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Saturday, February 17, 2018

Winemakers are cashing in on the fake “Crimean wine

Most of the “Crimean” wine is not from the Crimean grapes, winemakers say. Dozens of companies are parasites on the Patriotic enthusiasm of consumers and their desire to try a domestic wine is mainly produced in the Crimea. However, paradoxically, it is the major domestic manufacturers are the main culprits spreading false Crimean wines.

Import substitution, covering domestic agriculture and food industry, was not spared and the wine industry. In a recent publication by the Wall Street Journal argues that the production of wine in Russia for the year increased by 25%, a similar figure some time ago cited and the international organization of wine (OIV). And according to Rosstata, last year the country produced 40 million decaliters (dal) of table wine, which is 14.3% more than the year before. The comparable rates declined import: after 11 months of last year it contracted by 14.7% (from foreign countries even more – 22.7%). While production in other key segments of the alcohol fell substantially: vodka last year in Russia released the 4.9 was given less than a year earlier, and beer – 42 million dal.

The victory of the Bolsheviks

“Patriotism plays an important role. The proportion of consumers deliberately began to ignore imported products and first discovered Russian wine”

Thus, of the three main parts of the Russian alcohol market, the wine was the only one which managed to reverse a prolonged decline in production. For comparison, the official vodka production in Russia from 2010 to 2015 fell by about a third (from 95,1 to 63.9 million decaliters, according to Rosstat), production of beer over the same period fell by a quarter (up to 984 782 million dal), and only table wines managed to “bounce” from the bottom. Slightly worse is the situation in the sparkling segment there last year, it produced 200 thousand gave products less (16.1 million has given), but in comparison with the rate of decline of production in other segments is a very slight decline.

What is the reason of such changes?

“Patriotism plays an important role in the promotion of Russian wine, says renowned wine blogger Valery Ivannikov. On the wave of active discussion in the media of the topic of import substitution, the proportion of consumers deliberately began to ignore imported products and first discovered Russian wines. In social media comments like, “Whoa, it turns out that our winemakers can make wine” were not uncommon”.

However, it is impossible to say that with the devaluation of the ruble and the strengthening promotion of consumer patriotism, domestic wine has an absolute advantage over imports. Already this year, thanks to some strengthening of national currency there are signs of revival of imports in January – July, according to Rosstat, the import of wines in Russia increased by 2.7% compared to the same period last year. Now on supermarket shelves are well-represented foreign products in the most marketable segment to 500 rubles per bottle. And still hurt the competitiveness created by the devaluation, was for domestic wines is quite long. According to Ivannikova, when compared with imports in the mass segment of the Russian wine import beat in terms of price and quality:

“For 450-500 roubles in the Federal network and corporate stores manufacturers, you can buy a bottle of barrel-aged Russian wine, for example, the production of “Phanagoria” or “Kuban-Vino”. Imported wines in this price segment – is a young table wine from the lower lines. Previously, Russian consumers did not understand, the main criterion for the choice of wine was known in the wine-growing districts in the country-the manufacturer. Any imported wine, especially French, Italian or Chilean, automatically became the best. Step by step by raising awareness of Russian producers, wine experts, enthusiasts and bloggers “advanced” part of the buyers began to understand the fault and the pricing. The scales, especially in the mass category, confidently moved in the direction of the Russian wines”.

The structure of alcohol consumption in some countries of the world (click to enlarge)Another thing is that the situation in the Russian wine the last two years is well illustrated by the well-known thesis that in a crisis strong players become stronger and the weak have to take positions or even to leave the market. Major domestic wine producers (in the slang of the wine they are referred to as “Bolsheviks”) due to significant volumes of production are quite capable to compete with imports on an equal footing.

“Medium-enterprises with an area of 30-100 hectares of vineyards, which are located between the Bolsheviks and a small progranime production, very difficult situation with the economy. Such producers, as a rule, high cost, so they received far fewer benefits from the devaluation,” says chief winemaker of the company, “Sauk-Dere” from the Krasnodar region Roman Neborsky.

The reverse side of patriotism

The current situation in the Russian wine could be called “breakthrough”, if not for one thing: buying wine from domestic production, still you cannot be sure that these products are made from Russian grapes and in the place which is stated on the label. Especially revealing is the situation with the Crimean wines – more precisely, the wines, the title of which has the word “Crimea”.

Patriotic enthusiasm on the occasion of the accession of the Peninsula instantly gave rise to the demand for certain alcoholic products. “Those who went to the Crimea in the Ukraine, remember how cheap cost at the time the Crimean wine – about 150-250 rubles, – says Valery Ivannikov. And suddenly these wines appear on the shelves at a very different price – 800 rubles. Of course, people are not willing to buy them at this price. Previously, it was cheap, tasty and high quality, now the quality has fallen, and the price is three times increased. So blogs regularly meet such opinions: Yes, the Crimean wine appeared, but they are very expensive, so we drink Kuban – they better ratio quality/price”.

In addition, the fashion in the Crimea led to the appearance on the shelf, frankly misleading buyers astray. For example, the author of these lines had a chance to hold the alcohol product with the word “Crimea” on the label, released in the Ukrainian Dnepropetrovsk without any indication on the origin of the wine. From the same series – abundance of products with the word “Crimea”, released in the vicinity of the town of Krymsk in Krasnodar region. Not formally reproach, but dishonest marketing is obvious.

“At the moment the origin of the wine Russian wine is not controlled, buy them anywhere,” says Sebastopol winemaker Pavel Shvets, specialized in wines in the premium segment. – As a result, instead of a guaranteed denomination of origin applies a completely different principle: spilt in Crimea – turned Crimean wine, spilled in the Kuban region – Kuban, and the fact that the wine is not used by the Crimean and Kuban not, no one cares. The brand “wine of the Crimea” popular, as a result, this parasite a huge number of companies – most of the “Crimean” wine is not from the Crimean grapes and the Kuban and even Russian. Now it is by and large turn a blind eye.

Theoretically, this situation had to change amendments to the Federal law “On state regulation of production and turnover of ethyl alcohol, alcoholic and alcohol-containing products and about restriction of consumption (drinking) alcoholic products”, adopted shortly after the annexation of Crimea. They were introduced the concept of wines with a protected geographical indication (WSGU) and protected designation of origin (SNMP) – by analogy with the practice of many wine-producing countries of the world. Appropriate markings on labels allows you to accurately determine the class of wine – from high quality drinks made from grapes that were grown in a particular place, to mass production, without specifying the origin of the wine. In the latter case, for example, these options: the wine is bottled in France, but on the back label says that the wine for him “made in EU”. For those who are at least minimally versed in wine, it is an occasion to think, whether to overpay a little and take a bottle with a clear origin of its contents.

A number of prominent Russian steel producers to practice such an approach long before the adoption of the amendments to FL-171, voluntarily declaring the volume of the produced grapes or creating a premium range of wines made only from native grapes. However widespread this practice has not yet become.

According to Pavel Shvets, the main reason that the new classification system in Russia can not make, is to counter those “Bolsheviks”: “FZ-171 prescribed a new category of wine production, but how these titles to defend, think forgotten – that continues the use of geographic objects on the label with unclear content. Most large manufacturers are accustomed to make on the lack of control of wine by origin and have an effect in Misseltoe, the Net, the Rosselkhoznadzor. Many public enterprises in the wine industry also often pursue the interests of large enterprises or within them, there is no consensus. To achieve the distinct position in the wine community in this matter is impossible because most “Lewatit” with large manufacturers there is a serious possibility of lobbying. This situation will persist as long as the country’s leadership decides to restore order.”

Import substitution and the day after tomorrow

Even if the control system of wines by geographic origin is running, it will not speed up the process of import substitution, which depend not only on natural factors (from planting of the grapes to the wine bottle on the shelf, it takes approximately eight years), but also from a number of quite “human” conditions. So, one of the main incentives to attract to the wine industry of new capital is the level of state support. For the Ministry of agriculture of the Russian Federation the development of viticulture and winemaking is one of the most important priorities. At the end of last year, the head of the Ministry Alexander Tkachev said that the volume of means of state support of the industry increased three times (from 315 million to 1 billion rubles, and in 2016 it is planned to increase it to 2.4 billion rubles. By 2020, the area of Russian vineyards should be increased from the current 87 thousand hectares to 140 hectares.

According to Tkachev, through the strengthening of support measures to industry to replace imported wine can be for three to five years. So, as of last year, imports of wine amounted to 17 million dal, or one-third of the total consumption in the country, although seven years ago the import share reached 70%. To reduce its managed by increasing the area of vineyards – 60% over five years (according to the RF Ministry of agriculture).

However, this process is not smooth, and the weak link here is once again the Crimea. “The new Governor of Sevastopol Dmitry Ovsyannikov fully supported the concept of development of the author’s winemaking in the region, as it involves a large number of jobs and significant tax deductions,” says Pavel Shvets. But in Sevastopol still does not work the Russian system of land cadastre: we can neither buy land nor take it on lease. I personally six months ago I gave the documents for a survey, but still can not buy the land – I would have to put it to the grapes, and now it will have to wait at least a year.”

Therefore, according to the Sebastopol winemaker, the wine gains in import substitution will be more noticeable if there is more efficient interaction of the Federal authorities who are able to establish in law the conditions for the attractiveness of the industry and the regions, which depend on the provision of land for new projects.


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