Dez 21

How the crisis is affecting wine in Russia

Tag: Allgemeines,Ländersigi.hiss @ 15:14

from with an English summary by Eleonora Scholes – Falling sales across all price levels is a major problem that Russian wine producers and importers are facing due to the global economic slowdown. Restaurant wine lists have been revised, and the restaurant buyers are now placing orders only for the best selling bottles. Corporate spending on Christmas gifts and parties has been severely cut or even cancelled this year. Expensive labels are not selling as well as they used to. Regional sales are 40-50% down. The trade is keeping the level of stocks to the minimum. These are but a few burning issues caused by the crisis for the Russian wine market.

Banking crisis and higher interest rates are blamed for the fact that hundreds of thousands of bottles have been piled up in the customs, as wine importers are unable to pay their customs duties and excises. Many large players are shipping 1.5-3 times less volume than usual. According to Kommersant business daily, Svarog imports are down from 329,000 to 177,000 litres, while Vinicom cut down the shipments from 204,000 to 76,000 litres.

According to the Federal Customs Service, total wine imports in October were 20.4m litres,which is one million down from the previous month. Logistic companies also confirm that less volume was moved recently. While imports steadily grew by around 30% during the first eight months, as compared to the same period last year, November showed only a 10% increase. This is very low, as imports usually peak at this time of the year.

There is also an impression that some companies are trying to turn the so called ‘payments crisis‘ to their benefit. Many regional distributors, especially in the cities with population over one million people, make false excuses to delay payments for the wine that had already been delivered to their warehouses. Whether this assumption is true will be seen by mid-February when the alcohol market will be preparing for the Ladies‘ Day on 8 March, a major Russian holiday. Regional companies will be forced to pay for the previous shipments, otherwise their new orders will not be honoured, and they will be facing huge sales losses.

Some importers and distributors see the crisis as an opportunity for new development. The biggest fine wine importer Simple increased imports from 1.6 to 1.8m litres in October and opened a new outlet of its Grand Cru chain of wine shops. The crisis is also set to ‘clear‘ the market of weak operators, and free up the playing field for bigger companies. Besides, new marketing ideas are developed and applied, such as club programmes, short wine courses, small wine parties, etc.

It is unlikely that end consumers will see a shortage of wine and spirits in the shops in the near future, as imports are falling proportionately to the slowing consumer demand. No heavy price cuts are expected either, as long as bankrupt companies or banks who hold wine stocks as collateral do not float these wines on the market at minimal prices. No one, however, is prepared to make even short term forecasts.

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