The Ukrvodka Association has asked the Cabinet of Ministers to increase the minimum retail price of a half-liter bottle of vodka by 32.6%, to UAH 39.90, due to growth in its production cost.

"The minimum retail price of a half-liter bottle of vodka is to be urgently increased to UAH 34.90 and after the increase in the excise duty in July, the minimum retail price should be revised upwards to UAH 39.90," reads the report, citing Ukrvodka Director General Voldoymyr Ostapiuk.

He said that the minimum prices should be increased, as this is an efficient instrument for fighting the illegal turnover of alcohol and an indicator of the fullness of payment of taxes to the national budget.

Ukrvodka said that the current level of minimum prices is not in line with real expenses of producers on production of alcohol, as it does not reflect a rise in the excise duty, the prices of energy, spirit, the excise label, wages and other elements of the price of alcohol.

According to the report, the excise duty on vodka from March 1, 2014 grew by 14%. The excise duties on vodka will be increased by another 25% from July 1, 2014.

"From July 5, 2013, the price of spirit was increased by 13%, and now all producers received official notifications from Ukrspyrt State Enterprise that the price of spirit will grow by another UAH 21 per decaliter," the association said.

Ukrvodka said that if the state does not take measures, in 2014, the legal alcohol production would considerably fall.