Russia increases duties on wine from “hostile countries” (Italy and EU included), from 12.5% to 20%

Italian wine imports to Russia grew in 2022, in spite of the war (+15.8%, to 172 million euros, net of triangulation from neighboring countries, ed.), and continued to grow in 2023 (+ 65.5% in the first 4 months, for 45.5 million euros), according to the Italian statistics agency, ISTAT, data that WineNews analyzed. However, news from Russia is certainly not very comforting at all for the wine trade. The Russian newspaper, “Vedomosti”, has reported that the Government is about to increase duties on wine imports from “hostile countries” (in other words, all European Union countries, including Italy, as well as others), from the current 12.5%, to 20% (and, not less than 1.5 US dollars per liter), according to what a spokesman for the Ministry of Economic Development reported, in reference to the decree the Russian premier, Mikhail Mishustin, has signed, (but it has not yet been published).
“Domestic production and imports from friendly countries will fully satisfy domestic demand,” the Ministry of Economic Development stated. In addition to domestic wine producers, the wine market will be saturated with imports from friendly and neutral countries, the Ministry commented. Imports of still wines from Chile in 2022 increased +9% in terms of value, and imports from Armenia increased +161%. Demand for South African wines has also increased, according to the Ministry of Economic Development. This was the Russian Government’s response, at least partially, to the requests of Russian winegrowers and producers Associations, who asked Mishutin directly to provide initiatives to support National production, as the “Tass” news agency reported, quoted in the newspaper, “Kvedomosti”. Specifically, the Sevastopol Association of Winegrowers and Producers has proposed setting minimum prices for imported wines.
“We are asking you to protect Russian winemaking from unfair competition. That is to say, to limit the quantity of wine imported from hostile countries by increasing import duties, quotas for import volumes, and setting a minimum retail price for imported wine”, the producers allegedly asked in a letter, recalling that the Law on Viticulture and Winemaking had banned bottling still and sparkling wine in Russia coming from imported wine materials. “However, since autumn 2022, wine materials, which were effectively banned for import into the Russian Federation, have instead been imported in large quantities in the form of cheap bottled wine, most of which is produced in hostile European countries: Spain, France and Italy”, the Association wrote. Furthermore, according to the Association, the purchase price of this wine, taking into account subsidies awarded to European producers when they export outside the European Union, is sometimes less than 1 euro per liter.
“Consequently, mass retail chains have begun to prefer cheap imported wines, pushing domestic wines off the shelves. And, as to be expected, this situation has led to a decrease in sales of Russian wines”, the document continued. According to the letter from the Sevastopol Association of Producers, sales of wine and sparkling wine in the first half of 2023 registered a decrease of more than 30%, compared to 2022. “Plus, the trend will be the same until the end of the year,” the document continued. This could lead to a loss of revenue for Sevastopol businesses, a decrease in profitability and possible losses for many companies. There could also be problems for the wineries, as they will not be able to harvest and sell the entire production in 2023 because winemakers still have a large volume of wine from last year’s grapes in their tanks. “Therefore, a significant amount of grapes from the 2023 harvest might remain on the plants, because there will be nowhere to deposit it”, the Association concluded.
These are the negative signs from Russia, a world wine market, which, however, is not one of the major ones in terms of volumes and values, but definitely an important market. Now, however, it is seeing a decrease and reduction of a great part of the world’s wine productions, including Italy (the effects have not yet been evaluated, ed.), in a general context in which the International wine market is definitely not experiencing one of its most radiant moments.