Counterfeit alcohol is big business in Russia. Decanter Magazine recently covered new steps taken by the government to do something about it.
The Independent reported in 2010 that an official from the Federal Service for Alcohol Market Regulation stated that 50% of wine and 70% of cognac on sale in Russia was counterfeit. That year around 927 million litres of wine was consumed, constituting off-trade sales of around £5.2 billion. That’s of lot of money!
To combat this Russia is introducing minimum pricing for wine, expected to be around 100 Roubles per litre, (or 75p) for a 750ml bottle. A similar strategy was taken in 2010 to combat counterfeit vodka. This has reduced the volume of counterfeit vodka sold by 25-30% and is expected to have a similar effect on the counterfeit wine trade.
75p a bottle might seem cheap but average wages in Russia are around 40,000 roubles a month, or £400. In the UK the average monthly salary is more than 5 times higher than that at around £2,200 before tax. Apparently wine retailers in Russia are concerned that setting a minimum price might drive people to cheaper alcohol.
We recently wrote about Russia increasing investment in it’s wine industry. The anti-counterfeit measures coincide with an initiative to grow Russian vineyards from 90,000 to 140,000 hectares by 2020, a 55% increase. A third of the existing 90,000 hectares was gained when Russian annexed the Crimean peninsular in 2014.
According to The Moscow Times, this is all part of a push to restore Russian wine production to the glory days of the Soviet Union. In the 1980s the USSR had around 200,000 hectares of vineyards. In contrast, France has around 867,000 hectares of vineyards.
Today Russia’s vineyards are subsidised by the government to the tune of around £5.8 million annually. This represents between 10-20% the cost of growing grapes. However, this pales into insignificance when compared to the subsidies France provides.
France receives around £9 billion under the European Union (EU) Common Agricultural Policy and will be spending an EU grant of £230 million this year just on promoting it’s wine outside the EU. French vineyards receive subsidies of between 60-80%.
Full story in Decanter.