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Wine Digest (February 18)

Wine Digest (February 18)

Thomas Anthony

English-language Editor

18 february 2022
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Overview of Top Stories in the Russian Wine World.

Top importers, Exporting countries, Cost of marking, Kuban Vino, Sevastopol taxpayers.

Every week we identify for you the top stories in Russia about wine, spirits, restaurants, beer, cider, etc. We provide an English-language summary of each of them, as well as a link if you want to learn more. 

Written by Evgeniy Kotelevsky, edited by Thomas Anthony.

Top three wine importers in Russia

First place was taken over by Luding, with 251,000 hl of wine imported. Luding increased its imports by 25.6% over the last year, and imported 8.4% of all wine brought to Russia. Mistral Alko dropped to second with 215,000 hl, down 10.25% from last year. And third place was taken by TC Labaz, part of X5 Retail Group (Pyatoyrochka, Perekryostok), with 201,000 hl of imported wine – an increase of 80.09%. According to experts, the growth of Luding’s imports is driven by the increase of its supplies to the leading alcohol retail chain in Russia, “Krasnoe i Beloe” (“Red and White”). The fall of Mistral Alko is likely due to price rises of key portfolio positions – inexpensive wines from Abkhazia – making them less attractive to consumers. The rapid growth of X5 Retail Group reflects the growing trend of direct imports by retailers  by the end of 2022, the five largest retailers which are developing direct imports are projected to account for more than 60% of all wine imports. Russia's total imports of still and fortified wines in 2021 increased by 6.6% year on year, to 3,008,000 hl. Read the original news in Russian.

Leading countries exporting wine to Russia 

The 10 largest wine suppliers to Russia (in descending order of volume) are Italy, Spain, Georgia, France, Portugal, Abkhazia, Chile, Germany, South Africa, and New Zealand. The largest growth was shown by: Portugal (+40%) with its affordable Vinho Verde and red wines, Germany (+33%) due to the ongoing popularization campaign organized by the German Wine Institute (DWI), and South Africa (+30%) whose affordable Sauvignon Blancs filled the deficit caused by the poor harvest in New Zealand. The largest drops in imports were from Chile (-11%), due to higher costs of container transport and image problems on the market, and Abkhazia (-9%), with increased prices putting the wines out of the reach of their traditional consumers. Read the original news in Russian.

Alcohol market players warn of price increases due to digital marking 

After the announcement of the planned June experiment with digital marking of wine (which we reported on two weeks ago), representatives from the alcohol field sent a letter to Prime Minister Mikhail Mishustin requesting that the alcohol industry not be included in the "True Sign" system of digital marking. In the appeal, they highlighted that alcoholic beverages (aside from beer) are already controlled by the existing EGAIS system, and the introduction of an additional one will likely lead to higher prices. The “Winemaking Union” association, which includes such big producers as Kuban Vino, Fanagoria, and Millstream, warned that the introduction of the new labeling will lead to an increase in prices by at least 15% for the final consumer. Digital marking is used by the government as a measure to reduce the share of illegal products on the market. According to Skolkovo researchers, only 0.5% of wine is illegal production, in contrast to 30-40% of strong drinks. Read the original news in Russian.

Kuban Vino invests 2.5 billion rubles in modernization of production

According to the press service of the Krasnodar regional administration, the company is investing about 2.5 billion rubles in the modernization of its winery in the Temryuksky district. It has purchased new fermentation tanks and expanded the production laboratory. As a result of the modernization, the company plans to increase production volume and improve the technology and methods of grape processing. Kuban Vino also plans to open an ecological mini-park and educational center for wine tourism. Ariant Group, which includes Kuban Vino, is one of the leading wine producers in Russia, with a volume of 226,000 hl. Read the original news in Russian.

Largest taxpayers in Sevastopol are wineries

The leading sources of tax revenues to the Sevastopol regional budget in 2021 were Inkerman, with total payments of 350 million rubles, and Zolotaya Balka with 294 million rubles. Other winemaking companies among the top 20 taxpayers in Sevastopol are Kachinsky (120 million rubles), Argo (119 million rubles), and Satera (46.3 million rubles). The total area of vineyards in Sevastopol currently in production is about 5,500 hectares. Read the original news in Russian.

Cover Photo: © Chuttersnap/Unsplash.

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