Liquor Leases

a system for the collection of an indirect tax; in this system the right to deal in alcoholic beverages was given on a tax farming basis to private entrepreneurs. These tax farmers paid the state an amount of money agreed upon in advance and received the right to collect on public trading in spirits.

In Russia, liquor leases were known in the 16th century and existed in the 17th century and first half of the 18th along with the liquor monopoly. Liquor leases became more wide-spread in the 18th century (decrees of 1705-12) and were introduced on a mass scale after the decree of 1765. In 1765-67 liquor leases were extended over the entire country (except Siberia). Initially, the return from the leases (for a period of four years) was formulated for each drinking establishment, and later they were set up on the basis of districts and provinces (before the beginning of the 19th century, the system of liquor leases was not extended to many western, northwestern, and southwestern provinces and the Kingdom of Poland; in these areas the pomeshchiki [landholders] and towns preserved the right to the trade in alcoholic beverages). Beginning in the 18th century liquor leases were one of the sources of the so-called primary accumulation of capital. The huge fortunes of many representatives of the merchantry (such as the lakovlev, Zlobin, and Kokorev families) were amassed on the basis of liquor leases, and the dvorianstvo (nobility or gentry) were also enriched (the Dolgorukii, Gagarin, and Kurakin families). After an attempt to abolish the system of liquor leases in 1817 (a project of Minister of Finance D. A. Gur’ev), the state returned again to the system in 1827. The state received 10 million rubles from liquor leases in 1781 and about 12 million rubles (25 percent of all revenue receipts) in the early 19th century. In the period 1859-63, the state received 128 million rubles (40 percent of all revenue receipts). Liquor leases aroused popular indignation and led to open protests in 1858-59. After the 1861 re-form liquor leases were abolished, and in 1863 another type of indirect tax, the excise, replaced it.