Bloomberg News

Czech Cabinet Eases Ban on Liquor Sales After Methanol Killed 26

September 26, 2012

The Czech government agreed to ease a ban on the sale of liquor, allowing bars and stores to offer some spirits after drinks laced with methyl-alcohol killed 26 people in the past three weeks.

Health Minister Leos Heger will announce tomorrow that alcohol produced before 2012 may be sold, Premier Petr Necas told reporters in Prague today. Retailers and hospitality businesses will be allowed to sell beverages made since Jan. 1 after securing a certificate of origin, Necas said. The new rules will take effect once Heger announces them.

The strictest nationwide liquor ban in 20 years hurt liquor makers such as Paris-based Pernod Ricard SA (RI), which owns the Czech liqueur Becherovka, and is costing the government in lost tax revenue. About 20 million bottles were locked up in warehouses after authorities imposed the prohibition Sept. 14.

Police on Sept. 24 said they found the source of methyl- alcohol used to lace beverages and charged two men with public endangerment, with a possible jail sentence of as many as 20 years. Prosecutors may also seek an “exceptional punishment,” according to state prosecutor Roman Kafka.

The men intentionally provided the mixture of methyl- alcohol and ethanol in order to enrich themselves, and the main suspect is a 42-year-old man from the eastern region of Moravskoslezsko, according to Kafka.

Cheaper methyl-alcohol maximizes profits for the producers and distributors. Such spirits are also sold without a government liquor-tax stamp.

Authorities are still searching for about 15,000 liters of tainted liquor, Police President Martin Cervicek said, warning against the consumption of any spirits of doubtful origin.

The ban is hurting the budget as the state collects about 750 million koruna ($39 million) a month in taxes from hard liquor sales, according to Ladislav Mincic, a deputy finance minister. A longer ban would “complicate” efforts to cut the budget gap, he said on Sept. 16.

To contact the reporter on this story: Peter Laca in Prague at placa@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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