Russia mulls ban on western alcohol imports

Spirits could once again be in the firing line of a diplomatic row as Russia considers trade sanctions against the US and its allies.

A feud between US and Russia could hurt spirits exports

On Friday (13 April) Vyacheslav Volodin, chairman of State Duma, the Russian parliament’s lower house, introduced a bill to “respond to boorish behaviour on the part of the US”.

The bill, which has now been sent to president Vladimir Putin to consider, proposes a complete ban or restriction on “agricultural products, raw materials and food products originating in the United States or other countries that support the measures that the US has taken towards our country”, first deputy chairman of the State Duma, Ivan Melnikov, said.

The proposed sanctions refer to alcohol and tobacco, as well as nuclear imports, medicines and technology software. The bill, which may extend beyond the US to its allies, will be considered in a first reading on 15 May.

Tensions between Russia and the west hit new heights following military strikes in Syria by US, UK and French forces targeting facilities linked to chemical weapons manufacturing. The Assad regime in Syria, which is accused of carrying out a chemical attack in Douma, is supported by Russia.

Diplomatic ties between Russia and a number of countries have also been severely strained following the poisoning of ex-spy Sergei Skripal and his daughter Yulia in Salisbury, UK, earlier this year.

The US and other allies to the UK expelled a number of Russian diplomats, and reports indicated that Washington is planning new sanctions on Moscow, but none have yet been confirmed.

Now, it seems spirits could be caught in the crossfire. A key US export is Bourbon and American whiskey, which has already been threatened by a 25% tariff in China as tensions between Beijing and Washington rise.

The latest threat from Russia could offer a blow to US spirits shipments, which increased by 14.3% to US$1.63bn in 2017, according to data from the Distilled Spirits Council.

If planned sanctions extend to allies of the US, Scotch whisky exports worth £7.6m could be at risk too. Russia is Scotch whisky’s 56th largest export market by value, according to the Scotch Whisky Association, which has declined to comment on the country’s latest threat of sanctions.

Russia’s alcoholic preference still has a clear skew towards vodka, but a number of international brands are targeting its potential for brown spirits. Last year, Pernod Ricard told The Spirits Business that Russia is the third largest market for Jameson, the world’s leading Irish whiskey.

In 2014, Russia banned a number of western imports in response to EU sanctions over Moscow’s annexation of Crimea, but spirits were exempt. The ban will continue until December 2018.