suggests that the market is so swamped in counterfeit products that consumers no longer distinguish a counterfeit product from the real one.

Meanwhile, the State Customs Committee proposes an increase of the excise rates and links that with measures aimed at stimulating the domestic production.

Strong drink importers have immediately reacted to the proposal to increase the excise tax and think this measure will stimulate the growth of the market of counterfeit products.

The importers suggest replacement of the increase in excise tax rates with tightening and optimization of mechanisms of control over the circulation of excisable goods, and apply a mechanism to monitor circulation of alcoholic beverages from the date of manufacture or import until its buying by the end consumer.

Also, it is proposed to improve the mechanisms of control over settlements as in accord with legislation settlements in acquisition and sale of alcoholic beverages (except retail trade) must be carried out only in cashless form, but unfortunately, even those requirements are not observed and that leads to reduction of transfers to the State Budget.

As it turned out, this is not the only problem in this segment, and among entrepreneurs there are those who resort to dumping, which is also contrary to domestic legislation.