If they launch parallel imports, prices will skyrocket
Retailers were left without imported alcohol. In the next three months, the choice of alcoholic beverages in federal networks may be halved. According to the Association of Retail Companies (AKORT), for example, the range of imported champagne in large stores has already decreased by 95%. Sellers are convinced that without the legalization of parallel imports, the Russian consumer will begin to acquire dangerous counterfeit products. Meanwhile, the Ministry of Finance, on the contrary, believes that it is precisely because of parallel imports that a lot of counterfeit goods will appear on the market, which means that the risk of mass poisoning increases. Will the parties be able to reach an agreement?
Over the summer, the choice of imported alcoholic beverages in retail chains has decreased by 40-95%, depending on the category. The assortment of champagne in large retail chains decreased by 95%, whiskey – by 50%, French cognac – by 50%, imported beer – by 40%, other categories of foreign alcohol – by 35%. In the next three months, the assortment, according to the forecasts of the Association, will decrease by half.
Recall that since the beginning of the year, many foreign manufacturers have left Russia. Restaurants, bars, cafes and retailers worked on stock balances and warned in advance that by autumn there would be almost nothing to sell from foreign alcoholic beverages. And now autumn has come … And the sector of strong imported alcohol production has sunk most of all: whiskey, cognac, etc.
Meanwhile, consumers note that after the spring crisis, familiar imported drinks, such as wine, began to return to store shelves.
“Not all companies and suppliers of imported alcohol, including wine, previously represented in retail chains, have announced their withdrawal from the market and the cessation of supplies. Therefore, some brands appear on store shelves as orders are fulfilled. Although, at the same time, logistics – the delivery of drinks to Russia – is experiencing a high load and various difficulties, ”says Igor Karavaev, chairman of the AKORT presidium.
But in general, it is easier for us to replace the wines on the shelves with alcohol, since there are also friendly supplier countries (Argentina, Chile, Mexico), and the country’s own wine production is actively developing.
But it is impossible to replace the gone brands in categories for which production has not been established in Russia and there are no analogues and raw materials, Karavaev emphasizes. We are talking about drinks such as whiskey, gin, brandy, tequila, sparkling wine of the Champagne region. Most consumers have high loyalty and pronounced preferences for certain categories of drinks, and sometimes for specific European alcohol brands. Therefore, it is difficult to say whether this part of consumers will be able to switch to other drinks or alternative products.
“There are serious fears that the consumer, not finding the usual category or brand at a legal point of sale, will look for it in an illegal field,” says the chairman of the ACORT presidium. “The ability to import familiar goods through parallel imports will allow us to satisfy consumer demand, maintain a diverse assortment in each alcohol category, and avoid the risks of consumers purchasing counterfeit products.”
However, alcoholic beverages are not yet included in the list of parallel imports. The opinions of the relevant ministries regarding their inclusion in this system were divided. The Ministry of Industry and Trade, the Ministry of Agriculture do not object, but the Ministry of Finance is against it.
Parallel imports are likely to be allowed, says B&C Agency Managing Partner Ivan Samoylenko. The expert noted that the Ministry of Industry and Trade stated that this decision would be agreed and launched by the end of September. And then drinks that were supplied only by foreign manufacturers may again appear in stores (for example, well-known brands of Scotch whiskey, Cuban rum, etc.).
“Prices for such alcohol will certainly be higher than before. Simply due to the complexity of the logistics of parallel imports: it is several times more expensive to bring goods from Asian countries than from Europe. The cost of such alcohol may increase by 10-50% of the current price,” Samoylenko believes.
But at the same time, now domestic manufacturers have every chance to increase their share of presence in retail: to replace the departed foreign brands with their products. And that is why Russian wineries and distilleries are currently expanding their own brands. At the end of last year, their share in alcohol retail and federal networks was only 3.2%, and in 2022 it may double.
The green serpent crawls in a parallel course