China entered the top ten whiskey suppliers in the Russian Federation

Alcohol distributors continue to look for opportunities to diversify the geography of whiskey supplies. This year, China may join the top ten suppliers of this drink to Russia, along with India, with brands such as Galeway Label and Royal Glenvart. The PRC increased its supply of whiskey to the Russian Federation tenfold in January-October, to more than 464 thousand liters. But experts and market participants doubt that whiskeys of “exotic” origin will be in mass demand without successful marketing solutions.

By the end of 2023, China may enter the top ten largest suppliers of whiskey and the top 20 exporters of strong alcohol to Russia, according to the data available to Kommersant from market participants. In January-October, imports of strong alcohol from China increased tenfold year on year, to more than 464 thousand liters, of which 421 thousand liters were whiskey. This corresponds to the sixth place among countries exporting whiskey to the Russian Federation and exceeds, among other things, the indicators of Japan, from where less than 400 thousand liters were imported.

All imports of whiskey into the Russian Federation in January-October, after last year’s decline, increased 2.3 times year-on-year, to 30.49 million liters.

The whiskey category in the alcohol market most noticeably felt the impact of trade restrictions after the outbreak of hostilities in Ukraine. Global manufacturers such as Diageo (Bell`s, Johnnie Walker), Beam Suntory (Jim Beam), Edrington (Macallan), Brown-Forman (Jack Daniel`s), suspended deliveries or left the market, some brands were allowed to operate in parallel import. According to NielsenIQ, over the year to June 2023, the share of cash sales of Scotch whiskey in the Russian Federation decreased from 65.1% to 61.2%, Irish – from 9.9% to 9.7%, American – from 9 .8%, to 5.6%. The share of whiskey from other countries over the same period increased from 8% to 14.7%. In addition to China, a noticeable increase in whiskey imports is noted from India (see “Kommersant” dated February 28). According to data from market participants, in January-October the import of the drink from the country increased eightfold, to more than 742 thousand liters.

According to Kommersant’s interlocutor on the market, the main volume of Chinese whiskey imports comes from the Galeway Label and Royal Glenvart brands, available in the “Red & White” window for 899.99 rubles. and 999.99 rub. per bottle 0.7 liters respectively.

The alcohol distributor Veld-21 has in its portfolio Kavalan whiskey produced in Taiwan for 5.99 thousand rubles. per bottle 0.7 l. In Drinks International’s 2022 ranking of the world’s fastest-growing whiskey brands, Kavalan ranks fourth after Japan’s Suntory, Nikka and Canada’s Canadian Club. Veld-21 also received a declaration of conformity for whiskey from China under the Cagura and Goalong brands, as follows from the data of the Federal Accreditation Agency. On the WineStyle online showcase, Cagura whiskey costs 1.96 thousand rubles, Goalong – from 1.2 thousand rubles. per bottle 0.7 l. Veld-21 did not answer Kommersant.

Ladoga President Veniamin Grabar says the company is already transporting Chinese wine from Changyu and has signed a contract to supply the first batch of whiskey from that country, which should arrive in the first quarter of 2024. Ladoga transports all products from China by sea to the port of St. Petersburg, he clarifies. As Mr. Grabar says, over the last decade China has made a turn from aged cognacs and brandy towards whiskey, and today there are about 20 distilleries in the country of varying degrees of readiness, global companies are building production facilities, and some producers are starting to export. But, adds Veniamin Grabar, many of the whiskeys from China that Ladoga tried still require improvement.

The head of the WineRetail information center, Alexander Stavtsev, says that in the whiskey category on the Russian market the situation remains difficult and the shortage of products is largely compensated by the supply of brands allowed for parallel imports. And Russian whiskey bottling companies may encounter difficulties purchasing Scottish spirits, for which there remains high competition, he adds.

But, Mr. Stavtsev notes, the current supplies of Chinese whiskey are rather of a test nature, and without successful marketing solutions that help promote brands, it will be difficult to significantly expand sales. Veniamin Grabar also does not expect that the Russian consumer will “pounce” on Chinese whiskey, noting that this has not yet happened with Indian whiskey, which is already well represented in the country. Director of CIFRRA Vadim Drobiz is generally confident that whiskey consumers in Russia are not interested in “exotic” products, but remain committed to the drink from Europe.

Anatoly Kostyrev