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By John Helmer, Moscow

There’s one way of winning a war while keeping the home fires burning as normally as possible;  and another way of losing a war while keeping the home fires burning as normally as possible.

The first way is to stock up on champagne, as they are doing in Moscow.

The second way is Washington’s: that’s to send armoured units, combat uniformed  police,  and media reporters in helicopters to a village to capture a boy in his night shorts. You already know all there is to see   – if not to know — about the second. Here is what to know in addition.  

In Moscow, the news just in, according to Tass,  is that “in the first quarter of 2023, the production of champagne in Russia increased by 14.4% to 2.5 million decalitres relative to the indicator of 2022”. Also, “the government did not support the idea of posting a warning on every bottle, on ‘Alcohol is your enemy!’”

In this war, Russians know exactly who and what the main enemy is,  as they keep telling the domestic pollsters. It’s the US.  


Source: https://www.levada.ru/  reported in November 2020. Earlier polls are reported here.  The most recent Levada poll, published in February of 2023, shows that since the special military operation began a year ago, Russian identification of the US as the principal enemy has jumped to 73%. Sentiment has also hardened against the European Union and the Ukraine which are now judged enemies by 69%. On the positive side, Belarus and China lead as Russia’s friends – 92% and 85%, respectively.  

On the course of the war itself, however, Russians are very reserved. They are reluctant to talk to pollsters; they refuse to discuss the war around the dinner table.

By contrast, there is deep and also measurable public optimism about the position the country is currently in, and the direction in which it is headed.  This optimism has been rising steadily through President Vladimir Putin’s term; in February of this year it was at its highest level since the polling began in 1996 – 68%.

Source: https://www.levada.ru/
 Americans by contrast are approaching historical highs in their reported pessimism towards  the direction the country is going – between 75% and 63%, last July to this month.   

Is the drinking of champagne the Russian way of expressing confidence without minimizing the painfulness of the topic?

Follow the archive of reporting on the ups and downs of the Russian champagne market since 2012 here.  

Source: https://johnhelmer.net/

Vadim Drobiz, the expert on the Russian alcohol market and director of   the Centre for Federal and Regional Alcohol Markets (TsIFRRA), explains the commercial dynamic: “The demand for sparkling wines has risen since 2020 by about 25%, so have  the sales volume and the imports. Last year the production in Russia was about 220 million litres. The reason is in the decision in 2020 to abandon the category of ‘sparkling wine drinks’ which were very cheap and of low quality. Moreover, consumers of wines – mostly the middle class – have started to prefer sparkling wines instead of still wines.  The rise of production and consumption can be seen in all price segments. If to speak of of the regional shares of this sparkling wine production, the picture is as follows: the Krasnodar region – 57%, Crimea and Sevastopol – 14%, St. Petersburg – 13%, Dagestan – 6%, other regions – 10%.”

Production figures for the January to March quarter of this year show that while output of alcohol drinks was roughly stable – up 0.1% for 38.5 million dal (excluding beer and cider), vodka production dropped 8.5% to 15.9 million dal, cognac down 1.1% to 1.9 million dal. In January and February, according to the state alcohol market authority, Rosalkogolregulirovanie (the Federal Service for Alcohol Market Regulation), there was an increase in wine production acorss the country of 10.2% to 3.4 million dal. Champagne production for the same period amounted to 1.7 million dal, an increase of 25.8%.

In parallel, the Russian wine market was defeating US and European sanctions and increasing imports of wine, especially from Italy, Spain, Portugal and Germany. The volume of wine imports from France was virtually unchanged compared to 2021. Italian imports jumped 19% to lead the wine import market by a very large margin over Spain and France.

Source: https://www.rbc.ru/

In this analysis by RBC, published in February, the effectiveness of parallel imports schemes to evade sanction is plain. “Despite the problems with logistics and restrictions, the volume of wine supplies to Russia not only did not decrease in 2022, but even increased. Italy is still the import leader, Uzbekistan showed the fastest year-on-year growth in supplies.  Based on data from the Federal Customs Service (FCS), which was provided to RBC by one of the participants in the alcohol market, in January—December 2022, distributors imported 405.1 million litres of wine into the country – still, sparkling and fortified wines.  The volume of imports was 10% more than in the twelve months of 2021. The aggregate data concerning the volume of supplies and the largest importing countries were confirmed by two other market participants.”  

Because of the war conditions, and to deny the enemy information on how the sanctions war is being defeated, the Federal Customs Service does not respond to questions about the wine import trade. Customs suspended publication of export and import data from the end of February 2022.

The press service of the FCS did not comment on the substance of RBC’s request for compliance with data on wine imports in 2022, recalling that they temporarily do not publish data on foreign trade operations. The publication of FCS statistics on exports and imports has been suspended since the end of February 2022 “in order to avoid incorrect estimates.”

The biggest losers in the Russian import market have been American and Australian wines. The Europeans have simply evaded their government sanctions by exporting to Russia through Turkey, Dubai and other trading hubs.

The head of the Wine Retail Information Centre, Alexander Stavtsev (right), noted with some irony that for Russian wine importers and consumers, Italy remains “systemically important” with what he calls the “rule of the three Ps” – Prosecco, Pinot Grigio, and Primitivo — which are  always and plentifully available in all types of retail outlets, from the premium supermarkets to the cheapest cash-and-carry stores. Stavtsev also recalled that one of the significant events for wine importers in 2022 was the way in which they compensated for the sanctions disruptions by changing their planned delivery schedules so as to amass stocks earlier in the buying season than usual. In August to October advance stocking caused a 43% jump in wine imports from the European Union countries in 2022, compared to the year before.

Usually, the surge in Russian wine imports takes place in the fourth quarter — well before the New Year  holiday season. But now alcohol sales have surged earlier and then returned to normal only in the last two weeks of 2022. This indicates that suppliers have formed a very sizeable back-up in stocks to guard against war disruption risks. At the same time, this encourages more intensive competition for retailers to promote turnover when demand has been lagging as it usually does in the year’s first quarter,   Stavtsev says.  

There are less optimistic forecasts for this year. “The growth rate of wine imports, Alexander Lipilin, Executive Director of the Fort wine trading company, also expects a continued increase in the import of spirits in the conditions of replacement of the brands which have exited following sanctions. However, he also believes demand is dropping as consumers try to save their money and spend less on consumption. The trend may become clear at the end of the second quarter, when consumers may switch lower priced alcohol drinks.”  

Sugar content and bottle price — these distinguish between the main types of champagne on the Russian market. The main areas for vineyards and harvesting are the North Caucasus and, above all, the Krasnodar Territory. The champagne factories, however, are close to the consumers in the large cities — Moscow, St. Petersburg, Rostov, etc. The two main types of champagne are the traditional Soviet champagne, which has kept the sweetness which was characteristic of the original French champagnes, and the newly established dry Russian champagne varieties. In the production of Russian champagne, it is allowed to use wine materials of non-champagne grape cépages,  as well as imported wine materials, if they provide the established level of quality of champagne. The best known Russian champagne label is Abrau-Durso. Follow its business trajectory here.  

The best of the dry Crimean champagnes are Novy Svet and Zolotoya Balka’s Balaclava (lead image).  Like the French producers of sparkling wines in the Loire and Rhone regions, and the Italians producing prosecco in Veneto, the Russians have worked out that consumers prefer the grape varieties which go into their bottles to those of the designated Champagne region.

Visit the Novy Svet vineyard at in Crimea.   And the Fanagoria vineyard in Krasnodar.  For background, read this.  

These market dynamics, especially the sanctions war,  give an advantage in the Russian market  to the best capitalized and largest retailers at the expense of smaller groceries and specialized distributors. According to the results of the past year, the X5 Group, Russia’s largest food retailer controlled by Mikhail Fridman,  became the largest importer of wine for the first time.  Based on the data available to RBC, in 2022 the company increased its own supplies by 62% to 34.9 million litres overtaking alcohol distributors Luding Group and Simple Group. They, in turn, increased imports in kind by 3% and 19%, respectively: Luding imported 30.1 million litres of wine; Simple about 21.2 million litres.

The wine display at an X5 Pyaterochka supermarket in Purpe, a remote Yamal-Nenets town in Siberia.   The licensing and other trade restrictions on the supermarket trade in wines in the US do not apply in the freer Russian market.  


In an expert rating by Wine Guide of Russia for the best domestic sparkling wines in December 2022, these are the four best, left to right: High Bank Riesling, Mishako Cuvée, Aristov’s Cuvée Alexander, and Terroir of Kuban. Read more, with prices, here.  Here is a rating of the four best Russian champagnes.  

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