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Read original →In vino veritas
An analysis of Russia's winemaking industry: production growth to 5.4 million hectoliters, vineyard expansion to 108,000 hectares, the impact of tariffs on prices, and dependence on imported equipment. Import substitution prospects and pricing dynamics.
AI summary
Russia has entered the top 20 global wine producers ten years after the introduction of the food embargo, taking 11th place with a volume of 5.4 million hectoliters and growth of almost 19%. Success was ensured by import substitution and state support for the industry, however high dependence on imported equipment and the introduction of tariffs on foreign wine have led to price increases for both foreign and domestic products. The key question is whether Russian winemaking will be able to become competitive without customs protection in 5 years, when the main wave of vineyards matures.
Taking a Bite Out of Burgundy
When the Russian government introduced a food embargo in 2014—effectively closing the market to cheese, jamón, and other agricultural products from the EU and US (alcohol, including wine, was not banned) in response to sanctions over Crimea—the wine market held its breath: without French châteaux and Spanish Riojas, consumers risked reverting to the "flank" of hard liquor. But things turned out differently. Over ten years, Russia not only avoided a degradation of drinking culture but also entered the top 20 wine producers.
In 2024, the International Organisation of Vine and Wine (OIV) placed Russia at 11th in its ranking of wine producers—5.4 million hectoliters. And while global production is declining (-4.8%), Russia is showing growth of nearly 19%. For comparison, the world leader, Italy, increased production by 15% to 44.1 million hectoliters, while France, in second place, actually reduced wine production by 24% due to ongoing drought. As for Russia's direct competitors in the rankings, Portugal, which holds 10th place, saw a 9% decline, while Romania dropped 20%.
Young Vines and the Low-Base Effect
The double-digit growth is largely tied to the youth of Russian wine production and the low-base effect in grape cultivation. While the European industry is already hundreds of years old (and in some regions, thousands), in Russia during the 1990s, after perestroika and anti-alcohol campaigns, many agricultural enterprises fell into decline, and vineyards either dried up or were deliberately cut down.
By 2010, Russia's plantings of technical grape varieties used in winemaking reached 60,000 hectares, while in other European countries (Spain, France, Italy) this figure approached 1 million hectares. Active recovery of the industry only began after 2014 and the return of Crimea (although a significant portion of grapes is still grown in Krasnodar Krai).