Overview of Top Stories in the Russian Wine World.
New classifications, Abrau in Azerbaijan, Wine fairs, Sparkling price, Tasting rules, Counterfeit wine.
Written by Evgeniy Kotelevsky, edited by Thomas Anthony.
Ministry of Agriculture declines to delay enforcement of new wine classifications – Negotiation continues
Amendments to the classification system of Russian laws regulating wine were adopted at the beginning of July. Most publicly controversial was a requirement that the Russian-language back label on Champagne label it as “Sparkling wine from the Champagne [“Shampan”] region”; use of the term “Shampanskoye,” the Russian translation of the wine category Champagne, was reserved for sparkling wine produced in Russia. However, more troubling to importers and retailers was the prospect of having to change the back labels and documentation for almost all wine sold in Russia – including wine already in the country or in the midst of the lengthy import process. To avoid the prospect of a great deal of wine suddenly becoming technically “counterfeit,” potentially leading to shortages of imported wine, a temporary moratorium on enforcement was put into place, initially to October 1, and then to Dec. 31.
However, as the deadline approached, a number of wine retailers, producers, and importers sent a letter to Prime Minister Mishustin, warning that a six-month grace period on enforcing these changes was not sufficient. They noted that tens of millions of bottles labeled under the previous system remained unsold – stuck in customs, in warehouses, or even on store shelves – raising the possibility of confiscation and potential losses of up to 15 billion rubles. However, the Ministry of Agriculture declared in a statement on Dec. 29 that the moratorium had been enough time for “most suppliers to be highly prepared to work under the new conditions,” so would expire as planned, with the new law taking effect on Jan. 1. Industry sources report continued problems in the new year with shipments clearing customs, and negotiations are ongoing. Read more about it in Russian here.
Abrau-Durso acquires an Azerbaijani winery
The Russian wine conglomerate Abrau-Durso has won the privatization tender for the purchase of the ASK Sheki Sharab winery in the Sheki region of Azerbaijan, with a capacity of 2.6 million bottles per year. As part of the conditions of the privatization, Abrau-Durso will invest more than € 2.3 million in the development of the winery. The company plans to export wines produced at ASK Sheki Sharab primarily to Russia. Read the original news in Russian.
Photo: © Abrau Durso
Wine fairs to appear in Russia
The Law on Wine Fairs, initiated by the Ministry of Industry and Trade, will apply to wines made from grapes grown in the Eurasian Economic Union countries (EAEU). The new law removes the requirement for a permanent retail facility for wine sales. It will be possible to sell wines at such a fair with any of these licenses: for production, purchase, storage and sale, or retail. Not only sales will be allowed, but also tastings, which are actually currently forbidden at retail sales points. The duration of such fairs will be up to 14 days. Read the original news in Russian.
Sparkling Wine Producers Association asks to increase the minimum retail price (MRP) for sparkling wine
At the moment the MRPs are set at 169 rubles for retail, and 118 rubles when purchased from the winery. The Sparkling Wine Producers Association asks for the MRPs to be set at 199 and 140 rubles, respectively. In its letter, the Association attributes the need for the price change to the increase in the excise tariff on sparkling wines from January 1, 2022, which accordingly increases the costs of producers. The appeal to change these MRPs will be reviewed by the Ministry of Finance. Read the original news in Russian.
Sevastopol authorities ask to loosen the regulation of tastings at wineries
According to Deputy Governor Maria Litovko, the authorities of Sevastopol asked in a letter to the Ministry of Agriculture to soften the rules on wine tastings during excursions at wineries. According to Litovko, the current rules require a winery to have a restaurant license in order to conduct tastings, and the EGAIS system "does not provide the necessary flexibility to hold tastings and other events at wineries." At the end of December, President Vladimir Putin issued instructions to prepare a set of measures to promote Russian wines on the domestic market, including the development of wine tourism. Litovko said that the proposed changes would help to develop wine tourism, in keeping with the instructions of the president. Read the original news in Russian.
Cover photo: © Igor Saveliev.