The alcoholic beverage market in Russia experienced notable changes in 2024. According to the Federal Service for Alcohol Market Control (Rosalkogoltobakkontrol), total sales of alcoholic beverages (excluding beer, beer drinks, cider, perry, and mead) decreased by 1.1%.
The sales volume fell from 229.4 million decaliters in 2023 to 226.9 million decaliters in 2024. This decline coincides with a 1.8% decrease in production, a shift some experts attribute to market normalization following the rapid growth of 2022.
Wine Market Dynamics
The wine segment bucked the overall declining trend, with sales increasing by 3.2% in 2024, reaching 81.9 million decaliters compared to 79.3 million decaliters in 2023. This category includes grape wine, sparkling wine, and liqueur wine. Notably, sparkling wine showed the strongest growth, rising by 8.6% to 23.5 million decaliters. Liqueur wine sales followed, with a 7.6% increase to 1.2 million decaliters. Grape wine sales also rose slightly by 1.2%, amounting to 57.1 million decaliters.
Alexander Stavtsev, Vice President of the Association of Retail Market Experts, highlighted the resilience of the wine market despite rising prices in 2024. "Last year slightly outperformed 2023, which was already a successful year in terms of sales," Stavtsev remarked. He attributed the positive dynamics to the first half of the year, prior to significant market disruptions.
Impact of Excise Rates and Customs Duties
Two major policy changes influenced the alcoholic beverage market in 2024:
- Increase in Excise Rates (May 2024): This hike affected production costs and retail prices, influencing consumer behavior.
- Increase in Customs Duties (August 2024): This change further impacted imported alcoholic beverages, encouraging domestic production and sales of localized alternatives.
Despite these challenges, Stavtsev noted that the market for wine sales remains at historical highs.
Vodka and Other Spirits
Vodka sales showed marginal growth, increasing by 0.6% to 76 million decaliters, while the liquor category experienced a notable 17.7% increase, reaching 16.6 million decaliters. Brandy-Cognac sales rose by 2.1%, totaling 14.1 million decaliters, and the "other alcoholic beverages" category (including gin, rum, whiskey, tequila, etc.) grew significantly by 14.4% to 14.4 million decaliters.
Andrey Moskovsky, Secretary of the Alkopro Guild, attributed the growth in the "other alcoholic beverages" category to the localization of production. He explained that domestically produced spirits, using Russian or regionally sourced raw materials, have reduced costs for consumers, boosting sales. Moskovsky predicted sustained growth in this category, especially with the introduction of Russian-aged whiskeys.
Decline in Low-Alcohol and Fruit Alcoholic Beverages
Low-alcohol beverages and fruit alcoholic products experienced sharp declines in 2024:
- Low-alcohol beverages: -34.7% (12 million decaliters)
- Fruit alcoholic products: -26% (9.3 million decaliters)
- Grape-containing beverages without ethyl alcohol: -37.9% (552.1 thousand decaliters)
- Grape-containing beverages with ethyl alcohol: -7.4% (1.4 million decaliters)
According to Vadim Drobiz, Director of the Center for Research of Federal and Regional Alcohol Markets (CIFRRA), these declines are linked to increased excise taxes. Many manufacturers shifted their products to the beer and beer drinks categories, where excise rates are lower, resulting in a statistical reclassification of these beverages.
Policy and Public Health Implications
Health Minister Mikhail Murashko emphasized the need to continue efforts to reduce alcohol consumption, despite recent stagnation in consumption decline. Deputy Prime Minister Tatyana Golikova noted that since the implementation of the national "Healthcare" project in 2018, alcohol consumption has decreased from 14 liters to 8 liters per person annually.
Source: RBC Vino