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Metro Group looks to drive wine growth in Russia

Published:  02 December, 2013

Metro Group, the world's fifth largest retail operation, is looking to widen its reach across Russia, the company's second largest wine market after France, and urged delegates at last month's Wine Vision to seriously invest in the country.

Russell Burgess, global category director for wines and spirits, told Wine Vision that it is opening 15 stores a year in Russia and pushing out eastwards from Moscow and St Petersburg - which account for 85% of its business - to other large cities.

It currently runs 68 shops in Russia, outpacing Germany - Metro Group's third largest market for wine - where it operates 100 stores. Russia's value to the group is worth three times times the rest of Eastern Europe put together, Burgess said.

The Metro Group is also present in the Czech Republic, Poland, Romania, Bulgaria, Ukraine, Serbia, Croatia, Slovakia, Kazakhstan and Moldova.

Burgess said Metro Group is investing "an awful lot of money" in Russia. It moved into Eastern Europe 10-12 years ago and had enjoyed success until the financial crisis. Since then, all countries have suffered except Russia, Burgess said. 

The market is also fraught with challenges,conceded Burgess. These include logistics, importing, temperature controlled distribution, lack of central warehousing and corruption; not to mention visas and applying banderoles, an excise tax stamp. But despite these problems the overall market is profitable - not just wine, he added, and urged delegates without a presence in Russia to enter.

Burgess said Metro currently deals with up to six importers in Russia but has applied for its own import licence, which would "revolutionise our business in Russia".

A ban on all alcohol advertising outside of the store since the start of 2013 has impacted Metro Group's online business and the site is now used solely for information, Burgess said.