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Wine not expected to be affected by Russian sanctions

Published:  07 August, 2014

The rising political tensions between the EU and Russia and the subsequent sanctions against the country may not have an impact on EU wine imports.

Yesterday Russian President Vladimir Putin signed off on a one-year ban on certain agricultural produce, foods, and raw materials from countries that have sanctioned Russia, including several EU member countries. The government has also been tasked with creating a list of additional imported products that will also be banned.

All agricultural products produced in the US are expected to be prohibited for one year. EU-produced vegetables, fruits and dairy products are also expected to be banned. Russia imported more than £8.9 billion worth of goods from the EU in 2013.

The full list of banned products imported from the US and the EU is expected to be issued today.

Putin signed off on the sanctions in response to the EU and US imposing several sanctions in the past weeks against Russia over the Ukraine Crisis.

However, a Russian media business publication cited an unnamed source saying that list of banned products is expected to include "different types of vegetables, fruit and meat products, but it would not include wine or baby food."

With a growing middle class, Russia has the potential to be a large wine consuming market.  

In May, Wine Intelligence released a report called Russia Landscapes 2014, which focused on the  growing significance of the Russian wine market.

The report stated: "In the wine world it's a country we often tend to overlook. Yet it's the ninth largest market for wine on the planet, and in its two largest cities alone there are almost 6 million people who consume wine on at least a semi-regular basis.The number of Russians who drink foreign wine two to five times a week has seen a big jump between 2012 and 2014. Wine drinkers are cutting back on the traditional Russian favourites of vodka and beer. It sounds like fertile ground for wine exports, and it is - with certain caveats."

Specifically the report saw Russia as a market poised for growth. The analysis shows:  "Russia as a "high growth emerging market". It's a big market, a complicated market, and one that occasionally looks less economically and politically stable than might be desired. But Russians have got the taste for imported wine."

However, the current political instability within the country and even the potential that wine could be banned, may be too much for wine exporters and producers to gamble on at the moment.