Russia looks to set up state wine corp

Russia is looking to establish a large state-owned corporation to produce “wine materials” on home soil, raising industry fears of a shift away from wine imports.

Boris Titov, right, with Russian president Vladimir Putin (Photo: Kremlin Presidential Press and Information Office)

Announcing the plan to the press on Sunday (August 24), Russian business ombudsman Boris Titov proposed the setting-up of a state-owned organisation to help increase the country’s wine production capability.

Russian news agency ITAR-TASS reports that Titov said: “We have proposed to establish a large corporation, which will be state-owned at the first stage, which would produce wine materials rather than operate on the wine brand market.”

A move like this would be certain to threaten wine imports to the country from the rest of the world, where investment has poured over recent years as the Russian economy grew and its status as one of the BRICs countries cemented.

If it were set up, the state corporation would be used to create a pool of machinery for vineyard treatment as well as logistics centres to dispatch output to other regions.

Most Russian winemakers currently buy the larger part of “wine materials” from Spain, Chile and Italy to produce sparkling wines, Titov said.

And, candidly, he is quoted as saying that the corporation would be established “for the purpose of import substitution.”

Seat of power: St Basil’s Catherdral, Moscow

His proposal is part of a government strategy to develop the Crimean wine-making industry since Russia annexed the territory earlier this year.

An overall scheme for Crimean wine is expected to be submitted to the Russian government at the beginning of next month.

Wine and spirits are feared to be the next products to be targeted for import embargoes by the Russian government after bans on Western food products were brought in earlier this month in response to EU sanctions over the Ukraine crisis.

In July, Russia set up a working group headed by Titov to study the prospects of developing vineyards and wine-making in Crimea.

In early August, the group submitted the first part of its strategy to Deputy Prime Minister Dmitry Kozak, describing the prospects of developing wine-making in Crimea based on state ownership.

Boris Titov is one of the founding members of Right Cause, a right wing political party committed to promoting the free market and private business.