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Three chain retailers entered the top 5 largest importers in 2023 for the first time. For the second year in a row, the X5 Group managing the Pyaterochka and Perekrestok chains became the leader (import – 40.1 million liters), Magnit took the 2nd place (31 million liters), followed by the Novabev Group Synergy-Import structure (28.5 million liters), the Krasnoe and Beloe (Red &White) alcohol chain store  (25.8 million liters) and Bacardi Rus (25.7 million liters), a source familiar with the data of the Federal Customs Service (FCS) told Vedomosti.

In total, about 448 million liters of wine (still, sparkling and fortified) were imported to Russia in 2023, two sources of Vedomosti reported. In 2022, Russia imported 405.1 million liters of wine (10% more than in 2021), RBC wrote. The representative of the Federal Customs Service recalled that the service had temporarily suspended the publication of import information since 2022.

A representative of X5 Group confirmed these data, adding that the growth of the company's direct deliveries from abroad in this category amounted to about 9% year-on-year. The representative of Magnit noted that the growth in direct wine imports in 2023 is due to the low base of 2022. Novabev Group sells almost half of its own and imported products (46.1%) through its network of Vinlab alcohol markets, Vedomosti wrote earlier after the publication of the company's reports. Novabev Group, Mercury Retail (owns the Bristol and Red and White alcohol market chains) and Bacardi Rus did not respond to the request.

About 80% of all imported wine in kind is imported to Russia by retail chains or related structures, says Alexander Stavtsev, head of the WineRetail information center. Although back in 2018, the share of direct imports by retailers was only about 20%, the expert notes. Chains are trying to transfer an increasing share of supplies to direct import in order to increase import control and make an advance payment to suppliers mandatory from 2022: small intermediaries sometimes simply do not have enough funds for it, Stavtsev explains.

Indeed, since 2018, federal chains have begun to powerfully increase the share of their own imports of cheap wines in order to exclude intermediaries and keep prices low, earning about 30% margin, says Vadim Drobiz, director of the Center for Research on Federal and Regional Alcohol Markets.

According to him, despite the fact that since August 1, 2023, duties on wines from unfriendly countries have been increased from 12.5 to 20%, this has still had almost no effect on retail price tags.

The active growth of imports in 2022 and 2023 is the so–called surplus index, i.e. market players, due to fluctuations in the exchange rate and in anticipation of higher duties, increased wine stocks, fearing the cessation of imports, Stavtsev says.

According to Drobiz and Stavtsev, imports fell by 35% in December 2023. The increase in duties and sanctions restrictions had the expected impact – in the second half of 2023, there was a drop relative to the same period in 2022, says Evgeny Shcherbakov, head of the portfolio of wine brands at Luding Group. Most likely, this trend will continue in the first quarter of 2024, Stavtsev believes. "We do not see any prerequisites for an increase in import volumes in 2024," adds the representative of Magnit.

There is a reorientation in the supply of wines from abroad to friendly countries - South Africa, Georgia, etc., Drobiz notes. According to the representative of X5 Group, the retailer will continue to expand the geography of imports, including paying more attention to the CIS countries, Asia and Latin America, and the company is also testing the supply of new products from Brazil, Turkey, China, and India. The company also continues to increase direct imports from Georgia, South Africa, Chile, Argentina, Azerbaijan, Armenia and other countries.

In addition, the market expects how sales will be affected by the deferred (due to the stocks made) impact on prices of an increase in duties and a threefold increase in the excise tax on all wines from May 1, 2024 to 108 rubles per liter (instead of 35 rubles per liter earlier). Drobiz predicts that cheap wines will start to rise in price by the summer, and by the end of the year, the distribution of domestic and imported brands 50/50 will remain in retail sales. "It is not yet fully clear how the consumer will react, but I believe that buyers of foreign wines will not massively switch to domestic or other alcoholic beverages," Drobiz believes.

The trend of increasing the share of retailers by increasing direct imports will continue and other food retailers, such as Lenta, which grew by more than 2,000 stores last year due to the purchase of the Monetka chain, should be expected to appear among the leaders of the rating, Marat Ibragimov, senior analyst at Gazprombank, believes. Also in February 2024, Lenta announced the creation of the Vingarazh alcohol market chain.

The situation forces traditional importers to change their business model, especially for those who used to build a business on supplies for federal chains and are now losing these volumes, Stavtsev notes. According to him, they switched to federal second-tier chains, to regional retail, and also began to diversify sales channels: they develop corporate sales, their own retail, and sales through catering.

Retail chains are closing the niche of the most inexpensive segment with their own imports. "For our part, in addition to our own brands, we produce our own brands for networks and actively develop this area," says Shcherbakov. Ladoga is not a supplier of mass-market wine to federal chains: in this category, the company works with local and regional retail, HoReCa (catering and hotel business), says Veniamin Grabar, president of the company.

At the same time, the fact that the leading places are occupied by importers from retail due to the import of inexpensive wines corresponds to global practice, says Alexander Lipilin, executive director of Fort wine trading company. According to him, this is why Fort and a number of other alcohol market operators operate in a higher price segment. So, in 2023, the company imported about 3 million liters (the average price is $6.7 per liter). While retail mainly imports wine at a cost of 0.7–1 euros, which allows players to divide the market, Drobiz summarizes.  

Source: https://www.vedomosti.ru/business/articles/2024/03/18/1025768-v-rossiyu-vvezli-448-mln-l-vina