Moldova now stymied by Russian tax regime

Moldova now stymied by Russian tax regime News Wine News
  • Tuesday 27 February 2007

Moldovan hopes of restarting wine exports to Russia have been dealt another blow.

In spring 2006 Russia banned imports of alcohol from Moldova and Georgia, claiming the products were of inferior quality and failed to meet health and safety standards. But Moldovan officials said the ban – which reduced wine exports by 40% – was politically motivated and possibly illegal.

The ban crippled the industry, which suffered losses estimated at US$180m during 2006. At least 27 wineries are believed to have been bankrupted.

The ban was lifted in November, with the proviso that all imports are tested for quality. But it now appears that a new and punishing tax regime on imported wines will make Moldovan wines prohibitively expensive.

Imported wine containing additives is taxable at RUB15.8 (€0.45) per 75cl bottle, while ‘natural’ wine (produced purely by grape fermentation with no additives of alcohol, grape concentrate or must for sweetening) pays a much lower rate of RUB2.2 (€0.06).

Moldova used to export around 70% of its wine to Russia as low-priced, semi-sweet and semi-dry. The Russian Federal Customs Service removed all semi-sweet and semi-dry wine from the ‘natural’ wine category in January – putting Moldovan imports into the higher tax bracket.

‘The new higher tax will basically just about finish off Moldova even when the market opens,’ a winery source in Moldova said.

At the same time it is hoped that Russian vice-premier Alexander Zhukov’s new bill on wine sales, due in March, will bring import duties on natural and enriched wines more in line with EU tax regimes.

Meanwhile the industry has been waiting for details of quality control standards and customs procedures.

A Russian customs delegation visited Moldova earlier this month to agree on a single border checkpoint for all exports.

Russian inspectors are due to draw up a limited list of wineries approved to start wine exports – sources suggest that only around 10 will be on this list.

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