EU Wine Imports to Russia Hit 20-Year Low

Imports of European Union wine into Russia have dropped to their lowest level in 20 years, with only 126,000 tons entering the country since the beginning of 2023. Data from Eurostat, reported by the Russian news agency RIA Novosti, indicates a 25% decline compared to the same period last year. The previous record low was in 2004, when Russian companies imported just 87,000 tons of European wine.

Italy has emerged as Russia's leading wine supplier in 2023, capturing a 39% share of imports, which amounts to 49,000 tons. This marks a significant rise, as Italy has doubled its market share in Russian imports, reaching a total value of €158 million last year. Meanwhile, Lithuania and Latvia, which led the market previously, have seen their sales fall sharply. Lithuanian wine imports dropped by a factor of 2.7, while Latvian imports decreased 4.3 times, resulting in 18,000 and 14,000 tons respectively over the past eight months.

Other EU countries have also gained a foothold in the Russian market. Poland has increased its exports by 70%, reaching 13,000 tons, while Portugal has tripled its sales, totaling 10,500 tons. Nevertheless, European wines still accounted for 37% of the Russian market in 2023. Analysts, however, forecast a decline in this share, potentially falling below 30% in the near future.

Outside the EU, Georgia remains the largest wine exporter to Russia, holding an estimated 20% market share. Analysts anticipate a rise in wine imports from regions such as Latin America and South Africa, where additional tariffs have not been imposed. Countries like Argentina, Chile, and South Africa are expected to play a significant role. South Africa stands out for its growing exports of white and sparkling wines, although Chile led in 2022, exporting 16.6 million liters, a 10% increase from 2021. Argentina and South Africa followed closely, with similar import volumes.

The geopolitical context is complex. On March 15, 2022, the European Union banned exports of wines priced above €300 per bottle to Russia. According to Leonid Rafailov, CEO of AST, a major importer of alcoholic beverages in Russia, the impact was minimal, as high-end bottles only made up 1% of the market. Furthermore, imports of still and fortified wines increased by 4.4% in 2023, totaling 320 million liters, as reported by the Luding Group, another prominent wine distributor in Russia.

Adding to the challenges are tariff policies imposed by the Russian government, which have raised import duties on goods from "unfriendly" countries. In 2021, this list included only two nations, but it has since expanded to 49. In August 2023, tariffs were hiked to 25%, with a minimum charge of $2 per liter. This policy, originally set to expire at the end of 2023, has been extended through all of 2024. Despite these restrictions and the broader framework of sanctions, alcohol consumption in Russia continues to grow, showing robust demand that appears unaffected by the tense international climate.