Overview of Top Stories in the Russian Wine World.
ProdExpo, “Fruit wine”, Weak ruble, Minimum prices, Digital marking, Fines increased.
- ProdExpo exhibition of food and beverages to take place February 7-11
- Term “Fruit Wine” prohibited in Russia
- Weak ruble may impact alcohol prices
- Minimum Retail Price increased for vodka and brandy; beer excluded
- Russia will begin digital marking of wine
- Fines increased for illicit alcohol and cigarettes
Written by Evgeniy Kotelevsky, edited by Thomas Anthony.
ProdExpo exhibition of food and beverages to take place February 7-11
Despite the problem of the Omicron virus variant, the 29th annual ProdExpo exhibition is expected to take place as scheduled. As always, it will take place at the “ExpoCenter” space near the center of Moscow. The organizers have announced that over 360 alcohol producers from 38 countries will take part this year. In addition, the event will include the XVII AlcoCongress and WineForum conference for alcohol professionals. New this year will be an “AlcoHall” for meetings between suppliers and retail partners. Registration.
Term “Fruit Wine” prohibited in Russia
Continuing the struggles with wine category terminology reported on in the last news digest, the Finance Ministry has issued a clarification that under new law 468 FZ “On Grape-growing and Winemaking,” it is prohibited to use the term “wine” (and any other words formed from it) on the labels of beverages made from anything other than fermented grapes. Previously these beverages could be called “Fruit Wine,” but they now must be labeled with the clumsy term “Fruit Alcohol Products.” Thus, any fruit wine produced or imported since July must have stickers applied to show compliance with the new regulation or face confiscation. It remains unclear how the Ministry will deal with labeling beverages such as “Barley Wine” (a category of strong beer originating in the U.K.), or “Table Wine” and “Bread Wine” – traditional terms used in Russia before the word “vodka” appeared. Read the clarification of the Ministry here.
Weak ruble may impact alcohol prices
According to leading importers, the weakening of the ruble due to international tensions may lead to a greater increase in the prices of imported wine than we had previously reported. Alexander Lipilin, executive director of Fort, reports that the company is now discussing with clients the price increases which had already been announced at the end of 2021. The founder and president of Simple, Maxim Kashirin, said that the company would not raise prices unless the ruble rate fell to 90 per euro. Read the original news in Russian.
Photo: © Simple Group
Minimum Retail Price increased for vodka and brandy; beer excluded
The Finance Ministry has raised the Minimum Retail Price (MRP) for vodka from 243 to 261 rubles per standard 0.5 l bottle. Similar measures were implemented for brandy, with the MRP for brandy increased from 324 to 348 rub./0.5 l, and the MRP for aged so-called “cognac” increased from 446 to 480 rubles. It is hoped that these prices help to exclude illegal alcohol from the market.
The government previously considered creating a MRP for beer, but this was collectively rejected by the Federal Antimonopoly Service, Ministry of Industry and Trade, and Finance Ministry – which noted the diminished purchasing power of citizens, and were concerned about the potential for “transfer of demand to spirits.” In February of last year, tension around this issue even led three large international beer companies which had opposed the imposition of an MRP – Baltika, Heineken, and AB InBev Efes – to withdraw from the major beer industry organization, the Union of Brewers. Read the original news in Russian.
Russia will begin digital marking of wine
The Ministry of Industry and Trade has proposed an experiment with digital labeling of wine, from June 2022 through August 2023, which will allow retailers and even consumers to check that a bottle has been legally produced. The new system will be integrated with the existing EGAIS system controlling production and turnover of alcohol, so producers will not have to duplicate entry of information into two parallel systems. The ministry is already experimenting with digital marking of beer, from April 2021 until August 2022. In the opinion of the Center for the Development of Advanced Technologies, which operates the marking system, it will help to reduce the volume of illegal alcohol on the market – thus increasing both profits of legitimate producers and government tax revenues. Digital marking is already required on a range of consumer products, including dairy products, bottled water, cigarettes, and medicine. Read the original news in Russian here.
Fines increased for illicit alcohol and cigarettes
The transportation of unregistered alcohol within Russia will carry a fine of 15 thousand to 25 thousand rubles ($190-317), plus confiscation of the alcohol. However, volumes of less than 10 liters will be tolerated. Currently, the maximum fine is 5000 rubles. The new legislation also introduces misdemeanor penalties for the transportation of unregistered tobacco products, including goods from the Eurasian Economic Union (EAEU). The fine will also range from 15 thousand to 25 thousand rubles. The maximum fine for the sale of illicit alcoholic beverages or tobacco products will be increased to 500 thousand rubles, and their production will be punishable by a fine of up to 300 thousand rubles. Read the original news in Russian.
Cover photo: © Simple Group.