Imports of still wine to the Russian Federation in 2023 increased by 4.4% compared to last year, according to calculations by the Luding Group. True, the growth occurred in the first half of 2023. In the second half of the year, an increase in duties on wines from hostile countries from 12.5% to 20% (but not less than 1.5 dollars per liter) and sanctions restrictions caused a drop in imports. According to Simple Group, since August 2023 compared to 2022, imports have decreased by a third on average.
But in 2024, wine imports have increased again: from May 1, the excise tax on wine will increase from 34 rubles to 108 rubles per liter. That is why importers try to import as much as possible at the old prices, according to market participants interviewed by Rossiyskaya Gazeta.
We can already feel the effect of the increase in duties and, above all, on cheap European wines. If in 2022 it was possible to find wines from hostile countries in stores for less than 250 rubles a bottle, now there are practically none left. In this context, the consumption of wines imported from the CIS and New World countries (Chile, South Africa, Argentina) is increasing, because they were not affected by the increase in duties, says Evgeny Shcherbakov, wine director. Luding Group portfolio.
According to Igor Karavaev, Chairman of the Presidium of the Association of Retail Trade Companies (AKORT), now the cost of Russian wines in the low price segment ranges from 165 to 290 rubles per bottle, prices for wines from France and Spain They start from 300-400 rubles per bottle, Italian wines – on average from 450 rubles.
At the same time, sales of Russian wines in 2023 did not grow in volume, but in monetary terms. This indicates an increase in prices for domestic products, says Luding. In the first half of 2023, against a backdrop of record imports, even Russian manufacturers reduced prices, feeling the pressure from imports. And at the end of the year, import prices increased, followed by an increase in Russian wine prices, although less noticeable, says Alexander Lipilin, CEO of the Fort wine trading company.
In Simple Group’s portfolio, on the other hand, there is an increase in sales of Russian-made wines.
“There is great interest in the national product and it continues to grow,” says the company.
However, they also admit that after the increase in prices of imported wines, the cost of Russian wines also increases. This is due, among other things, to the increase in wine production costs.
The May 1 excise tax increase will affect everyone this time. But, as with the increase in tariffs, this will be more noticeable in the economic segment, predicts Lipilin. In the category of wines up to 500 rubles, the increase could be 10-15%, but it will not occur immediately, but gradually, as the goods pass through retail chains.
Importers did not immediately transfer the August 2023 duty increase to the final price, but rather spread it over time, partially offsetting the price increase thanks to their margins. Otherwise, sales could collapse. Now all increases will be completely passed on to the price. In the category of less than 700 rubles there will be practically no imported wines left, with the exception of Chile, Argentina and South Africa, predicts Lipilin.
In his opinion, Russian wine prices will increase after imports.
“But how willing the consumer is to switch to Russian wines is an open question, because categories such as Prosecco, Pinot Grigio, German Riesling and New Zealand Sauvignon Blanc have practically no substitutes among Russian wines,” Lipilin notes.
In his words, an increase in demand for other drinks, such as cocktails, has already become evident.
It is clear that the increase in excise duty from May 1 will increase the cost of wine, but will not improve the quality of the products offered. Further price increases are unlikely to stimulate market growth. According to Simple Group, there is a high risk that the consumer will sacrifice the quality of the purchased wine to maintain consumption in the usual price range or switch to other alcohol categories.
The proportion of wines from hostile countries in the retail chains included in ACORT does not represent more than a third of the sales volume of imported wine. While sales of Russian products exceed 50% of the total sales volume.
“European wines have their own loyal consumer, and tariff increases and changes in excise taxes are unlikely to lead to sudden changes in demand. Rather we expect a smooth, but stable and systemic increase in demand for Russian products as the domestic market The wine industry will develop in the coming years,” Karavaev disagrees.
At the same time, due to a possible reduction in imports from hostile countries, the Luding Group predicts that the structure of wine consumption in Russia will also change from dry to semi-sweet. After all, most dry wines are imported from European countries. And Russian and Georgian winemakers produce more semi-sweet wines, Shcherbakov explains.
