The Russian wine market continues to be an unpredictable concoction of local producers', bottlers' and importers' interests, mixed with ever-changing state regulations, weak distribution channels and local and global crises that trigger drastic changes every now and then. You never know what will happen tomorrow.
Overall wine imports in 2009 accounted for a total of 430 million litres of still, sparkling and bulk wine, down 20% from 2008. The top 10 suppliers, representing 80% of all imports, were (in descending order): Spain, Ukraine, Italy, France, Argentina, Moldova, Bulgaria, Brazil and Germany. About 24.9 million litres of the imported wine was 'of unknown origin', enough to put this category in the top 10. Italy, Ukraine, Moldova and Brazil are those that showed some or substantial growth in exports to Russia during 2009. For the first time in many years, Chile is not among the top 10 suppliers (being number 11 with 18 million litres).
Owing to changes in regulations earlier in the year that raised duties for imported bulk wine from 5% to 20%, bringing them in line with the duties on all other types of wine, bulk wine imports continued to plummet in 2009. Russia stopped, or practically stopped, importing bulk wine from Ukraine, South Africa, Uruguay, Bulgaria and France in the second half of 2009. The inflow from Spain, Brazil and Chile remained stable, while that from Argentina and Italy nearly halved. All in all, Russia imported 105.8 million litres of bulk wine, 60% down from 2008. This is official data from Russian Customs' office.
There are, however, some other figures in circulation such as the ones taken from the Moscow Independent Wine Club (MIWC) and published recently by Vitisphère in France. They claim a total of 94.5 million hl of overall imports and local wine production, which would make Russia the world's biggest consumer of wine with 67.5 litres per capita a year, exactly 10 times greater than the real figure. The error comes from the fact that internal Russian spirit statistics are done in 'dal' - a measure for vodka equal to 10 litres. The French just took the dals and replaced them with hectolitres without doing the re-calculations. The second error - concerning bulk wine imports - comes from the fact that MIWC has put together the bulk with the bottled or packed wines in volumes bigger than two litres (ie double magnums or bigger, plus bag in box). Thus they state 250 million litres of bulk (corrected from dals). The customs figure is 233 million litres for the two categories so it seems coherent.
The latter category (bottled/packed wine over two litres) is the fastest growing, even faster than in the first half of 2009, registering a 275% increase compared with the whole of 2008. Obviously this is filling the gap left by the rapid decline in locally bottled imported bulk wine. Ukraine and Spain control 50% of this market with Argentina, Brazil and Italy catching up. What comes from Ukraine incidentally is mostly re-exported Moldavian bulk wine (bottled, packed or as is).
The bottled (or packed) wine in containers of less than two litres is now the leading import category with a 41% share of all imports. Here there is a change, with France having overtaken Bulgaria to claim first place. This doesn't mean that France increased its exports to Russia, however, just that they declined less steeply than those from other countries. The total decrease of bottled wine imports is -20%, varying from -2.4% for Moldova to -52.2% for Bulgaria in the top 10 countries of origin. The only country that has showed growth is Italy (+5.5%).
Sparkling wine imports showed very little change (-6,6% compared with 2008), with Italy still holding the lion's share with 8.4 million litres (45.6%) - viva Asti Martini! France (third most important source) is 22% down, Ukraine (second) is 48% up and that's it.
Russian wine and 'wine'
As for wine produced in Russia itself, if we look at the corrected figures of MIWC we see that local wineries declared 225 million litres of wine produced during 2009. The wine bottled in Russia in 2009 accounted for 690 million litres. This means that Russian grapes account for 32% of national production needs and 20% of national consumption, this last figure having been confirmed to Jancis after her visit to Russia in September 2009. The question is how do you produce a total of 690 million litres from 225 million litres made from Russian vines and 106 million litres of imported bulk wine?
Most of the wine imported in bulk is chaptalised and diluted with water down to 10.5% alcohol from the initial 12-13%. If one assumes that most locally produced wine is treated in the same way (sugared and diluted), one can account for 60% of the liquid bottled as 'wine' in Russia. What is the remaining 40% then? There are two possibilities or a mix of both: either Russian customs consider the flexi-tanks as 'packed wine in volumes of more than two litres' (and that will cover another 23%); or all the rest (or part of it) is a chemical mixture of water, spirits, sugar, colouring and aroma substances that is declared, state certified (sic) and sold as wine! This means 200 to 230 million litres of fraudulent wine is officially sold on the market every year.
Russian wine producers may strive to make good wine by world standards, but clearly some of them are also importing wine in bulk and there are no official controls on whether it is bottled separately, or perhaps in some cases used to raise the quality of their own production. A second set of laws that should presumably regulate wines of denominated origin has not yet been adopted as the state is busy as usual regulating vodka production. You can find Russian wines stating 'appellation of origin' in English (with the name of the appellation missing) on the front label even though this has no legal meaning at all.
With the economic crisis, the supermarket shelves are filled with cheaper and cheaper wine. Even in Moscow, which had tended to overlook the traditional Soviet taste for sweet wines, you can find more and more semi-sweet wines not only imported in bulk and bottled locally but also produced and bottled in Chile, Spain, Argentina, France etc and imported by unknown entities. On the other hand, Russian wineries have started to release 'top cuvées' at incredibly high prices such as Myskhako's barrel-aged Chardonnay that trades at the price of a good Chablis, or Gai Kodzor's wines at the price of Châteauneuf (their consultant is Alain Dugas from Château la Nerthe). But even local wine critics generally supportive of the local wine industry find it difficult to understand how the producers can ask for such prices.
The new customs union between Russia, Belarus and Kazakhstan formed in January 2009 has created an additional mess in wine imports with the new licences. Rumours are that Russia not only took the licensing system from the neighbouring countries, but also that the state plans to adopt their national standards. Our neighbours did not invent them but merely translated the EU ones. This gives us hope that sooner or later the Russian wine market will not be as messy as it is right now. The question, however, is when?