Russia's Wine BOOM: Foreign Imports CRASH!

By Rhod Mackenzie

In Russia winemaking and consumption are both showing rapid growth with foreign wine imports plunging plus Russia's wine exports are also growing to places like China and Turkey.Plus the imports of foreign wines to Russia have decreased by over 50% in the last three years. This development coincides with the significant increase in Russian winemaking and its consumption. Plus last year, domestic winemakers made considerable profits. Plus their sales are expected continue to grow even more this year. Moreover , Russian wine is gaining traction in new markets, with a recent export success to the Chinese and Tmarket.
That is not to say every thing is rose ( and yes the pun was intended) However, the industry is also facing some obstacles and challenges. What are the hurdles they now face?
Since 2022, wine imports to Russia from foreig countries like France,Italy ,Portugal and Spain have decreased by 50%, resulting in a significant increase in domestic wine production and of course consumption.
According to the International Organization of Vine and Wine (OIV), Russia's wine imports are expected to decrease by another 50% by 2025, primarily due to Russia's increased customs duties on wines from certain countries to 25%.

The Russian government introduced duties with the aim of protecting the domestic market from competition and providing it with the opportunity to develop.It was also a way to punish those countries who rabidy supported
However, this change was gradual. Firstly, the rate was increased from 12.5% to 20% in August 2023. In 202, the rate was increased to 25%. S the result and impact is evident: a twofold decrease in imports.

Now Russian grape growers winemakers took advantage of this favourable situation and increased their production volumes. Since the start of the special operation in Ukraine in February 2022, wine production in Russia has increased by a around 40%. The most significant contribution to this growth was made by the wine regions of the Black Sea coast, primarily the Krasnodar Territory and Crimea.
"These have the effect of increasing substantial retail prices of foreign wines in the Russian consumer market. This has inevitably lead to a rise in the cost of products, which has limited the availability of foreign alcoholic products for end consumers.
Conversely, these measures contribute to the activation of the development of national winemaking, thanks to the receipt of significant advantages by domestic producers over international suppliers," says Svetlana Ilyashenko, associate professor of Trade Policy at the Plekhanov Russian University of Economics.

However, she also notes a significant increase in prices for wines from New World countries, including Argentina, Chile, Australia, New Zealand and South Africa. "This is due not only to an increase in customs duties, but also to a significant increase in transportation costs and the instability of global currency markets. As a result, it is necessary to finance purchases in advance, as the entire logistics cycle, from the moment of prepayment to the actual receipt of products at importers' warehouses, takes a long period - from three months to six months. The high key rate of the Central Bank of the Russian Federation makes credit very expensive," says Ilyashenko.

The analyst also notes that the seasonal nature of wine production can have a negative impact, with shipping dates depending on the harvest period. As the analyst explains, the general inflationary pressure that has been observed on the world market of alcoholic products in recent years is exacerbating all these unpleasant factors.

The decline in imports is, naturally, advantageous for Russian winemakers. Last year, domestic wine consumption in Russia amounted to 8.1 million hectolitres, equivalent to more than 1 billion bottles. Meanwhile, the production of vodka, a traditional Russian drink, fell by 26.3% and reached its lowest levels in the last decade.

"The vacated niche in the market began to be occupied by Russian producers. Several factors contributed to the growth of domestic production. Firstly, state support has been essential. In 2020, a law on viticulture and winemaking was adopted. Tax breaks and subsidies for vinyards was also provided. Secondly, investment in wine regions has increased. Thirdly,
"The preferences of the Russian population have evolved. Younger demographics are increasingly opting for low-alcohol level beverages, including wine, and are consuming strong alcohol less frequently."

As Maxim Chernigovsky, associate professor of the management department at the Presidential Academy in St. Petersburg and head of the Club of Alcohol Market Professionals, explains.
Last year, Russian winemakers experienced a substantial increase in profits. Consequently, the Abrau-Durso group reported the highest EBITDA in its history, with a 51% increase in 2024, reaching 4.3 billion rubles. The company has announced a 43% increase in net profit, reaching 1.8 billion rubles.
Fanagoria achieved revenue of 8.6 billion rubles, marking a significant 46% increase. The company's net profit saw a substantial increase of 61%, reaching 1.6 billion rubles.

Sparkling Wines (producer of Lev Golitsyn and Saint Petersburg wines, and Forest Cat whiskey) increased its net profit in 2024 by 39% to more than 1 billion rubles.

However, in 2025, winemakers do not anticipate that the current enormous growth trend will continue, and instead foresee a moderate increase in operating indicators, with revenue estimated to rise by 5-10% on an annual basis.
This is generally a positive indicator, however higher prices limit their potential to generate further revenue. In light of the recent increase in import prices, there has been a corresponding rise in the cost of domestic bottles.
It is evident that the Russian populace is not willing to incur additional costs. For instance, in the previous fiscal year, high-end spirits such as whiskey experienced a surge in prices, resulting in a swift decline in sales. This year, it appears that consumers have come to terms with the rise in prices, since demand for strong spirits, excluding wine, has almost fully recovered to the 2024 level during the initial six months of 2025, according to RATK.

"The majority of Russian wines are currently sold in the mid- and premium segments, with a price range of 500–1,500 rubles per bottle.
In this regard, they are able to successfully compete with European counterparts. Sparkling wine sales are increasing rapidly, with a 25% growth predicted for 2025. This growth indicates a shift in consumer preference, with sparkling wines becoming a viable alternative to imported champagne.

Chernigovsky is quoted as saying: He asserts that Russian products are distinguished by their unique character brought about by the soil and the climate of the regions and emphasis on autochthonous or idigenous grape varieties.
However, the industry still faces significant challenges. It is evident that our companies utilise the same imported wine material in their production processes. This is due to the recent rise in the price of imported wines, which has led to a corresponding increase in our own products. "The primary challenge lies in the limited availability of domestic grape raw materials.
High excise taxes reduce the competitiveness of wine compared to beer and vodka, and regional bans on sales in catering reduce turnover," says Chernigovsky. He believes that, for the industry to grow sustainably, it is necessary to expand the area of vineyards to 180-200 thousand hectares from the current 105 thousand hectares, reduce excise taxes and grant temporary permission to use imported wine materials from friendly countries until the shortage of raw materials is eliminated.

It is evident that Russian wines have considerable export potential. It has been noted that the Chinese market has seen significant growth in the last two years. Last year, Russian wine exports to China reached $1.4 million, which is 8% more than the year before. Exponential growth in supply is already being seen as far as 2025. In Q1 of 2025, exports in money surged by 4.3 times to $1 million, and in volumes, there was a notable 3.2-fold increase to 700 tons.

"The Chinese market, with its growing demand for wine, represents a significant opportunity. However, to consolidate its position, investment in promotional activities will be essential."
Chernigovsky is of the opinion that... In China, our wine is considered premium.
According to the source, Russian winemaking has the potential to double its production in the coming years, provided that issues regarding raw materials and taxation are addressed, and a concerted effort is made to penetrate foreign markets.
The standout? Sparkling wine. It made up nearly two-thirds of all Russian wine imports into China during Q1 2025, and its presence surged most noticeably in March — a stark contrast to the same month last year, when not a single bottle of Russian bubbly crossed into China.
This export leap isn’t just limited to China. Of the roughly 1,000 metric tons of Russian wine exported worldwide in Q1, China accounted for a massive 72%, followed by Turkey at 18%. Clearly, China is now the dominant destination for Russian wine.
In contrast, the segment of strong alcohol is experiencing an opposite trend. Vodka production decreased by 11% in the first half of 2025 compared to the same period last year. Chernigovsky attributes this to two key factors: the rise in excise taxes and the 21% increase in the minimum price. Changes in consumer habits are also having an effect. "Young people, having a smaller budget, have become less likely to purchase both vodka and expensive strong drinks, although retail sales of whiskey, rum and gin are growing," the analyst adds.