For many of us, the mere mention of alcohol and Russia evokes stereotypical images of heavy drinking Muscovites, consuming large amounts of vodka, in smoky bars at sub-zero temperatures; and although Russians have always had a close affinity for alcohol, this is far from the truth.
Wine consumption has increased hugely as availability and choice in the Russian market has grown. Vodka remains popular but you are far more likely to see the party set drinking wine in the high class bars and restaurants that are now abundant in Moscow and St Petersburg, than downing vodka shots.
This shift in preference is supported by former President Dmitry Medvedev who, during his premiership, actively encouraged the nation to swap vodka for wine. He believes that drinking wine will steer Russians away from the spirits that are more potent and can rapidly lead to addiction and health problems. Of course, only time will tell if this tactic is successful but the adoption of such a strategy does prove that wine is very quickly becoming an integral part of Russian culture.
However, it is wine's rise in reputation as a luxury product that has been the most significant trend. The transition from a socialist to a market economy in the early 1990s created new middle and upper classes in Russian society, that have embraced the luxury goods market at a terrific pace. The Russian luxury market rose a remarkable 17% in 2010-2011 whilst that of the global market lagged behind at only 4%. Russians want the best and it is fine wine, not only as luxury drink, but more and more as an astute investment, that has contributed most to this striking increase.
As a nation, Russians have traditionally been fairly conservative with their investment choices but over the past few years there has been a definite sea change. Russians have become far more savvy about where to put their money, and as the traditional stocks and shares markets become increasingly less stable, they are veering towards alternative investments. Whilst their fellow BRIC countries, Brazil, India and China, opt for luxury jewellery and clothing, the appealing profit possibilities of the fine wine industry has lured the Russians into investing their money into wine.
With these factors in mind, we at Vin-X feel that Russia will soon become the leader of the fine wine market.
Russia now ranks among the top ten in global wine sales and I am certain that the positive trend in the growth of the country's wine industry will continue in the years to come. I have travelled Russia many times and it is a fascinating country. I understand what Russian investors are looking for and fine wine satisfies the criteria they seek to satisfy. Russian trends are unique and anyone entering the market must be fully aware of them. Russians want nothing but the best, and so are sure to continue in their search for wines of the highest quality and best value from which they will gain the greatest profit.
As the fine wine culture has grown in Russia, so has the population's knowledge in the area. An increasing number of Russians are beginning to produce their own high-quality wines on their own vineyards, and, consequently, many more people are forming their own opinion on what makes a fine wine. This has made them all the more discerning when choosing the wines in which to invest their money, and has increased the competitiveness within the market. They are therefore looking for investment advisors with an extensive knowledge in the area; who they can trust to provide them with high-quality wines with the greatest potential for profit.
Vodka brands still dominate the domestic alcohol market, while there are no leading wine brands as yet. Similarly, their alcohol market is still very heavily regulated. Nevertheless, because of Russia's entry into the WTO alliance in December 2011, wine import duties will fall from the current 20% to 12.5% within the next three years, which could spark a further boom in fine wine investment.
Follow Peter Shakeshaft on Twitter: www.twitter.com/vinxfinewine