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Russia could impose 200% duty on wines from NATO states
The Russian government are considering an imposition of 200% duty on wine imports from NATO states in order to support its own wine sector.
The Russian government will consider the latest initiative of Association of Winegrowers and Winemakers of Russia (AVVR) to impose duties on the imports of wine from so-called ‘unfriendly’ countries for Russia, including NATO states, to the rate of 200%.
As the executive director of AVVR, Alexey Plotnikov was told that such a decision could be taken already shortly.
Alexey Plotnikov said: “We decided to once again appeal to the government and the Parliament (State Duma) with a request to strengthen measures to protect the Russian market by imposing duties for wine, sparkling wine, fortified wine from NATO states at 200%.”
Unfriendly
In July 2023 the government already increased import duties on wines from ‘unfriendly’ countries – from 12.5% to 20% until 2024, while such an increase is probably considered as insufficient by some state officials and local winemakers.
According to Plotnikov, in addition to 200% duties the Association also proposed to cancel the preferential regime for wine imports from Georgia.
Among the other proposed measures for domestic winemakers is also setting a quota of 20% for Russian wine in Russian retail stores from September 1, 2024 with a further increase up to 50%.
There is also a potential setting of a quota for cafes and restaurants for at least 50% of domestic products in the wine list from 1 September, and to list such drinks at the beginning of their menus.
In the meantime, the latest plans of the Russian state and the local industry’s association has already sparked serious criticism from some leading Russian wine importers as well as analysts in the field of wine business, most of which believe implementation of such measures will lead to a sharp rise of wine prices in Russia (including for domestic wines), and the actual suspension of wine imports from most of the EU states and other Western nations.
Additional duties
Last year prices for wine in Russia grew as a result of duty increases, and most analysts expect a further rise of prices, in the case of the imposition of additional duties.
Analysts also believe wine imports from such countries as South Africa, Argentina and Chile will not completely meet domestic needs in wines, which may even lead to its shortage in some segments of the Russian wine market.
Currently most of Russian wines are very expensive, which is also due to the lack of their mass production within the country, as the industry is very young.
Analysts also expect the imposition of 200% duties will result in the growth of prices for Russian wine by up to 30%.
As Andrius Jucis, owner of a winery located in Crimea, said in an interview with the Russian Business FM business paper, the imposition of duties will have a negative impact on local customers, as the demand for European wines in Russia has always been high and the taxes will result in the reduction of the range of wines available.