The Russian wine market is in the state of turmoil and anticipation again, writes Vladimir Gorodkov from Afro-Hermitage in www.wine.co.za. New liquor legislation, introduced earlier this year, stipulates that the new excise stamps with unique bar-codes must be used for all bottled alcohol products sold within the country. The products with the old stamps were only allowed for import into Russia till April 1 and have to be sold in retail before July 1.

There was no new wine coming into the country since April 1, because even though the new excise stamps became available at the end of April (!), the computer systems that are supposed to read the unique bar-codes are still being tested. They are expected to become fully operational by the end of this month.

As if importers were not nervous enough sitting on the huge volumes of wines with old excise stamps, on March 27 the Russian Sanitary Authorities have placed a ban on all alcohol products from Moldova and Georgia. These two former Soviet Republics were jointly responsible for over a third of the total wine market in Russia.

The official explanation for the ban was the low quality of wines from these countries, big proportion of counterfeit production and some pesticides, heavy metals and other substances unfit for human consumption found in these wines. It is reported that over US$200 million worth of wine will now have to be re-exported or destroyed.

Some big supermarket chains stopped accepting wine with the old stamps from the beginning of March. With the new move of the Russian authorities some big retailers, such as Metro Cash 'N' Carry, have decided to remove wines with retail prices below US$3.50 off the shelves altogether.

Wine prices have already increased by almost 10% over the past month and are expected to grow by another 20% by July this year. But the Russian wine market is used to shake-ups like this. Wine imports have been growing at 30-35% a year on average since 2000. Imports from France have increased by almost 45% last year, imports from Argentina - by 80%! South Africa and the US have been almost doubling their volumes each year since 2004 and exceeded 1.1 million litres each last year.

The strongest will survive again in the current situation and in the next few months some old and new Russian importers will be desperately looking for new products to fill up the emptying supermarket shelves and satisfy their thirsty consumers.

For the complete story, go to www.wine.co.za

( http://www.wine.co.za/news/news.aspx?NEWSID=8559&Source=News )