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Russia Silences Wine Advertising

A ban on alcohol advertising—and possibly articles—pits the government against a growing wine culture

Robert Camuto
Posted: January 30, 2013

Russia’s latest salvo in a long battle against alcohol abuse by its citizens is a sweeping ban on all alcohol advertising in media outlets. It's likely to have an unforeseen victim: the country’s small but booming wine culture.

Russian governments have fought the country’s age-old culture of hard drinking for more than a century. A 2011 global report by the World Health Organization (WHO) on alcohol abuse cited Russia and its neighbors as the hardest-drinking countries in the world. Now, provoked partly by a rising tide of youthful beer binge drinking, the government is cracking down on what it sees as an important public health issue.

Few observers think Russia’s newly emerging and increasingly sophisticated fine wine scene was in the sights of the legislature, the Duma, when it enacted the advertising ban last summer. Nonetheless, the law, which took effect Jan. 1, has had an impact. It makes no distinction between beer, wine and spirits. All advertisements are banned in both traditional and online media, and state authorities have warned the ban may be applied to the editorial content of wine publications and newspaper wine columns.

“Wine is not one of the hit targets of the government … yet,” said Spiros Malandrakis, an analyst of the global drinks markets for Euromonitor International, a London-based market research firm. “They mostly focus on hard liquor and beer, but the law makes no distinction.” Beer in particular has been a sore point, and to stem the tide of its growth among young people (Russia’s legal drinking age is 18), the government in recent years has doubled excise taxes, limited hours of sale and, as of January, outlawed sales from sidewalk kiosks.

According to WHO's 2011 study, the average Russian drinks the equivalent of about 15.7 liters of pure alcohol per year—65 percent more than in the U.S. Nearly two-thirds of the alcohol consumed comes from hard liquor, one third comes from beer and only 1 percent from wine.

Nevertheless, wine consumption is growing at a steady 6 percent a year, according to Euromonitor. At the top end of the market, fine wine is growing much faster—middle class and affluent Russians are turning away from vodka and looking to wine as a less potent, food-friendly alternative. Importers say that the market for wines from France, Italy, Spain and the New World—after a downtown following the 2008 economic crisis—has rebounded with double-digit growth. And Russians are willing to pay the price for quality. Because of high import taxes and markups, a bottle of wine sold in boutiques and restaurants is generally three to five times more expensive than the same bottle in Europe or the U.S.

While most of Russia’s $8 billion wine market comes from imports, a significant fraction—mostly inexpensive supermarket wine—comes from its own industry in the southern part of the country. Vineyards destroyed during a Soviet-era period of near-prohibition in the 1980s are being replanted, and there is even a small, nascent push for quality among Russian producers using indigenous grapes. Ironically, that movement has been encouraged by the government, which has liberalized laws to allow producers to sell directly to consumers.

Russia’s leading wine critic, Igor Serdyuk, said the ban will limit wine knowledge and make it more difficult for quality Russian producers as well as foreign winemakers to communicate with the public. “Wine culture is coming back to us. We are rediscovering our traditions,” said Serdyuk, who writes for the daily business newspaper Vedomosti, owned partly by Dow Jones & Company and the Financial Times. “And just at the time of the revival you have this stupid law saying that wine is bad.”

Russia’s modern wine scene began in the 1990s after the collapse of the Soviet Union. As private enterprise grew, Russians sought many of the pleasures and luxuries of European life, including wine, and dozens of importers sprung up to meet the need. In the last decade fine wine has grown along with a gastronomic food scene chiefly based in Moscow and Saint Petersburg. Wine tastings, wine clubs, wine shows and wine schools are the pillars of the scene that is also supported by critics and two national wine publications that review wines and inform readers about global wine regions.

In Russia’s complex legal system, local ministry offices and courts have broad power to interpret and apply laws. For that reason no one knows the exact scope of the ban.

Alexander Gubsky, deputy editor of Vedomosti, said officials in the Russian anti-monopoly ministry charged with enforcing the ban have signaled that they will be scrutinizing editorial columns such as Serdyuk’s. In a meeting with ministry officials late last year, Gubsky said, “They mentioned that any stories we run should not provoke an interest in alcohol or they could be seen as advertising.” The paper continues to run its wine column, but Gubsky said, "We will have to wait and see. We don't know what they will do—even they don't know.”

In the past decade, several wine magazines have started and failed. Both of the surviving publications are distributed free in restaurants and wine stores and are dependent on advertising for survival. They are trying novel efforts to get around the law. “We are fighting for our lives,” said Tatiana Zlodoreva, publisher and CEO of the Vinnaya Karta (Wine List). “But for how long we can continue, nobody knows.” Vinnaya Karta, founded in 1999 by American Russophile and businessman Taylor Maxwell, barely breaks even publishing 30,000 copies of each monthly issue.

The February issue features general information about vineyards, winemakers and restaurants in eight numbered pages. But all information about specific wines is moved together with advertisements to a separate four-page, non-numbered pullout "insert” folded in the middle of the paper. Zlodoreva insisted this could be a legal way to skirt the law. “Nobody knows what the reaction will be to this,” said Zlodoreva.

The other national wine publication, Simple Wine News, is trying a different tack. The glossy lifestyle magazine, founded in 2005 by Simple, an importer and retailer of Italian and French wines, has stopped calling itself a magazine. Its 10 editions for 2013 will all be labeled books and scrubbed of all periodical edition dates.

Russia’s growing appreciation for wine is unlikely to stop. Even if public dialogue is silenced, the wine culture is likely to thrive in venues such as wine clubs, wine dinners, private tastings and nonprofessional wine blogs and social media pages that won’t be affected by the law.

Christina Mokus, marketing director of decade-old Eurowine, a small importer of wines including Georges Duboeuf Beaujolais and Pol Roger Champagne, said the company won’t be affected because it promotes its wines almost exclusively with tasting events, dinners and a Facebook fan page that for now appears off-limits to the ban. “This is how our clients get to know about our wines,” she said. “It’s more about private dialogue.”

Ned Osborn
Phillydelpia —  February 7, 2013 5:13pm ET
They don't like orphans, gays, or now wine. What's next? Self-loathing seems to be their real passion. Oh well, I just had nice bottle of Georgian Eniseli Baraka. Now there's more for us.

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