Alcohol goes to drains – Newspaper Kommersant No. 65 (7510) dated 04/14/2023

Distributors and retail chains are actively compensating for the failures in the import of alcoholic beverages last year. In the first two months of this year, the volume of supplies of wines and spirits increased by 23%, exceeding 79 million liters. This is a record figure for five years. Companies can accumulate stocks in the face of a weakening ruble, and the annual rate will depend on the purchasing power of the population.

According to the results of January-February 2023, alcohol imports to Russia increased year-on-year by 23%, to 79.02 million liters, follows from the data of market participants available to Kommersant. Deliveries of wines increased by 23%, to 63.37 million liters, and spirits — by 25%, to 15.65 million liters. Imports of whiskey, in particular, increased by 32%, to 6.16 million liters, cognac and brandy – by 61%, to 2.82 million liters, liqueurs – by 60%, to 2.01 million liters, rum – by 19 %, up to 1.67 million liters.

According to the data available to Kommersant, the volume of imports of all alcoholic beverages in the first two months of 2023 was the highest for this period in at least the last five years.

Alexander Stavtsev, head of the WineRetail Information Center, notes that in the first months of 2022, stocks of wines imported a year earlier remained on the market in a volume higher than the average values ​​of recent years. Besides, he adds, January is traditionally a bad month for imports. AST General Director Leonid Rafailov notes that due to the lengthening of logistics, many importers received goods in January instead of December, which also affected the dynamics. Enterprises in Europe are experiencing difficulties with components, which also led to the transfer of deliveries to the beginning of 2023, adds Dmitry Isachenkov, development director at Ladoga.

In the Alcoholic Siberian Group (ASG), the growth in imports in the first months of 2023 is explained by the filling of the market after a significant drop in the supply of strong drinks last year due to the refusal of some companies to work in Russia. For 2022, according to Kommersant’s data, imports of all strong alcohol decreased by 36%, and whiskey – by 52%. Both parallel imports and exclusive new brands in all categories of spirits have contributed, adding to the LRA. So, in the first two months of 2023, India entered the top five major suppliers of whiskey with more than 240 thousand decalitres. In the ASG exclusive distributor Indian brands Allied Blenders & Distillers see great potential in this category.

As Alexander Stavtsev notes, active deliveries at the beginning of 2023 may be caused by the desire of some market participants with resources to increase reserves in the face of a weakening ruble to minimize risks.

In addition, the expert says, the selling price situation is now quite favorable: “Winemakers in a number of countries, including Spain, have kept prices without increasing for Russian counterparties.”

According to Mr. Stavtsev, in the first quarter of this year, the wine stock in Russia will be a record since 2017 and will significantly exceed 100 million liters. With a significant weakening of the ruble, this will allow the networks that have made such stocks to restrain price increases for several months in order to maintain demand, he explains. According to Kommersant’s data, the top three importers of alcohol are Beluga Group, X5 Group (Pyaterochka, Perekrestok) and Mercury Retail (Red & White, Bristol). X5 noted that they continue to develop direct imports and increased the volume of alcohol imports in the first quarter. The main suppliers were Georgia, Austria, Portugal and Argentina, they added.

According to the ASG forecasts, by the end of 2023, strong alcohol imports will show positive dynamics year-on-year, although growth rates are likely to slow down from current figures. Alexander Lipilin, executive director of the Fort wine trading company, also expects a continued increase in the import of strong drinks in the context of the replacement of departed brands. It’s not clear which brands will sell well, so suppliers and consumers are experimenting, he points out.

Growth rates of wine imports, continues Mr. Lipilin, are likely to decline following the reduction in sales due to the transition to a savings model of consumption. According to him, a clear trend may become in the second quarter. Leonid Rafailov also expects that the purchasing power of the population will affect the volume of imports in 2023. Consumers are switching to cheaper drinks, which has a particularly negative impact on sales in the “average” and “average plus” price categories, he notes.

Anatoly Kostyrev