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By John Helmer, Moscow

The Massachusetts philosopher Ralph Waldo Emerson was making a mistake when he claimed “there are only ten minutes in the life of a pear when it is perfect to eat.”  Although he grew pears himself, Emerson isn’t known to have made them into pear cider, also known as poiré in France, perry in England.

Russians understand how to prolong the pleasure of consuming pears by turning them into cider. And so, despite the efforts of the warmongering English, Poles, and Czechs to cut off the supply of pear concentrate from which, until the sanctions war began, Russian pear cider producers bottled their drinks, the Russian taste for it continues to grow. Known as пуаре after the French name, pear cider has been steadily gaining in sales volume of the market for light alcohol drinks.  Friendlier foreign sources of pear concentrate, sanctions-busting alternate trade, and state-backed  investment in the planting of new Russian pear varieties are all substituting in the domestic cider market.

According to Vadim Drobiz, “the import of pears concentrate has not been influenced too much [by the sanctions war].” Drobiz is the national expert on the alcohol market; he is the director of   the Centre for Federal and Regional Alcohol Markets (TsIFRRA). “There have been changes in domestic consumer tastes and preferences, and so the [cider] producers have followed them. There are many ways in which the sanctions and prohibitions on import of different goods can be avoided, and these are widely used.”

All the English, Poles and Czechs have managed to do is to make pear cider a state secret. This secret is profitable enough that the Russians don’t care if the enemy thinks the cider market is going pear-shaped. For that reason, no Russian poiré producer or bottler will talk on the record to a foreign correspondent reporting in English.  They say ваше здоровье! Cheers! instead.

In the pear world, China leads by far with production of more than 16 million tonnes of the fruit, according to the published results for 2020.  That outstripped Italy, the US, and Argentina with about 600,000 tonnes each, followed by Turkey with 545,000 tonnes. On the global map for 2020, Russia reportedly trailed with about 72,000 tonnes. The volumes indicate that allied and friendly-country sources of pears and pear concentrate for Russian cider-makers to turn into cider starts with China, Argentina, and Turkey.


Source: https://en.wikipedia.org/

Two years later, the statistics published for 2022 indicate production gains in the allied and friendly-source countries, China, Argentina, South Africa, and India – plus a significant increase in pear production in Russia itself.   The latest US Department of Agriculture report for December 2022 suggests that Chinese pear farmers are cutting down their trees and reducing production because the profit margins for fresh fruit and for juice concentrate sales have been falling.  By contrast, Argentine output of pears is accelerating.   

Source: https://www.statista.com/

Russian imports of fresh pears and other fruit from China had been suspended for two years until March of 2022, days after the start of the Special Military Operation. Officially the ban was imposed because of the phytosanitary evidence of pest infections risking the health of domestic orchards. Protection of Russian apple and pear growers was also a factor. The war has changed these calculations by the Russian government.  Accordingly, Russian pear growers are now applying for state protection from the war impacts.

Although Poland falls short of ranking on the global scale as a major producer of apples and  pears, until this year it has been the largest exporter to Russia of pear concentrate. The Polish share of the market came to 50%; Argentina, Czech Republic, Finland, and the UK trailed with 12.5% each.    The sourcing of replacement supplies takes time, money, and marketing expertise, but the story of Russia’s adaptation for pear cider is the same in microcosm as the story for oil, gas, coal and every other Russian product – smuggling, alternate trade, substitution, concealment, state planning, growth of production. The point of the Russian poiré story is defeat of sanctions.

Source: https://kodtnved.ru/

For a country without a traditional taste for pear cider and few orchards producing the bittersweet varieties best suited to fermentation, it is remarkable that there are currently five major brands on the mass market, not counting the regional artisanal products.

Pictured are the main Moscow pear cider brands. The British have dozens --  -- the French likewise.  Most of them are artisanal – they are little known outside the areas where the fruit is grown and pressed.   Poland, a major producer of apples but not of  pears, had not been a producer of cider until recently, and pear cider is still little known there.  Then with the start of the Ukraine war in 2014, Russia cut off its importation of Polish fruit, severely damaging Polish cider for the domestic Russian market and Polish farmers, especially those in the southeast bordering the Ukraine, where Polish support for the war against Russia has been greatest.  

Following the start of the Special Military Operation last February, the abrupt cutoff of supplies of imported concentrate led to a decline of pear cider availability and consumption, and a shift by Russian cider drinkers to apple cider. Sales of imported apple and pear cider, other fruit juices, and Russian mead dropped. But production in Russian apple orchards has increased.

For the story of Russian mead, read this.    For the impact of Russia’s counter-sanctions against Polish apples, click;   and for the Russian oligarch attempt to capitalize on the protected domestic apple market,  there’s this.  

Russian production and consumption figures are issued by the government’s Federal Service for Alcohol Market Regulation (Rosalkogolregulirovanie). These show that between 2018 and 2021 production and consumption of cider was stable to growing, taking just 1% of the alcohol market as a whole. Pear cider amounted to about 10% of the cider and mead market.

In 2022, because of the war sanctions and cutoff of concentrate from Europe, poiré production and sales dropped sharply, and so Russians moved to other light alcohol drinks.

Alexander Kazakov, Chairman of the National Association of Traditional Cider Producers, told Kommersant newspaper last week  the decline in the sale, import and consumption of poiré is temporary for the same reason as last year’s figures. He was joined by a spokesman for a well-known orchard brand in expecting a 10% to 15% annual growth in sales as the pear orchardists bring older trees into fruit and plant new varieties.

Alexei Axel, the head of the Volkovskaya Brewery, has told the Kommersant  in Moscow  that until the war poiré occupied about 10% of the total cider market, and that the immediate reaction of the producers in March was to switch their production to different fruits and to a change of assortment in their retail portfolio, depending on the supply chain for concentrates and aromatic additives. Baltika, for example – a Russian unit of the Danish Carlsberg group —  made a switch from its Somersby cider brand to a beer.

Kommersant reported a different story from one of the largest cider producers, the Anheuser-Busch InBev Efes group. Maria Dementieva, the current marketing director, has told Kommersant that in the first eight months of last year, it took second place in the Russian cider market overall, and that its sales were increasing. In December the group introduced its first pear cider brand,  and the group is planning to expand its pear cider brand portfolio this year.

The Russian poiré is benefitting directly from the war sanctions because Anheuser-Busch, a Belgian multinational company, was forced into selling its Russian assets to Efes of Turkey at a book loss of $1.1 billion.   This in turn triggered a 10% drop in the share price, and the loss of almost $20 billion to the European and American shareholders of the company.  There are corroborating reports from the other large cider producers in the Russian market. Kommersant has reported that Mr Fox, the Russian cider brand produced by the Dutch Heineken group, has increased its sales by 26% to reach a market share of 59%, the leader. This was despite the announcement of the company, amplified in the US media,  that Heineken was exiting the Russian market because its business “is no longer sustainable nor viable in the current environment. As a result, we have decided to leave Russia.” Heineken declared a balance-sheet loss of $438 million. The Dutch share price also collapsed with a far bigger loss to the shareholders.  

From the Russian point of view, the setback in imported concentrates and cider sales has been a short term one. The market data suggest  it took roughly six months from the start of the Special Military Operation for the producers to develop the new supply sources and logistics they needed in order to bypass the obstacles thrown up by the US and NATO measures.  The long–term prospect for domestic poiré now is for growth of sales with cheap, almost confiscated foreign capital,  working on a lower domestic cost and higher profit base than the enemy state companies allowed when they controlled the Russian market. None of this the domestic poiré producers wish to tell the foreign press.

The next step for Russian poiré is to secure state planning and financial support, Soviet style. According to what the producers and officials are now telling the Moscow business press, the ministries of agriculture, finance, and economic development, and the inter-government committee on war planning,  are now considering proposals from the producing companies and the orchardists to grant cider the same agricultural product status as the Russian winemakers already enjoy. This status, which must be enacted into the tax law and the budget, would allow state support to commence for the fruit farmers and investors.

There’s one problem to solve, however. Russian winemakers grow their grapes on Russian soil, particularly now in Crimea. Apple cider and poiré produced and sold as Russian products are up to 90 percent-fabricated from imported ingredients. Pears grow more slowly on the tree than wine grapes on the vine, and so for Russian orchards to increase their supply of the fruit and concentrate required to the level qualifying for state support will take several years as the new orchard trees mature. The latest figures indicate that in 2021 over 60 million litres of apple and pear cider were produced in Russia, but only 3.5 million litres (6%) were drawn from domestic fruit.

There are legal ways in which the apple and pear orchardists will be able to qualify, especially if they have the Russian agro-industrial combines, controlled by sanctioned oligarchs, behind them with cash and lobbying the government in front. Read more on who, before the war, controlled the Russian farmlands, the potato harvest and the French fries market.   Here’s the story of the land banks and pork oligarchs.  And the sugar oligarch file.

 June 23, 2016 -- source: http://johnhelmer.net/

If the government officials agree to the cider proposals, this will open the state war economy plan and state and regional budgets for money to subsidize the running costs of family or small farmers, agricultural machinery lease charges, modernization of the fruit processing mills, and much more. The tax the poiré businesses will pay the state will be cut to just 6% nationwide, while in some regions like Moscow, there is a zero-tax holiday for new food and beverage processors. The cider-makers will also be eligible for relief of VAT, land tax and transport tolls.  

Kazakov has told Vedomosti newspaper for the producers that they expect to gain a tax deduction that will significantly exceed the amount of excise their products are required to pay at present. Today the excise tax rate on cider in Russia is at the level of 24 rubles per litre. The average price of a bottle of traditional cider (0.5 – 0.7 litres) is about Rb110 – 120, including the excise duty.

Source: http://www.yablochny-spas.ru/

For the time being also, the cider makers cannot receive subsidies for planting orchards, Oleg Gorelov, chief executive of Yablochny Spas (“Apple Angel”),   one of the largest apple and pear cider producers in the country,  has told the Russian press. But if the government agrees, he anticipates, both the industrial sized farms and the small orchardists will be able to draw on the full range of state support so long as they produce low-alcohol drinks up to 6% proof.

Left to right: Vadim Drobiz of TsIFFRA;  Alexander Kazakov, Chairman of the National Association of Traditional Cider Producers;  Alexei Axel, Volkovskaya Brewery; and Maria Dementieva of InBev Efes. For the wartime reason, Kazakov, Axel, and Dementieva were unwilling to speak to a foreign correspondent.

The orchardists and cider producers are predicting that with state planning and budget support, and also with the removal of Belgian, Dutch, English,  and other enemy-state companies from  market competition, there will be “explosive” growth in Russian production volumes and sales. This will be boosted also by domestic tourism, they say,  on the model of the Herefordshire cider circuit and the Normandy cider route.  At present, apples and pears are grown commercially in only six Russian regions. With fresh war  incentives and investment, however, they can be grown in 76 regions of the country.

Footnote for warmakers:  the enemy-state beer companies which withdrew from the Russian market last year are now counting additional losses from the smuggle supply routes and alternate import trade which are replacing many of the brands that were temporarily cut off last year. Reporting by the Russian branch of the NielsenIQ group indicates that the temporary impact cut the market representation from 35 to 18 brands of imported beer with Russian licences. By October 2022, however, this number has grown back to 22. At the same time, the imported beers had become significantly more expensive for Russian consumers, while the profits were taken, not by the Belgians, Dutch, Germans or Americans, but by the intermediaries in the allied and friendly states. This price effect has also benefited the Russian beer brands which have grown from 78 to 80 positions, and added at least two percentage points of market share at the expense of the foreign beers.   For the archive of the war on the beer front, read this.  

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