Georgia has exported more still wines to Russia than Italy. And Moscow is thinking of doubling duties

Since the start of the Russian invasion of Ukraine, more than 500 days ago, many things have changed as far as relations between Moscow and Europe are concerned, at a political level, obviously, and in trade relations. The war has drained important economic resources, and has alienated Russia from the West and Europe, to consolidate partnerships with India and China. These changes will have significant repercussions on trade, which is in great difficulty due to the European embargo on many products, and due to the weak ruble. Wine is one of the very few products still resisting. Italian wine, instead, in the first 5 months of 2023, according to data reported by the Russian economic newspaper, “Kommersant”, lost the scepter as number one exporter of still wine to Russia, exporting 23.36 million liters (+31% compared to the same period in 2022), to Georgia that exported 24.15 million liters of wine (+63%). Consequently, the share of Georgian wines on the total of still wines Russia imported - in volume - reached 19.1%, while Italy’s stopped at 18.5%. Imports of still wines from Spain, over the same period, increased + 25%, to 20.46 million liters, while France grew +23%, to 10.04 million liters, and Portugal +69%, to 9.61 million liters.
The wine imports competition, however, restricts the spaces of domestic production, an aspect that greatly worries the Russian President Vladimir Putin. He recently approved extending support measures for wine producers, but has obligated companies to invest in product development and modernization. Another important, but far from positive step, from the point of view of foreign producers, is the possibility of an increase in customs duties, which could go from the current 12.5% to 25-30%, more than double. Returning to data, according to Rosstat, the Russian Federal Agency for statistics, in May 2023, compared to May 2022, domestic production of sparkling wines and "champagne" (as they continue to define quality bubbles in Russia), decreased 19.3%, while production of still wines increased 3.9%, to 27 million liters. Further, to make Russia even less Western, there is still the peremptory no to experimenting online wine sales, which, therefore, may never see the light.