Currently, more than half of the wine market in Russia is based on domestic products. In the context of geopolitical changes, it has become clear how dependent this industry is on various supplies from abroad. At present, the situation on the Russian wine market is largely classic for most sectors of our economy in recent times, where, on the one hand, there is unprecedented sanction pressure on domestic winegrowers, and on the other hand, new perspectives are opening up.
In 2022, at the first Russian Wine Forum, Deputy Prime Minister of the Russian Federation Victoria Abramchenko, who oversees the country’s wine industry, said that despite sanctions, this segment manages to show steady growth . Thus, grape production in 2021 increased by more than 10% compared to last year (+752,000 tons). In 2023, an increase of 760,000 tonnes is expected. In addition, the official noted that the geography of Russian viticulture and winemaking is also developing at an active pace. For example, the first wines from Samara can already be tasted, and the first harvests from vineyards in the Voronezh and Saratov regions are expected in the near future.
In 2020, the Law on Viticulture and Winemaking entered into force in the Russian Federation. It was assumed that the new rules would create all the necessary conditions for the development of the industry. In addition, changes in legislation were supposed to ensure the production of high-quality domestic products from grapes and protect the country’s population from low-quality wines. The bill also establishes fairly strict requirements that products designated as “wine of Russia” must be made exclusively from grapes grown on the territory of the Russian Federation. Financial, real estate and administrative support is offered to representatives of this industry.
The Ministry of Agriculture of the Russian Federation notes that the area of vineyards in the country is also increasing every year. Do not forget that in 2014 such a trend was facilitated by the annexation of Crimea to the Russian Federation. According to the results of that year, the total area of vineyards increased by 23.5 thousand hectares. In addition, one should pay attention to the fact that the volume of wine production is also gradually increasing, which can be considered the result of state support for this industry.
Despite all the actions aimed at the development of winemaking and viticulture in Russia, at the moment domestic products are seriously losing at such a time as brand strength. So, if we consider the structure of world wine imports, here the Russian Federation ranks 9th with a share of 3.9%, and in the case of our products entering world markets, the indicators of the Federation from Russia are much more modest (0.03% of world exports and only 56th position in the ranking). We can conclude that Russian wine noticeably loses in this regard, the average buyer does not trust domestic products, preferring more well-known and popular brands from countries that are historical leaders in the production of wine drinks. In addition, the policy of sanctions against Russia by hostile states also affects. The winegrowers of our country are actively looking for new markets to sell their products. China, Japan and Hong Kong could be of particular interest in this regard. Also, among the new sales directions, one can consider the states of the African continent, where the demand for alcoholic products is constantly increasing due to the rapid growth of the population.
Due to the sanctions, Russian wine producers encountered certain difficulties with the components and equipment necessary to create the final, and above all presentable, products. Thus, material for wine corks was mainly imported from France, Spain and Italy. Labels, paints, equipment for creating yarn for sparkling wine – foreign resources and technologies were involved in most of the processes. The reconfiguration of supply chains has led to an increase in the cost of products, which has also had a negative impact on demand indicators.
The main problems in national winemaking today are economic, technological and mental. For example, a significant increase in the excise tax in recent years contributes to the stagnation of production capacities and the multiplication of bankruptcies of small businesses. The imperfection of the technological base seriously affects the quality of the finished product, which quite quickly affects the mood of a potential consumer, as a result of which buyers prefer foreign wines. It is also worth paying attention to the very low culture of drinking wine drinks in our country. Quite often, the people of Russia choose other types of alcoholic products, guided by a more affordable price and greater strength.
In summary, I would like to point out that at the present stage viticulture and winemaking in the Russian Federation are experiencing significant problems in the international market, which are caused by the low competitiveness of domestic products and the geopolitical conditions, which are the isolation economy of Russia. A similar situation can be observed in the domestic market, where there are problems with outdated equipment, a lack of specialists with high professional skills and a relatively decent age for many vineyards. An integrated approach to solving existing problems will improve the situation of the country’s wine-growing and wine-growing complex and contribute to the development of agriculture in general and specific regions specializing in wine production.
Currently, this sector cannot develop independently without state support, which is not entirely typical of a market economy. Only with the development of fair measures for regulating the regulatory environment, capable of satisfying both the desires of the authorities of the country and representatives of the market, can this complex develop sustainably.
Author: Victor Anufriev
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