Russia’s bureaucracy hampering wine sales

Tax, import controls and licensing changes hit US wine shipments to Russia in 2012.

Russian bureaucracy prevented US wines from achieving their full potential in a key emerging market last year, but producers remain confident.

US wine exports may have achieved a record value in 2012, at US$1.43bn, but global exports dropped by almost 5% in volume terms.

Alongside falls in Hong Kong, where the benefit of slashed duty rates is waning, Russia played a significant part in the decline. Exports to the country sank by 57% versus 2011, to 1.67m litres, despite it commonly being touted as an important emerging market for wine.

‘In Russia, importers are required to have two licences to renew – one to import, another to distribute – and this has caused some to go out of business,’ Gladys Horiuchi, of the California-based Wine Institute, told Decanter.com.

‘Also, complex import procedures and high taxes have been issues,’ she said.

‘However, the market is exciting in that there is a new generation of wine drinkers with more disposable income, so the potential is certainly there, even though it is a challenging market.’

More generally, tightening supplies of US wine, particularly in California, have constrained exports in the past 12 months.

‘Experts report that marketers feel they could have sold more if they had the wine,’ Horiuchi said.

Written by Chris Mercer