Aroma Trading House, which specializes in alcohol imports, said it will open two cash-and-carry stores in Moscow's Maryino and Chertanovo suburban residential districts in the first quarter

of 2000.

The stores - with 1,269 square meters of floor space in Maryino and 1,478 in Chertanovo - will offer mainly alcoholic beverages, from vodka and cognac to wines and beers. They will include lower-priced items and higher-priced elite products, officials said.

Aroma said the stores will receive products directly from manufacturers, allowing them to offer prices lower than elsewhere in the city. Discounts will be offered to wholesale buyers, the company said.

Aroma CEO Vitaly Stepanov said the alcohol industry is expected to remain steady in the near future, despite an impending rise in taxes scheduled to take place next year.

"Price increases are a common thing," he said. "The size is important. If the increase is not very large, nothing terrible will happen. In case of a sizable rise, there will be a momentary drop in sales, but things eventually will return to normal."

Aroma is focusing on major brand names, such as Moldovan cognacs supplied by the Kvint factory (Tiraspol), Dutch liquors from Wenneker, Bulgarian wines from Syarovi Brothers and Georgian wines supplied by Askaneli Brothers. Aroma said it owns exclusive rights to import 15 brands of alcoholic products.

Each of the two stores will offer approximately 2,500 varieties of alcoholic beverages, both domestic and imported, officials said.

Aroma said it envisions the opening of the two new stores as another step on the road to creating a major chain of outlets to be called Aromatny Mir (Aromatic World).

However, the project will depend not only on market-related factors.

"Everything will depend on the State Duma [lower house of parliament] elections," Stepanov said. "In this country, political decisions rule everything. If we see stability and good prospects after the elections, we will probably expand at the rate of two stores in every six months."

Stepanov did not release information concerning how much was invested in the project and what were the sources of funding, loans or retained profits. He did say, however, that each of the stores was expected to pay back the investment in three to four years if conditions in the country remain stable.

Aroma plans to expand mainly into Moscow's peripheral districts, Stepanov said. "There are no suitable accommodations in the center and, even if there were, they would have been too expensive. Besides, we always try to surround our stores with convenient approaches and parking lots which is also not possible in the center."

Currently Aroma runs a store, with 2,000 square meters of floor space, near the company's head office by Fili metro station. Store Director Raisa Lukashova said the store services 1,200 to 1,500 buyers daily. In the last two weeks of December, that number is expected to rise to 1,500 to 2,000 a day, she said.

Aroma officials said that, if it did add stores in the city center, they most likely would be small stores offering only elite products. However, officials said no immediate plans were on the table for this project.

"Elite stores do not require big floor space but require a well-known brand name," Stepanov said. "At this point, the Russian public is not prepared for such. There are connoisseurs in Russia, but they are scarce."

Aroma is also looking at another area of the industry - restaurants. Stepanov said the company has already signed a contract with Planet Hollywood on supplying a full assortment of alcoholic beverages. Also, Aroma supplies alcoholic beverages to restaurants Pekin, Luxor, National and Crab-House.

He said business cooperation with restaurants represents a promising direction for Aroma. "Restaurants do not worry too much about prices because their markup is huge; they are mainly interested in a rich variety and reliability of supply."