How to Make Wine Russia's New Oil, by Katya Zorina for VZGLYAD. 08.06.2024.
Ten years ago, on August 6, 2014, so-called food counter-sanctions were introduced in Russia – restrictions on the supply of foreign agricultural products. These measures became the basis for many others aimed at increasing Russia’s food independence. And results were achieved even in areas where domestic agriculture was experiencing a deep crisis – for example, in winemaking.
Global wine consumption has fallen to its lowest since 1996. In 2023, 22.1 billion liters of wine were consumed worldwide, compared to 22.7 billion liters the year before. The reasons for the decline include rising wine prices amid the energy crisis and a significant – 25% – decline in wine consumption in China. A decline was also observed in the United States, Italy, France, Great Britain and Germany.
In Russia, people also began to drink half as much wine compared to Soviet times , and its production was reduced, but recently a different trend has been observed. In particular, according to the results of 2023, our country showed a 3% increase in wine consumption compared to the previous year, taking seventh place in the world in this indicator. This is evidenced by data from the International Organization of Vine and Wine.
Accordingly, wine production in Russia has also been growing in recent years. In the first half of 2024, “wine production increased by 21% across the country,” says Irina Fedina, deputy director of the Department of Food and Processing Industry at the Ministry of Agriculture. And from January to May of this year, wine sales grew almost twice as fast as strong alcoholic beverages, in particular vodka.
Production is growing, in part, because Russian consumers increasingly prefer Russian wine. According to Roskachestvo , “the reputation of domestic wine among Russians continues to improve. Every fourth Russian prefers domestic wine to foreign wine.” The share of those who believe that the quality of foreign wines is higher is decreasing: in particular, the share of those who claim that most Russian wines are inferior in quality to foreign ones has decreased from 32% to 27%. In blind tastings, it is difficult to distinguish the products of domestic winemakers from drinks from Italy or Portugal. Moreover, they often win .
Revival of Russian winemaking
Russian winemaking is experiencing a renaissance after a deep crisis provoked by the anti-alcohol campaign of the 1980s. At that time, in some traditional wine-making regions, the area of vineyards was reduced, and wine production fell to the levels of the Great Patriotic War.
For decades, the wine industry was left to its own devices, and the quality ratings for Russian wines were approaching negative values. In the 1990s, strong drinks, often home-made, and numerous counterfeit wines were in vogue (at any Moscow region market, there was four times more “Georgian” or “Moldovan” wine than those countries were capable of producing). It seemed simply impossible to pull the industry out of such an abyss.
And yet, business began to consider wine production as a significant asset already in the early 2000s, and the 2008 crisis increased this interest. Between 2000 and 2014, 64.2 thousand hectares of new grape plantations were planted in the country.
At the same time, the state began to bring order to winemaking.
The technical regulations for the production of domestic wine have begun to tighten, and restrictions on the import of wine materials from abroad have been imposed. In 2020, the law "On Viticulture and Winemaking in the Russian Federation" was adopted. It enshrined the concepts of wine with a protected geographical indication (PGI) and a protected designation of origin (PDO) and limited the use of imported wine materials.
In addition, the federal project "Stimulating the Development of Viticulture and Winemaking" has been implemented since 2022. The funds allocated by the state are spent on the purchase of seedlings and the development of nurseries, land reclamation work, fertilizers and the introduction of modern land cultivation technologies, the purchase of necessary equipment and the organization of infrastructure. Among the support measures available to winemakers are preferential loans, subsidies, grants, preferential transportation of products abroad, support for product certification, tax deductions when calculating excise taxes.
Wine and Sovereignty
Wine, although it seems to be a “light”, entertaining product, carries great significance for both the economy and everyday culture. Support for the wine industry is a significant part of state policy in the sphere of ensuring Russian food, biological and cultural sovereignty.
In economic terms, this is both a resource for filling the budget through excise taxes and an incentive to create jobs and new technologies. And not only in the industry, but also in all related areas - from equipment production to the creation of tourist clusters. A separate line is the development of selection and genetic engineering, counteraction to plant diseases - a safety issue for all agriculture.
In addition, wine is a much more complex product compared to beer or traditional distillates. Therefore, the development of winemaking is an indicator of the level of production culture, a significant part of national branding and an element of international prestige. The export of Russian wine is already actively developing. The creations of domestic winemakers are presented in China, Vietnam, the UAE, Saudi Arabia, Egypt and Turkey.
The development of winemaking helps to solve the social problem of shifting the focus of alcohol consumption from strong drinks and, accordingly, reducing the negative effects of such consumption – illness, injury, accidents, crime.
Thanks to government decisions, active investments in the wine industry, and the growing public interest in domestic products, recent years have become truly breakthrough years for domestic winemaking. If ten years ago Russian producers used less than half of domestic raw materials, and about 70% of imported wine material was used in the production of sparkling wines, today its import has practically ceased.
"Since 2019, we have seen an unprecedented reduction in imported bulk (wine material purchased by wine producers who do not have or do not have enough of their own wine material - Vzglyad note). According to our estimates, there has been a 98% reduction, there is practically no imported bulk. Of course, this has had an extremely positive effect not only on increasing the investment attractiveness of the industry, but also on improving the quality and reputation of domestic wine," noted the head of the Ministry of Agriculture Dmitry Patrushev.
During the period of the law "On Viticulture and Winemaking" the share of Russian wine in the domestic market has grown from 25-30% to more than 55% . The area of vineyards is growing. Today the total area of Russian vineyards has reached 105 thousand hectares.
Prospects for Russian winemaking
For traditionally wine-producing countries, wine is a significant source of export income. For example, in Italy, wine ranks first in all agricultural exports. Russian products have no less potential in this regard. In fact, domestic wine has all the prerequisites to become another "new oil". Among Russia's advantages are unique terroirs, autochthonous grape varieties, and developments by Soviet breeders. And most importantly, there are many enthusiasts who are completely immersed in the winemaking business.
Large nurseries are already starting up in Krasnodar Krai and Dagestan (in particular, the launch of the Federal Viticulture Center in Kuban was announced in April), thanks to which, in the next 4-5 years, the market needs will be met by more than 80%. The production of stainless steel containers necessary for creating new wines is actively developing. Hatches, cranes and other equipment are being developed, which is currently being purchased abroad.
The head of state highly praised the development of the wine industry. "Winemaking in our country has taken a serious step in its development," Vladimir Putin said in March at a meeting with representatives of agricultural enterprises in Stavropol Krai.
At the state level, new solutions aimed at supporting domestic winemaking continue to be discussed. Thus, this fall we can expect the adoption of a GOST for wine lists, which should ensure a share of at least 25-30% of domestic drinks in restaurant menus. The government is also developing a Strategy for the Development of Viticulture and Winemaking until 2050. The goal is to make the wine industry independent of geopolitical, economic and infrastructural risks.
In addition, the issue of expanding the geography of Russian winemaking is on the agenda. The traditional winemaking regions - Kuban, Crimea, the Don Valley, Stavropol Krai, Dagestan, the Terek Valley - have recently been joined by the Voronezh and Samara regions. The possibilities of creating wineries in the Lipetsk, Vladimir, Ivanovo regions, and the Far East are being explored. Experts, discussing the possibilities of developing northern winemaking, refer to the experience of monastery wineries, in particular the Valaam Monastery, and recall the unique frost-resistant varieties of Soviet selection.
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