Alcohol production in Russia

Main article: Alcoholic beverages (Russian market)

Winemaking

Main article: Russian wine

Chronicle

2024: Alcohol production in Russia decreased by 1.8% and amounted to 188.1 million decaliters

Rosalkogoltabakkontrol (RATK) recorded a decrease in the production of alcoholic beverages in Russia to 188.1 million decaliters in 2024, which is 1.8% less than in 2023 and continues the downward trend that began in 2022. RATK published such data in January 2025.

According to RBC, the most significant drop in production was recorded in the segment of grape-containing drinks without ethyl alcohol - by 64.8%, low-alcohol products - by 56.1%, and fruit-based alcoholic beverages - by 50.4% compared to 2023.

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Фото: Freepik

The decrease in production of low-alcohol products is associated with a change in the calculation procedure and an increase in the excise tax rate from May 1, 2024. The reduction in the categories of fruit alcoholic beverages and grapes is due to the entry into force of the law "On viticulture and winemaking in Russia."

Secretary of the Alcopro guild Andrei Moskovsky emphasizes that over the period from 2022 to 2024, the sales structure and range of drinks have changed significantly. Alexander Stavtsev, vice president of the Association of Retail Market Experts, sees the current dynamics as a normalization of production after a surge in 2022.

A significant increase in production in 2022 was due to increased demand and expectations of a shortage of imported alcohol. Manufacturers have increased the production of vodka and tinctures to replace imported products, in particular, inexpensive whiskey. As a result, excess stocks were formed.

In 2024, manufacturers optimized production volumes in accordance with real market demand. This decision was influenced by high interest rates on loans and an increase in the cost of components for equipment. Companies strive to avoid the formation of excess inventory by adapting production to current market needs.^[1]

2023

3.9% reduction in alcohol production to 191.7 million decalitres

The production of alcoholic beverages (excluding beer, beer drinks, cider, poiret and mead) in Russia in 2023 decreased by 3.9% compared to 2022 - to 191.7 million decaliters (dal). This is evidenced by the data of Rosalkogoltabakkontrol, published in January 2024.

According to Interfax, citing materials from the department, in comparison with 2021, alcohol production in the Russian Federation in 2023 increased. Rosalkogoltabakkontrol explains that the comparison with 2021 is given because the market, after "multidirectional trends in 2022, is stabilizing and returning to the proportions that were observed in 2021." We are talking, in particular, about reducing exports in 2022, redirecting volumes to the domestic market, import substitution. The impact of external factors on the industry was very strong, so the comparison of the indicators of 2023 with the indicators of 2022 in Rosalkogoltabakkontrol is considered not entirely correct.

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Фото: Pexels

According to Rosalkogoltabakkontrol estimates, in 2023, the production of alcoholic beverages with a strength above 9% decreased by 3% compared to the previous year - to 111.9 million decaliters. The production of grape wine decreased by 8.3%, to 29.99 million decaliters, sparkling wines - by 12.7%, to 14.1 million decaliters, liquor wines - by 19.8%, to 876.9 thousand decaliters. The production of grape-containing drinks without ethyl alcohol decreased by 87.1%, to 566.6 thousand decaliters, with ethyl alcohol - by 53%, to 37.2 thousand decaliters. Fruit production increased by 10.3% to 11.8 million decaliters.

The production of alcoholic beverages with a strength of up to 25% decreased by 96.1%, to 26 thousand decaliters. At the same time, the production of alcoholic beverages with a strength of over 25% increased - by 1.3%, to 14 million decaliters. The production of other alcoholic beverages increased by 8.5%, to 8.6 million decaliters, low-alcohol products - by 17.7%, to 22.3 million decaliters.^[2]

Decline in sales of ethyl alcohol by 2.6% to 736.4 million liters

In 2023, sales of ethyl alcohol in Russia amounted to 736.4 million liters, a decrease of 2.6% compared to the previous year. This is due to a drop in demand from producers of alcoholic beverages and the legalization of parallel imports of alcoholic beverages. Market analysis is provided in the BusinesStat study, the results of which were published in mid-June 2024.

Statistics take into account supplies of undenatured and denatured ethyl alcohol. The first is the main one for the production of alcoholic beverages and is used primarily in the food industry, and the second is used for laboratory and industrial needs, as well as as fuel. Among the key players in the industry are Tatspirtprom, Biochim, Bashspirt, Aminosib and Derbent Wine and Cognac Plant.

According to estimates, 711.2 million liters of ethyl alcohol were sold on the Russian market in 2019. A year later, sales rose 1.4% to 721.3 million liters. In 2021, a 0.8% reduction was recorded with a final result of about 715.7 million liters. In 2022, the industry returned to growth, showing an increase of 5.7% - up to 756.5 million liters.

The study says that against the backdrop of a deteriorating geopolitical situation, many foreign players in the alcohol market announced their departure from Russia. Among them - the British company Diageo (brands Johnnie Walker, White Horse, Guinness, Baileys, Smirnoff, Gordon's, Captain Morgan, etc.), American Brown-Forman (Jack Daniel's, Old Forester, Finlandia) and Beam Suntory (Courvoisier, MаCallan, Highland Park, Sauza), французские LVMH (Hennessy, Veuve Clicquot, Don Peregnon, Moët & Chandon) и Pernod Ricard (Chivas Regal, Jameson и Ballantine's, Absolut, Martell, Olmeca, Havana Club и др.). However, at the end of 2022, the Ministry of Industry and Trade allowed the parallel import of alcohol into the Russian Federation. As a result, the demand for domestic products decreased slightly, and manufacturers were forced to reduce purchases of ethyl alcohol. [In ^[3]

2022

Alcohol production rose 2.24% to 1.01 billion decaliters

The production of alcoholic beverages of all types in Russia in 2022 increased by 2.24% compared to 2021 and amounted to 1.01 billion decalitres, follows from the data of the Rosalkogolregulirovanie (RAR), which became known on February 21, 2023.

As RBC writes with reference to the statistics of the RAR, about 199.5 million decaliters of production accounted for strong alcohol, wine products and low-alcohol drinks. The bulk of the output was occupied by beer, cider, poiret and mead (811.8 million dal).

According to RAR estimates, retail sales of alcohol, including beer, in 2022 increased by about 1% - to 1 billion decaliters. The department indicated that the growth of legal retail sales and production volumes is associated with the process of "whitewashing" the market, reducing the share of illegal products and abandoning consumers.

In 2022, overproduction of all types of alcoholic beverages, especially strong drinks, was observed, says Vadim Drobiz, director of the Center for Research on Federal and Regional Alcohol Markets (CIFRRA).

Each manufacturer hoped that the imports would "disappear," and it was necessary to have time to fill the market with their products, but already in the fourth quarter of 2022, a decrease in production could be observed in some sectors - companies harmonized production with market requests, the expert explained to the publication.

According to him, the production of Russian rum, whiskey and gin increased due to the substitution of imports, but a significant increase in their consumption was not observed. According to Drobiz, in 2023, alcohol production in Russia will be stable, and imports will continue to recover.

Vadim Drobiz added that in 2022, alcohol consumption demonstrated trends usual for crisis times: purchases of strong alcohol grew, and sales of wine products, on the contrary, decreased.^[4]

Growth in 1 half of alcohol production by 9%

On October 13, 2022, the Gradus agency shared the results of a study of the elite strong alcohol market. The company's experts made a cut into the main commodity categories and analyzed exactly how the situation in this market segment has changed over the past year. The studies considered sales of 5 categories of strong alcohol, which included cognac, premium vodka, costing from 459 rubles per unit of goods, whiskey, rum and gin. We compared the period from February to June 2021 and the same period in 2022. Integrated OFD data enriched with field studies in retail chains are based on.

The demand for alcohol Russia in is still strong, despite the decline in real income population and short-term impairment ruble in the spring of 2022. According to, in the to data Federal Service for Alcohol Market Regulation 1 half of 2022, alcohol production in Russia increased by 9% in annual terms to 83.8 million DAL. The demand for domestic alcohol grew quite strongly in the 1 half of 2022 year compared to the same period of 2021 due to a decrease in sales of imported alcohol due to the departure of a number of foreign brands and sanctions from Western countries. Due to sanctions the import of strong drinks in Russia in the 1 half of 2022, it fell by 35% to the same period in 2021. In addition to reducing imports, in 2022, such large world producers of strong alcohol as Diageo Brown Forman, and a number of Maxxium Russia other well-known brands left Russia. In the absence of world brands of strong alcohol, their niche very quickly began to fill with domestic products, primarily premium segment vodka.

Consumer preferences have not changed. The most popular strong alcoholic beverage in the upper price segment remains cognac, vodka is only in third place after whiskey.

At the same time, it can be noted that sales of strong alcohol are very dependent on the dynamics of the average retail price. So in February-July 2022, the maximum annual growth was shown by gin sales expressed in DAL, an increase of 50% year-on-year. And in units of sold bottles (in pieces), gin sales increased by 55% in annual terms to 14.3 million units. The reason for this increase in gin sales was a decrease in prices for this drink by 1.1% in annual terms. Basically, the share of Russian manufacturers increased from 50.52 to 56.02%, and the share of the main competitor, Great Britain, in this segment decreased from 37.8% to 28.51%.

Regardless of price, sales in 2022 are higher than in 2021. In 2021, the seasonality of sales was traced (spikes in March and May), and in 2022, consumption volumes became more uniform. In February 2022, the volume of consumption was 46% higher than in February 2021. By April, consumption gradually decreased, but was still noticeably higher than last year. In June, the indicators of 2022 came as close as possible to the volumes of 2021.

As for prices: the lowest price was observed in February, in comparison with the same period 2021 it is 5% less, but in March there was an increase of 9%, which is 6% higher than the prices of March 2021. Most of all, the price of vodka increased in June + 7%

A similar trend can be observed in the cognac and brandy segment. On average, prices for cognac and brandy increased in February-July 2022 by 5.1% in annual terms, and a slight increase in prices, which lagged behind inflation, contributed to an increase in sales of these drinks by 28.5% year-on-year. Due to a decrease in sales of imported products from France and Armenia due not only to sanctions, but also to the depreciation of the ruble in the spring, which led to an increase in the price of imported goods, Russian manufacturers in this period were able to increase their market share from 52% a year earlier to 55.57%. At the same time, the share of cognac and brandy from Georgia increased in the specified period from 7.5 to 8.5%. According to research, cognac remains the most popular strong premium alcoholic beverage in Russian chains. Sales in the segment are 45% and 47%.

In the rum and whiskey segments, Russian producers occupy rather modest shares: in the rum market, their share in February-July 2022 was only 4%, and in the whiskey market 27%. However, it can be noted that in the Roma market, Russian producers could not increase their share and even reduced it year-to-year, despite the withdrawal of Western competitors from the market, due to a 48% increase in price in annual terms. But in the whisky market, Russian manufacturers increased sales in DAL by 77% year-on-year, which was associated both with the departure of some Western companies from Russia and with an increase in prices for the remaining imported brands, primarily Scotch whiskey.

Experts of the Gradus agency expect that in the second half of the year the growth in demand for strong alcohol will continue. Lower prices by domestic producers can lead to double-digit growth in sales of strong alcohol, and this is supported by ambitious plans by Russian producers to increase sales of gin and whiskey, as well as premium vodka.

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