Between January and April 2025, the production of brandy distillate in Russia dropped dramatically by 58% year-on-year, totaling just 1.28 million decaliters, according to industry sources cited by Kommersant.
Meanwhile, brandy bottling declined by 22% to 1.96 million decaliters, with regulatory figures from Rosalkogoltobakkontrol placing the total slightly higher at 2 million dal, as reported by RBC Vino. The downturn reflects a troubling convergence of economic, regulatory, and market dynamics that are reshaping the Russian spirits industry.
Price Hikes and Policy Pressure Squeeze Producers
A primary factor behind the sharp decline is the rise in the minimum retail price for brandy, which increased by 17% since the beginning of the year to 651 rubles per 0.5 liters. Coupled with an increase in excise taxes on ethyl alcohol and additional restrictions on alcohol sales in certain regions, these measures have severely dampened consumer demand—particularly in the mid- to low-price segment, which makes up the bulk of the market.
Faced with falling sales and excess stock, many producers have suspended bottling activities, waiting for clearer signs of market recovery.
Import Dependency and Logistic Headwinds
Russia's brandy industry is also exposed to international vulnerabilities: approximately 80% of the distillate used in production is imported, primarily from Armenia. This heavy reliance makes local production sensitive to cross-border supply fluctuations. Even though imports from EAEU countries continue, rising logistical costs are squeezing margins and complicating planning for producers.
Leading domestic producers like Usovskie Wine and Brandy Cellars and Alvis have been hit particularly hard, with output down 55% and 27%, respectively.
Shifting Preferences Among Young Consumers
The decline in brandy sales is not solely the result of economic and regulatory pressure—it also signals a broader shift in consumer preferences, especially among younger demographics. According to Petr Romanishin, General Director of the Fanagoria Winery, there’s a growing interest in lower-alcohol beverages such as beer drinks and cider, which are perceived as more accessible and lifestyle-friendly.
This trend coincides with rising sales of rum and whiskey, which saw growth of 17.5% and 7.8% respectively in Q1 2025, as reported by Nielsen. These categories may be benefiting from a modern image and more versatile consumption occasions.
Retail Sales Mirror Industry Slowdown
The downturn is also evident in retail data: RATK reports that retail sales of brandy fell by 11.8%, amounting to 4 million decaliters between January and April. More broadly, total strong alcohol sales (excluding beer, cider, and similar beverages) fell by 10% year-on-year to 63.5 million decaliters.
Outlook: Industry at a Crossroads
With rising costs, waning demand, and a generational pivot in consumer behavior, Russia's brandy industry finds itself at a crossroads. The pressure is mounting for producers to adapt, whether through diversification into new product categories, innovative marketing, or cost-efficient production models. Without strategic shifts, the current decline could signal a long-term contraction in what was once one of the most stable sectors of Russia’s alcohol industry.
Source: RBC Vino