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Wine in Russia

Russia wine market: Increasing number of small Russian wine producers

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2014-03-31 06:29:03 - Wine in Russia - a new market research report on

Russian wine is highly fragmented with no clear leader present. Others represented 62% volume share in 2012, reflecting the considerable number of producers, importers and brands present. One notable trend however, is the growing number of small Russian wine producers, who own their vineyards and are focussed on producing wine of a high quality. If their presence continues to increase in the upcoming years, it can be expected that these domestic players will gradually win some share from foreign importers.

Despite recording growth over the review period, given rising interest in European lifestyle trends, wine experienced difficulties given the pressure of stricter government regulation: possible minimum pricing regulations; restrictions on trading hours and sales channels; ban on advertising alcoholic products; and



strenuous import controls, which demand that importers require separate licenses to import wine and then distribute it in the country. When taken together, these factors, in conjunction with the moderate popularity of wine in Russia, hampers stronger development of Russia´s fledgling wine culture.

Industry experts and analysts generally agree that Russian wine carries significant growth potential, driven by a new generation of younger wine-drinkers with higher levels of disposable incomes. There is no doubt that the review period witnessed a struggle as a consequence of legislative changes, which dramatically increased prices on alcoholic drinks, and placed restrictions on trading hours, locations as well as advertising. Another key influence in the sluggish performance of wine is the fact that Russia fundamentally remains a vodka and beer country, and as such wine is unlikely to achieve the levels of popularity witnessed in other European countries.

The forecast period however, is projected to register a volume CAGR of 3%, as the category adjusts to recent changes and better quality wines make their way into the mass market. The development of mid-priced wine will be crucial to the establishment of a solid wine culture in Russia.

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