In an effort to build support for their industry and celebrate their increasing level of transparency and honesty, Russian alcohol producers from all over the country gathered at the President Hotel on Tuesday to celebrate their achievements in 2002.

But in the eyes of an uninitiated observer, it seemed more like a government service to producers who had cleaned up their act and started paying taxes.

Organizers thanked the Economic Development and Trade Ministry for its advice and assistance. Valery Gubanov, the head of the Tax Ministry's department for regulation of tobacco and alcohol, said the awards ceremony was for all companies that wanted to work legally.

"The results we achieved this year were largely thanks to government support, and we hope next year will be even better," said Pavel Shapkin, chairman of the National Alcohol Association, a non-commercial organization representing the industry.

"What made last year so special was we had a sharp increase in the number of companies that pay taxes and produce their products legally," Gubanov said in an interview after the ceremony, adding that the number of taxpayers had jumped by 107 percent. "We still estimate that around 20-25 percent aren't paying," he added.

The association touted overall market production of more than 139 million deciliters in 2002, an increase of 10 percent in overall alcohol production and a 6 percent increase in vodka and hard alcohol production. However, it was unclear if production increases were thanks to an actual boost in production, or simply because more companies registered their results. More than 25 awards were handed out, and several companies received identical prizes. Categories were broad and including Best Vodka and Hard Alcohol Producer, Best Cognac and Brandy Producer, Best Exporter and Best Importer, to name a few.

Regional producers and other representative of the industry were grateful to have their brands recognized and show off their products.

Vladimir Kamarov, general director of Irkutsk-based vodka producer Kedr, said while his business was developing well, his company had yet to expand into other regions. "It's about time. We need to do that," he said, pouring out another shot glass for an eager guest.

While there are 520 alcohol producers active on the Russian market, Kamarov said the number would likely decrease over the next decade as the market stabilized.

"The market is much more stable now, and we are finally developing in a normal fashion," he added.

Chernogolovka Distillery, a company from Moscow Oblast founded in 1995, was lauded for being a leader in the alcohol market. It released three new brands this year, but won a more important victory when it earned the rights to produce Stolichnaya and Moskovskaya vodka. Its newly released "Old Moscow" was more of an image brand, according to marketing director Karina Musailova.

She said the market was stabilizing for producers overall with the number of illegal producers decreasing and companies arguing over shareholders and not paying taxes also on the decline.

Meanwhile, problems for an industry formerly riddled with organized crime and scandals continued. Only a day before the ceremony, a Moscow court was overseeing a case filed by an unhappy shareholder of the Topaz distillery to prove that its general director, Alexei Simonov, received his stock in the company illegally.

Also, over the past year the Russian government tightened its grip on vodka producers.

The Chernogolovsky Distillery acquired the license to produce Stolichnaya and Moskovskaya in November of last year from Soyuzplodoimport, a body the Agriculture Ministry set up to manage its 43 vodka trademarks. The state-controlled agency won back the rights to the brands in court from alcohol producer SPI Group – another award winner at the ceremony – accused of illegally acquiring the labels in the mid-'90s. SPI retains the rights to sell the brands in more than 100 other countries.

Shapkin and Gubanov handed out the awards.

The country's largest vodka producer, Kristall, which topped the charts with 11 million deciliters of vodka, last year walked away with a prize as the best vodka and hard alcohol producer. Producers Leviz, Veda and Topaz also received the same award.