Russia set to adopt law classifying wine as agricultural product that can be advertised; wine production to now be controlled by Agriculture Ministry and state will provide subsidies for planting new vineyards

Nevin Barich

RUSSIA , May 28, 2014 (RBC News) – Russia is about to adopt a law on wine classifying it as an agricultural product that can be advertised. Wine production will now be controlled by the Agriculture Ministry and the state will provide subsidies for planting new vineyards. This was decided at the meeting chaired by Prime Minister Dmitry Medvedev. Russian wine producers are enthused.

Currently, the Federal Service for Alcohol Market Regulation oversees wine production.

Separate laws regulating wine industry exist in many countries, for example, France, Austria, Italy, Portugal, Spain, Chili, the U.S., New Zealand, and Australia. This industry is supervised by foodstuff departments or territory-based self-regulated organizations. They ensure that wines produced in a region comply with the quality standards and technical requirements.

Medvedev proposed including a new term in the law: 'appellation wines' referring to drinks from grapes produced in Russia. These wines would obtain state subsidies, specifically licensing will be facilitated and advertising will be permitted.

At present, all wine producing companies are on equal footing in terms of state regulation, which means that market leaders are companies that are engaged in the secondary wine production, i. e. they buy cheap wine materials and then bottle it.

The first reading of the amendments to the law on state regulation of the alcohol market is expected by the end of the State Duma's spring session.

(c) 2014 RosBusinessConsulting

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