Agricultural Investments

May 30, 09:54 Source: APK-Inform Views: 76

Medvedev Plans to Return Vineyards to Soviet Glory Days

After decades of neglect and the absence of state support, Russia’s wine grape production has fallen to 325,000 tons per year – a 60% decline from production levels of the 1980’s.  Prime Minister Dmitry Medvedev announced that the Russian government plans to increase its wine grape acreage from the current 90,000 hectares (which includes the 30,000 hectares of vineyards gained through the recent annexation of Crimea) to 140,000 hectares by 2020 and will possible liberalize the country’s laws governing alcohol production and marketing.  Russia had 200,000 hectares of vineyards in the early 1980’s until an anti-alcohol campaign under Mikhail Gorbachev caused the destruction of multiple vineyards.  In the absence of domestic production, foreign wines and counterfeits flooded the market.  In 2013 40% of the wine consumed in Russia was imported and an additional 30% was made in Russia from imported raw materials.  In 2013 Russia moved to recognize wine as an ‘agricultural product’ and therefore qualifying for state subsidies beginning in 2014.  The subsidies that are granted are quite low however, and the high cost of monitoring and licensing has made wine production in the country prohibitive for all but the largest producers.




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