By John Helmer, Moscow
@bears_with
President Donald Trump was told last week by NATO Secretary-General Mark Rutte that the Russian people are losing their confidence in President Vladimir Putin and in the war in the Ukraine because they are having to wait in line at their petrol stations; because their airport flights can be delayed for hours; and because their internet and mobile telephone connections go off suddenly.
What then will the American and NATO warfighters think of this — vodka and cognac production is falling in Russia this year: in the nine months to September, production is 17% down for cognac, 6% down for vodka. By contrast, the 9-month statistics from Rosalokoltabakkontrol (RATK), reported by Tass, reveal that the production of other alcoholic beverages has increased by 9.4%. This includes wine whose output is up 11.6% — sparkling wine up 9.6% — and the data aren’t counting production of beer, cider, poiré, and mead.
The reason, according to Moscow’s experts on the alcohol market, has nothing – repeat nothing — to do with the sanctions war which has blocked imports of US, French, Italian and other alcohol, or sharply raised their price when they come into the country as parallel imports through sanctions-busting hubs like Dubai. Also, the experts say that Russian drinkers aren’t going off their favourite vodka tipple because they are depressed at the slowness of the Russian Army’s battlefield advance, by the casualties, or by the impact of enemy operations like the Kursk invasion or drone attacks on the hinterland.
Russians haven’t stopped drinking because they think they are victims of what Rutte claimed in Washington last week was the “enormous amount of people dying and getting seriously wounded. The Russian economy is in difficult situation. We know we have these long lines into gasoline stations all over Russia at the moment. We know that the French president and others in Europe stepped up when it comes to the shadow fleet. And, of course, we have seen the pressure by the American president on some European countries to stop buying oil. So all of this is having an impact, with sustained pressure, we will be able to get Putin to the table to agree with a ceasefire and then other talks coming after that.”
The real reason is deliberate state policy to reduce consumption by raising the price of alcoholic drinks through lifting the excise tax. “People are beginning to choose cheaper or lower [proof] drinks,” Andrei Moskovsky told DwB; he is president of the Alcopro Guild, a producer association. “Production always works in conjunction with sales. No one needs to release something that won’t sell out. Most enterprises are now focused on the sale of products in the nationwide retail chains. Cognac sales have been falling since March because it has risen in price – the minimum retail price has increased by 17%. As a result, cognac costs at least 651 rubles per half litre; whisky and brandy, 472 rubles; vodka, 349 rubles.”
“By the end of this year, the rate of alcohol production will increase as a new excise tax rate has been announced. But this is only temporary. Starting from January 1, 2026, the excise tax on alcohol stronger than 18 degrees will increase by 11.4% to 824 rubles per litre. By the beginning of the new year, the factories will produce more alcohol than is required by current sales. This is done so that the product can be marketed with the old excise tax – at a price of 740 rubles per litre. Sales will increase through the New Year holiday due to the seasonal demand and also by people’s desire to buy cheaper drinks to stock up for the future. Then demand will fall and so will production.”
The outcome is that in September Russia recorded the lowest per capita alcohol consumption in 26 years, RATK reported. Comparing this year’s official data with earlier years, Vadim Drobiz, the director, just retired, of the Centre for Research on Federal and Regional Alcohol Markets (TsIFRRA), says that in the first year of the Special Military Operation and the escalation of European Union sanctions, there was over-production of all types of alcoholic beverages, especially strong drinks. “Each manufacturer hoped that the imports would ‘disappear,’ and it was necessary to have time to fill the market with their products. However, already by the fourth quarter of 2022, a decrease in production could be observed in some sectors – companies were lowering their production in line with market demand.” .
According to Drobiz, in the first year of the war the production of Russian rum, whisky and gin increased due to substitution of imports, but no significant increase in their consumption was recorded. At the time Drobiz expected that in 2023 alcohol production in Russia would stabilize and import volumes would recover. In 2022, he said, “alcohol consumption demonstrated trends which are usual for times of crisis — purchases of strong alcohol grew, sales of wine products, on the contrary, decreased.”
This year this trend has reversed.
The new evidence suggests that not only are Russians drinking less alcohol but there is a class difference in the rejection of vodka – bourgeois Russians are opting instead for wine, whisky, gin and rum; working-class Russians for wine and beer. The difference between them is money, and the impact of the Kremlin’s temperance tax. Drobiz says he has retired and doesn’t want to talk about the alcohol market any longer.
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