Russia’s alcohol production plummets amid tax hikes and anti-drinking measures

Russia is experiencing a significant drop in alcoholic drinks production, which fell by 25.6% in February 2025 to 19.9 million decalitres (daL), compared to 26.8 million daL in the same period last year. This marks the lowest production level for the first two months of the year since 2017. The post Russia’s alcohol production plummets amid tax hikes and anti-drinking measures appeared first on The Drinks Business.

Mar 12, 2025 - 11:45
 0
Russia’s alcohol production plummets amid tax hikes and anti-drinking measures
Russia is experiencing a significant drop in alcoholic drinks production, which fell by 25.6% in February 2025 to 19.9 million decalitres (daL), compared to 26.8 million daL in the same period last year. This marks the lowest production level for the first two months of the year since 2017. St. Basil's Cathedral on Red Square, Russia. According to data from the Russian Federal Service for Alcohol and Tobacconist Control (RATC) and the Unified International Maritime and Substances Control Service, the production of alcoholic beverages with over 9% ABV declined by 23.4% year-on-year in January-February 2025.

Vodka production hits eight-year low

The most significant decline was seen in vodka production, which dropped by 26.3% in January-February 2025, totalling 7.6 million daL — its lowest level in eight years. Key factors driving this decline include rising excise taxes and a substantial increase in the minimum retail price of vodka. Additionally, several Russian regions have intensified anti-alcohol campaigns, further impacting sales. For example, in Vologda, one of the largest regions in northwest Russia, the governor recently signed a law restricting the sale of vodka and other strong alcoholic drinks to just two hours per day.

Other spirits also affected

Beyond vodka, other spirits have also seen sharp production declines. Cognac production fell by 18.3%, while liqueurs and vodka-based products declined by 14.8%. Other spirits, including rum, whisky, gin and soju, saw a 21.2% decrease.

Wine production bucks the trend

Despite the overall downturn, wine production was the only category to see growth. Still grape wine production rose by 14.8% to 5.1 million daL, while sparkling wine increased by 16.1% to 2.4 million daL. According to Vadim Drobiz, director of the Russian Centre for Research of Federal and Regional Alcohol Markets (CIFRRA), the country’s wine market is currently in a state of upheaval. Russian wine producers are preparing for an almost complete halt in wine imports from “unfriendly” states. However, this could allow domestic winemakers to fill the gap, despite a recent rise in wine imports from Latin American countries and Georgia.

Unexpected shock in vodka market

Drobiz noted that the sharp decline in vodka production surprised many analysts. He explained that there was “no grandiose overproduction of vodka last year” that could have led to such a drop.

Continued decline in alcohol production

The downward trend in Russian alcohol production has been ongoing. Total production fell for the third consecutive year in 2024, with figures reaching 199.5 million daL in 2022, 191.6 million daL in 2023 and 188.1 million daL in 2024.

Government policies driving decline

Analysts predict further declines in strong alcohol production due to directives from President Vladimir Putin to curb vodka and spirits consumption. Following the start of the Russia-Ukraine war, the government approved a state policy to reduce alcohol consumption from 8.9 litres per capita in 2023 to 7.8 litres by 2030. Before the pandemic and the war, alcohol consumption in Russia had been falling. However, recent years have seen a resurgence, with an annual growth rate of about 5%, as many Russians increasingly prefer to drink at home.