Glass Half Empty: Russian Wine Imports Withering

 


Falling currency and rising prices can make wine a bitter swill to swallow.
 
New figures show that Russia's imports have fallen drastically amid the sad performance of the ruble, according to a recent story by English-language news site Russia Beyond the Headlines.
 
“Russian importers are being forced to cut shipments of foreign wine, with a 44 percent reduction in wine imports in December 2014 as business was hit by the collapsing ruble, “ Russia Beyond reported.
 
The nation's foundering currency hammered the country's big wine importers because, according to Russia Beyond, shipments of imported wines are paid for according to the exchange rate on the date of payment in lieu of the exchange rate on the day of the order. 
 
“Businesses must currently pay two times more for wine that was imported in the summer of 2014 in respect to its cost back then,” Russia Beyond said.
 
According to exchange rate numbers provided by Russia Beyond, the ruble-to-Euro rate was 47:1 this past summer, while this past month it jumped to 77:1.
 
Russia Beyond provided an infographic detailing the country's import markets. According to the numbers, Russia's largest import market is France at 19 percent, while Spain and Italy come in second with a 15 percent share of the Russian market. Neighboring Georgia follows Italy and Spain with an 11 percent share, while Chile rounds out the top-five with a 6 percent share of the Russian import market.
The dip in imports may spell the doom for smaller countries who account for a share of less than one percent, the article said, but it also means Russian wineries may see a spike in popularity.
 
“Observers believe that inexpensive and medium-range Russian producers stand to profit from the problems with imports, while producers of expensive wines … can strengthen their positions in their segment,” Russia Beyond reported.
 
The situation remains complex, however. Russia Beyond noted that even though the current economic environment could be a boon for domestic winemakers, they'll still be hampered by exchange rates. 
 
“Today, only 40 percent of Russian wine is produced from Russian grapes, while 60 percent is produced from imported grapes,” the story said, “mainly from South Africa, Ukraine, Italy, Spain and other countries.”
 
The article used winery Abrau-Durso as an example of the currency conundrum.
 
“Abrau-Durso buys its corks from Portugal,” the news agency said, “while the wire that secures the corks is made in Italy.”
 

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