Russia rift threatens drink sector

7th August, 2014 by Gabriel Stone

EU wine is the first drinks sector to face a direct threat from the West’s recent breakdown of relations with Russia, which is considering a ban on European wine imports in response to sanctions over its annexation of Crimea.

RussiaAccording to the ITAR-Tass news agency, Yanina Pavlenko, head of the Crimea Bureau of Grapes and Wine, wrote to Russian President Vladimir Putin last month to request the move.

In her view, “These fair measures would allow Crimean winemakers to compensate for the negative effects from EU sanctions while giving Russia’s wine industry a boost.”

The Russian government is expected to meet on 20 August to discuss whether it should impose restrictions on EU wine imports.

According to data from 2012 compiled by the Massachusetts Institute of Technology, France and Italy are the largest wine exporters to Russia, accounting for over 35% of the country’s $850 million total wine imports.

The move comes as Russia announced on Thursday (7 August) a “full embargo” on food imports from the EU, US and some other Western countries in response to sanctions over Ukraine.

Prime Minister Dmitry Medvedev said it would include fruit, vegetables, meat, fish, milk and dairy imports. Australia, Canada and Norway are also affected by the import ban.

Wine is for now not included in the embargo, although the Washington Post reported that one senior Putin adviser, Vladislav Surkov, told Twitter yesterday that he was “going out to buy Scotch whisky.”

While there is currently no official proposal for spirits to face an import ban, deteriorating relations between Russia and the EU could damage the recent strong growth seen in Russia by the whisky sector, which in turn has buoyed many of the major drinks groups’ recent results.

According to the Scotch Whisky Association, total exports to Russia are worth more than £130 million a year, making the country the seventh largest market for Scotch whisky in value terms.

In its year-end results last month, Diageo reported 4% growth in net sales to Russia, driven largely by whisky brands such as Bushmills and Bell’s. Meanwhile Pernod Ricard posted 6% growth in Russia during its last full financial year, driven mainly by Jameson and Ballantine’s

Earlier this month Russia announced a move to ban imports of Sazerac’s Kentucky Gentleman Bourbon, although this particular case was officially attributed to fears about a harmful organic chemical by a Russian consumer rights watchdog.

Leave a Reply

Your email address will not be published. Required fields are marked *

Subscribe to our newsletters

Job vacancies

National Account Manager – On-Trade

Berkmann Wine Cellars
London, UK

Sales Manager – Midlands and South West

Pol Roger Portfolio
Midlands and South West

UK Brand Ambassador - That Boutique-y Gin Company

That Boutique-y Gin Company
Tunbridge Wells, Kent, UK

Senior National Account Manager – Grocery (Craft Spirits)

Maverick Drinks
Tunbridge Wells, Kent, UK

Senior National Account Manager – Wholesale RTM (Craft Spirits)

Maverick Drinks
Tunbridge Wells, Kent, UK

Digital Marketing Manager

Master of Malt
Tunbridge Wells, Kent, UK

Experienced On Trade Sales Person

Borough Wine Imports
London, GB

3 x Business Development Executive

The Lakes Distillery Company Limited
Newcastle head office and nationwide, UK

Editor

Master of Malt Ltd
Tunbridge Wells(Kent)

Sales Account Manager - On-Trade

Berkmann Wine Cellars
Liverpool

Brand Manager

Hallgarten Druitt
Luton, UK

Experienced On-Trade Salespeople Required

Portal Wines and Spirits
London, UK

The Global Merlot Masters 2017

Deadline : 17th April 2017

db Awards 2017

Deadline : 28th April 2017

The Global Organic Masters 2017

Deadline : 14th April 2017

The Global Sparkling Masters 2017

Deadline : 12th May 2017

Click to view more

Global Chardonnay Masters 2016

Now in its fourth year, the competition will identify the best Chardonnay from all around the world in every price range.

Rioja Masters 2016

Now in its fifth year, the competition will recognise and reward the finest Riojas on the world stage.

Fortified Masters 2016

Now in its third year, The Fortified Masters will reward the best fortified wines on offer.

The Global Malbec Masters 2016

the drinks business is proud to announce the inaugural Global Malbec Masters 2016.

Click to view more