Russian Wine Imports Plummet by 33%, Tariff Policy Affects Market Dynamics

During the period from January to October 2024, Russian importers reduced their purchases of wine from abroad by 33%, dropping from 532,400 tons in the same period last year to 357,700 tons this year. This significant decline is mainly attributed to Russias measure of imposing tariffs on wine from so-called “hostile countries”.

Maksim Chmora, head of the Tariff Department of the Federal Customs Service of Russia, said, “The decline in imports is due to the tariffs imposed on Russian wine from so - called ‘hostile countries’.” Currently, Russia imposes a 25% tariff on wine imported from Italy, France, and other “unfriendly” countries. However, with the intensification of trade tensions, the Russian government plans to further increase this tariff.

On November 7, 2024, Dmitrij Patrushev, the vice - premier in charge of agriculture, proposed a plan to increase the tariff on wine from “hostile countries” from 25% to 50%. This proposal aims to support the development of the Russian domestic wine industry by increasing tariff revenue and further limit the competitiveness of foreign wines in the Russian market.

Despite the decline in imports, Russias own wine exports increased by 20% in the first 10 months of 2024 compared with the same period last year, from 1,400 tons to 1,680 tons. The growth of the Russian domestic wine industry mainly benefits from the improvement of domestic production capacity and the increase in market demand. However, with the imposition of high tariffs on foreign wines, Russias dependence on foreign wines in the market will further decrease, promoting the development of the local industry.

Among the countries that export wine to Russia, China ranks first, with its import volume accounting for 48% of the total Russian wine imports. This proportion shows Chinas dominant position in the Russian wine market. Turkey follows closely, and Latvia and Israel also occupy a relatively high market share. The wines of these countries have long been popular in the Russian market due to their reasonable prices and good quality.

It is worth noting that Georgias share in the Russian wine import market has increased significantly. During the period from January to October 2024, the volume of wine exported by Georgia to Russia increased from 17% in the previous year to 25%. Georgia has cleverly circumvented tariff restrictions by exporting grape juice to Russia and “transforming” it into “Georgian” wine, enhancing its competitiveness in the Russian market. Although this practice is considered less transparent, it has effectively enhanced Georgias position in the Russian wine market.

Against this background, the Russian governments tariff policy not only affects the decline in imports but also promotes the further development of the domestic wine industry. Russian domestic wine producers benefit from the increase in tariffs, as it makes their products more competitive in price and reduces the market share of foreign wines. This policy shift helps to protect and promote the development of the Russian local industry and enhance its position in the global wine market.

However, Russias measure of imposing high tariffs on foreign wines has also raised some concerns in international trade. The World Trade Organization (WTO) has always emphasized that trade protectionist measures may lead to an intensification of global trade tensions and affect the stability of the international market. Nevertheless, the Russian government insists that these tariff measures are to protect the domestic industry and ensure the stability of the domestic market and will not have a significant negative impact on the global trade system.

At the same time, Russian consumers are also facing a reduction in choices and an increase in prices. Although the domestic wine industry is developing rapidly, high tariffs have led to an increase in the price of imported wines, forcing some consumers to turn to domestic brands. However, the diversity and quality of domestic wines have not yet fully met the needs of all consumers, which to some extent limits the further development of the market.

This policy shift by the Russian government has also prompted other countries to re - examine their trade relations with Russia. Especially for those wine - producing countries that rely on the Russian market, they must find new export markets or adjust their product strategies to cope with the changes in the Russian market. For traditional wine - exporting countries such as Italy and France, how to maintain their competitiveness in the Russian market in a high - tariff environment will become a key issue in future trade negotiations.

In addition, Russias tariff policy has also affected the supply - demand relationship in the global wine market. As Russia reduces its imports of foreign wines, global wine - producing countries may seek to export more products to other markets, leading to a readjustment of the supply - demand relationship. This adjustment may affect the fluctuation of global wine prices and, in turn, affect the purchasing decisions of global consumers.

In this situation, Russian wine importers and exporters need to closely monitor changes in global trade policies and flexibly adjust their market strategies. By strengthening cooperation with other trading partners and enhancing product quality and brand value, the Russian wine industry can maintain its advantage in the highly competitive global market. At the same time, domestic producers also need to continue to improve their technical level and production efficiency to meet the growing market demand.

Overall, Russias decision to impose high tariffs on foreign wines has not only significantly reduced imports but also promoted the development of the domestic wine industry. However, this policy has also brought trade tensions and a reduction in market choices, having a wide - ranging impact on the global trade environment. In the future, with the continuous changes in the international trade situation, Russia and its trading partners need to seek an effective way to balance protecting the domestic industry and maintaining an open market through dialogue and cooperation to achieve common prosperity and sustainable development.