Centre Franco-Russe d’Intelligence Economique et Stratégique

05 juillet 2006

Wine, liquor imports suddenly dry up in Russia

Steven Lee Myers, New York Times - Sunday, July 2, 2006

07-02) 04:00 PDT Moscow -- For wine drinkers here, things were bad enough when the authorities banned imports from Georgia and Moldova in the spring, but one could get by with other imports that were -- no offense -- better. Things are about to get worse.

In the last few days, wines from France, Italy, the United States and everywhere else have started disappearing from shops, supermarkets and restaurants. So have the whiskys of Scotland and Ireland, the gins of England, the tequilas of Mexico. The reason is neither panic buying (though that would be in order) nor an unexpected appearance of Russian teetotalism, but rather a new federal excise law that has bottles flying off the shelves in a way no one intended.

Starting July 1, any bottle of imported alcohol is required to have a newly designed excise stamp. It sounds simple enough, but little ever is in Russia, recalling the aphorism popularized by former Prime Minister Viktor Chernomyrdin: "We wanted better, but it turned out as usual."

The deadline is being called Black Saturday, but by Tuesday the whole week was looking very black indeed.

Bureaucratic delays have slowed the distribution of the new stamps to importers, who are responsible for stamping the bottles themselves.

And the law requires thousands of dollars worth of computer equipment and software that has to be installed and certified by experts from an enterprise called Atlas, which is affiliated with the Federal Security Service, the KGB's successor.

The equipment must also be kept in special rooms with detailed requirements on space, temperature and the size of dust particles in the air.

The turmoil has left in the lurch hundreds of importers and distributors already reeling financially from the ban on Georgian and Moldovan wines (ostensibly for health concerns, though it is almost universally believed to have been a political move to punish two irksome governments spinning out of Moscow's orbit).

Worse, the law forbids selling imports with the old excise stamps and requires sellers to warehouse them in the meantime, forcing stores to empty their shelves this week in preparation -- or, at one supermarket chain, to sell their imported stocks at a steep discount that was not, alas, widely advertised.

The law, passed last year, signed by President Vladimir Putin on New Year's Eve and already delayed once, has disturbed the booming imports of wines and other alcohol that in Soviet times most people could only dream of buying. In 2005, imports totaled $1.2 billion, more than double the amount only two years before, according to official statistics.

Imports accounted for half of the wine sold in Russia last year. The rest, like Russian vodka and other liquors, is also subject to the new excise law, but despite a brief scare over the possibility of a vodka shortage in the spring, the new stamps were developed and distributed by a different agency -- the Tax Service, not Customs, as with imports -- in time to meet an April deadline.

"It will be a summer of low-quality Russian wine," said Vadim Drobiz, a spokesman for a union of wine and spirit makers and dealers, noting that most Russian wines are mass-produced from concentrate shipped from abroad.

The law was intended to bring order to a market that has been prone to smuggling and counterfeiting of the current stamp, even of some of the nicer brands.

The new stamp, printed with special materials and details for each bottle, should accomplish that goal, though not without significant disruptions in imports that Drobiz and others said could last through the year and even into 2007, while costing the market and the government millions in lost revenues.

Drobiz predicted that at least half of the country's alcohol distributors would be forced out of business. Many, he said, have already been crippled by debt because the ban on Georgian and Moldovan wines left them with unsalable merchandise. As a result, they cannot easily borrow more to refill the now-empty shelves with other imports.

Only 70 of 126 licensed importers have managed to acquire the new equipment and software necessary, the newspaper Vedomosti reported. Many foreign exporters have also been wary of sending new shipments until the mess can be sorted out, compounding the shortages.

Irina Sazonova, a spokeswoman for the Federal Customs Service, defended the law's implementation. "There are no problems," she said. "The stamps are issued to every importer who asks for them."

At the same time, she said that as of last week, fewer than half the requests for stamps for 162 million bottles had been granted, since the requests take as long as a month to process. Only 1.8 million bottles of foreign alcohol with the new stamps have been shipped so far, Drobiz said, only 5 percent of the market.

And the effect is already evident. Store after store visited this week had only a smattering of bottles with the new stamps, mostly spirits, not wine. Some made a futile effort to fill shelves that would normally have been full of wines and whiskeys with other products, often vodka, beer or boxed Russian wine.

Fyodor Omelchenko, the manager of an Italian restaurant called Vivace, said his wine menu was suffering. Where once he offered 70 wines, he said, he now has only a dozen. "The assortment will be reduced to a minimum," he said, but he was hopeful that the supply would be restored in weeks, not months.

Aleksandr Khaidukov, the manager of the wine section of the Davidoff store on Moscow's prominent shopping street, Tverskaya, summarized the frustration with a colorful expletive that translates roughly as "catastrophic."

His cellar shop, once abundantly stocked, was already virtually empty, its selection boxed and sent to a warehouse -- during a recent hot spell, he noted, in which temperatures have exceeded 90 degrees -- where its ultimate fate remains in limbo. (A proposal to give distributors until December to affix the new stamps on the bottles with the old ones is in the works, but even so, the old bottles must be removed by Saturday.)

"You cannot sell," he said, "but you still have to pay rent."

Andrei Yegorov, a spokesman for Wine World, one of the largest importers, said the government had disregarded the warnings of importers to delay the deadline or phase it in, perhaps to benefit domestic producers but more likely out of incompetence.

"The roads are bad in Russia," he said, speaking euphemistically. "That is why nothing is sorted out in time."

Posté par CFRIES à 10:43 - Agroalimentaire - Permalien [#]