How increased wine imports from Georgia will change demand in the Russian market

The growth in imports of Georgian wines to Russia is temporary, it is associated with the repackaging of the domestic market with wines from this region, Vadim Drobiz, director of the Center for Research on Federal and Regional Alcohol Markets, told Vedomosti.

“Now Russian winemakers are proposing their own program – a ban on imports of wines from European countries (Italy, France, Spain, etc.), the introduction of powerful duties. What should importers do in this situation? Enormously increase the import of products. Someone will buy – not this year, then next. Therefore, it is necessary to import a maximum of products before they raise duties or even ban imports,” he said.

According to the expert, the tourist flow from Russia was partially redistributed to Georgia from Europe, and the producers of this region “felt the additional interest of Russian consumers.” In addition, it is easy to bring Georgian wine to Russia, unlike European wine, he said.

At the same time, in terms of volumes of still wine, Georgia is quite a bit ahead of Italy, and the volume of Georgian sparkling wine supplied to Russia is two times less than Italian, Vedomosti’s interlocutor added.

In the first quarter of 2023, imports of still wines from Georgia increased by 49%, to 13.1 million liters, informed June 20 “Kommersant” with reference to the data of the Federal Customs Service. According to the publication, in the first quarter of 2023, 24.15 million liters of still wines were imported from Georgia, and 23.36 million liters from Italy.

In general, Russian wine occupies 50% of the domestic market, while Georgian wine accounts for less than 10% of the total share of imported wine, Drobiz noted.

By 2023, the share of Russian wine in the domestic market has reached 55%, said in April, Secretary of State – Deputy Minister of Industry and Trade of the Russian Federation Viktor Evtukhov. According to Deputy Minister of Agriculture Marina Afonina, in 2022, 65.2 million decalitres (dal) of wine products were produced, which is 8% more than in 2021. At the same time, the largest growth was recorded in the category of sparkling wines.

Igor Gubin, chairman of the Union of Vineyards and Winemakers of the Don, believes that Georgian wines can compete with Russian ones in the segment of sweet and semi-sweet red wines.

“They [грузинские вина ] always present on the shelves, even when there were conflicts [России] with Georgia. They have their own niche. There are lovers, people are nostalgic for these varieties. This niche does not expand and does not increase, young people do not drink Georgian wines. <…> We have [в России] now the segment of dry wines of red, white and rose is developing,” he told Vedomosti.

In HoReCa (hotels and public catering), consumer preferences have not changed and are unlikely to change, says Sergei Mironov, Ombudsman for the Moscow restaurant market and owner of the Meat & Fish chain. Georgian wine has always been in restaurants, but it was consumed much less than Italian or Spanish, he said. In Meat & Fish, according to him, there are 200 positions of wine, of which 60 are Italian and only three positions are Georgian. The rest of the menu is wines from France, the New World, Portugal, Spain and Russia.

“Georgian wine takes its place in the market in stores – not in restaurants. It is cheaper than the Italian one, and there are no additional problems with logistics, so the entrepreneur [ритейлер] sells it more,” he told Vedomosti.

Georgian wine is popular with Russians, Drobiz believes. “But there is no cheap Georgian wine, it is drunk by the middle class. As there is no Spanish, French. It is also drunk by the middle class, and still they will prefer the wine of European countries,” he says.

In March 2006, the chief sanitary doctor of Russia, Gennady Onishchenko, introduced a complete ban on the supply and sale of wine and wine materials from Georgia in Russia. The reason for this decision, according to him, was the high content of pesticides in these products. The ban was lifted in April 2013.

The US and EU sanctions imposed against Russia after the start of the special operation in Ukraine have also affected the import of alcohol. The United States has completely banned the shipment of alcohol, and the EU has limited the supply of products more than 300 euros per unit.