Russians are forced to drink domestic alcoholic beverages
The Ministry of Economic Development has prepared a draft resolution providing for an increase in import duties on wine from unfriendly countries from 12.5% to 20% per liter. Thus, officials are going to support domestic producers and stimulate the development of the national wine industry. However, experts doubt that the proposed measures will bring the expected effect.
The government's protectionist measure is a «sensitive counter-sanction» directed against foreign suppliers from unfriendly states that continue to fill the Russian market with their own products. At the end of 2022, more than 405 million liters of still, sparkling and fortified wine were imported to Russia, which turned out to be 10% more than the volumes recorded a year earlier. In the first quarter, the situation worsened: imports of only still wines (dry, semi-dry, semi-sweet and sweet) increased by almost 50%. The leaders in supplies were the countries included in the list of «unfriendly» states for Russia: Italy, Spain, France and Portugal.
Increasing the duty to 20% is not the most radical decision of officials regarding imported Cabernet and Sauvignon. Earlier, the Association of Winegrowers and Winemakers of Russia proposed to increase the fiscal rate by 50%, and some «hot heads» demanded to completely ban the import of «enemy» wine into the country. However, as a result, the sanctions were relatively mild.
Although their profile experts were perceived without much enthusiasm. “Over the past four years, the production of wine drinks has been virtually completely destroyed in Russia. If in 2018 the volume of production and consumption of these products, available to the most disadvantaged segments of the population, was approximately 280 million liters, by now it has dropped to 1 million liters. Naturally, the production of champagne and sparkling wines, the output of which was at the level of 150 million liters, as well as still wines, produced in the amount of 300 million liters, also naturally suffered. quickly reached and exceeded 50%,” explains Vadim Drobiz, director of the Center for Research on Federal and Regional Alcohol Markets.
Based on such statistics, the introduction of protective duties on foreign products is quite justified: officials want to support domestic winemakers. “The increase in fiscal fees for imports is aimed at freeing up the most popular market niche, which includes wines costing 300-600 rubles per bottle,” says Pavel Shapkin, chairman of the National Union for the Protection of Consumer Rights. “Such products are in the greatest demand from buyers, but it was in this segment that Russian wine lost to foreign varieties.”
At the same time, experts warn of emerging risks, which will entail tougher taxation of products imported from abroad. On the one hand, reduced competition will make life easier for Russian manufacturers, who will be able to increase their annual sales and receive additional profit. On the other hand, domestic winemakers will lose the incentive to improve the quality of their drinks. “Everyone understands perfectly how to improve their wines, but any improvement is always associated with large investments. At the same time, few producers will easily make serious investments, because why would they spend money if they are sure that there will be a buyer for wine in any case,” says winemaker-practitioner Pavel Shvets.
The formation of healthy competition, in his opinion, requires a strategic approach to the reform of the industry: first, it is necessary to expand the total area of vineyards and create new processing enterprises, and then, on the contrary, reduce the import duty. In this case, a stream of higher quality and less expensive imported wine will flow into Russia, which will force Russian winemakers to improve the quality of their own product. Such work is underway, but the process is moving extremely slowly: in 2022, the area of vine plantations amounted to about 101 thousand hectares, an increase of only 1.8% compared to the previous year. In addition, it will be possible to harvest a full-fledged harvest of grapes suitable for the manufacture of finished products from the planted hectares only in a few years, because the bushes of the “amber berry” do not begin to bear fruit immediately.
In the coming years, apparently, connoisseurs of drinks taken from the vine will have to fork out. The cheapest imported wines, which now cost 400-500 rubles per bottle, will rise in price to 600-750 rubles. “Such “artificial inflation” will not be the last unpleasant change for consumers of foreign products, since it is possible that, following the increase in prices for imported wines, domestic drinks will also become more expensive,” Shapkin warns.