In this week’s installment of citizen journalism, Austrade chief economist, Tim Harcourt, discusses the growing popularity of Australian red wine in Russia and explains how local winemakers can get a foot in the door.
“Have you heard? The reds are coming back to Russia. No, it’s not a counter-revolution against Vladimir Putin, but a drinking revolution in Russian tastes, with reds (especially Australian red wines) now being served in flash nightspots, bars and restaurants all over Moscow and Saint Petersburg.
Wine drinking has been part of a new trend in Russia, with large doses of conspicuous consumption on display. The incredible growth of Moscow as a boomtown like New York in the roaring 20s is really opening up opportunities for consumer products, including wine, art and cosmetics.
But while Australian wine has been a favourite of the new rich and the oligarchs, there are signs that changing tastes throughout Russia are also attracting more Australian winemakers. For instance, Worldwide Holding, a major Moscow importer, is attempting to make Australian wine more accessible to the majority of Russians.
According to Igor Titov, head of export development for WorldWide holding: The older people drink vodka and beer, but the younger crowd are switching to wine. But Australian wine is over-priced. A bottle of Lindemans Chardonnay will cost you US$60 at a local hotel bar or restaurant, when it should be much more accessible to the average Russian,” he said.
Australia forms part of the ‘New World’ wine countries that export to Russia. Traditionally imported wines have come from France, Italy, Spain and neighbours Moldova and Bulgaria. However, the New World wines of Australia, Chile, Argentina and South Africa are now making inroads. Accordingly, imports are growing as a proportion of Russia wine consumed.
In 2003, the volume of the Russian wine market totalled 86 million hectolitres, with 13.4 per cent imported. In 2005, this is expected to reach 99.5 hectolitres, with 30 per cent comprising imports. There are around 10 Australian wine companies active in Russia, but Titov says this is just the “tip of a large Siberian iceberg.”
“Australian wines, like all new world wines, need to put prices in kilter with quality, but this will come by growing market share. And Australian wines have something special that suits Russian consumers,” he said.
In order to help Australian wine makers crack the Russian market, Austrade is offering a “Capture the Russia” wine marketing entry programme. According to Greg Klumov, Australia’s senior trade commissioner in Moscow: “With 145 million people and 86 million potential wine consumers, the market is here – with just a little help at the beginning many Australian wine exporters will do well in Russia”.
So for Australian wine makers, Russia could well be a new frontier as more traditional markets get saturated. Let’s hope that the only Reds under the Bed in Russia in future are a case of Australian Cab Savs, Shirazes or Merlots."
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