One of the largest producers of sparkling wines Moet Hennessy suspends shipments to Russia. The reason is the bill passed by the Federation Council, which sets new requirements for wine products. Moet Hennessy fears that wine from the Champagne province will now have to be certified as “sparkling” and not as “champagne”, which the company is not ready for. Controversies in the bill threaten wider problems and could lead to the re-certification of thousands of wines, which will take about two months.
The Russian structure of Moet Hennessy, a major producer of alcoholic beverages (part of the LVMH holding), Moet Hennessy Distribution Rus, has warned local buyers about the suspension of the shipment of the range of sparkling wines. This is stated in a letter from the company to partners on July 2, a copy of it was published on social networks by a top manager of a large alcohol distributor. A Kommersant source in one of the federal networks confirmed the receipt of the document. A notice from Moet Hennessy came to the ABC of Taste, says a network spokesperson. According to him, today this is the only company that has stopped the shipment of sparkling wines – no such information has yet been received from others.
The reason is in the bill of a group of State Duma deputies, which amends the law on the regulation of the production and circulation of alcoholic beverages. The bill was adopted by the Federation Council on June 23 and should now be sent to the president for signature. The document clarifies and concretizes certain regulations and norms related to wine production, and is aimed at the development of Russian winemaking. Among other things, the bill gives a new definition of “sparkling wines (champagne)”, with the specifics of production, the permissible content of ethyl alcohol, carbon dioxide, etc.
In addition to the general decrease in the quota for the supply of sparkling wines for Russia for 2021, the producers of the region did not confirm their readiness to change the category for the Russian market, in connection with which the stock of sparkling wines of the company remains at an “extremely low level.” Therefore, a decision was made to temporarily suspend shipments, the letter says. Kommersant sent questions to the Russian office of Moet Hennessy, Rosalkogolregulirovanie and the Ministry of Finance, which oversees the industry.
Yuri Fedyukin, Managing Partner at Enterprise Legal Solutions, notes that the draft law looks “rather strange” in terms of its conceptual framework. For example, “sparkling wine (champagne)” formally corresponding to the draft law may not correspond to the already approved technical regulations for these products, that is, the same wine may not be champagne at the same time, the lawyer points out. Mr. Fedyukin agrees that the concerns of manufacturers are quite justified. According to him, the situation may not be limited only by problems with classifying wines from Champagne as champagne, and other contradictions with current legal acts are also possible.
The head of the WineRetail information center, Alexander Stavtsev, is aware of the problem. According to him, the adoption of the amendments may also affect wine producers with an indication of geographical origin, which may now have to use the definition of “protected geographical indication” (PGI) adopted in the Russian Federation. We are talking about approximately 20 thousand labels. And, as Mr. Stavtsev notes, in order to undergo re-certification, importers will need to hand over product samples in Russia. According to a Kommersant source in a large retail network, if supplies are suspended, at best, new declarations will be made in one or two months. In addition, distributors have already purchased excise stamps for importing wines to Russia at the end of the year, and there is a risk that the process will have to start anew, adds Alexander Stavtsev. At the end of 2020, alcohol imports to Russia decreased by 2.36%, to 41.2 million decaliters. Imports of still wines decreased by 2.22% to 26.24 million decaliters, while imports of sparkling wines and champagne increased by 3.5% to 5.9 million decaliters.