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Party's over, Putin…Russian brewer crisis as imported hops cut and vodka exports dry up

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Brewers have appealed to the agriculture ministry to help them find ways to replace imported hops to avert a potential shortage, the Kommersant newspaper reported on Friday. Hops are an essential flavouring ingredient for beer, with brewers warning that a shortage could leave them struggling to produce the drink over the next few years.

Russian-owned brewers are heavily reliant on hops imports, which account for 98 percent of hops used.

Russian imports around 7,000-7,5000 tonnes of hops every year mainly from Germany, the Czech Republic and the United States.

However, brewers have warned that they would run into serious problems if supplies are disrupted as Western countries crack down on Russia following its invasion of Ukraine on 24 February.

Although hops imports have not yet been affected by Western sanctions, Moscow is becoming increasingly isolated from international trade, meaning the supplies could soon dry up.

Most Russian brewers have enough hops to last them a few months but would face a crisis in summer if supplies are cut off, according to a statement from the Russian Union of Brewers.

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The Union called on the government to support the establishment of local production to allow the country to be self-sufficient, though the process is likely to take some time.

The Association of Russian Hops Producers estimates that it would need more than 500 million roubles ($6.4 million) in annual state subsidies for 3-5 years to increase production to 1,000 tonnes by 2030.

Meanwhile, domestic brewers could face higher demand than ever as global competitors boycott Russian over the war with Ukraine.

European giants Carlsberg and Heineken announced plans to exit the Russian market last month, joining a growing number of Western companies who are cutting ties with the country as pressure grows on Moscow over atrocities in Ukraine.

Ukrainian President Volodymyr Zelensky has urged international companies to turn their backs on the Russian market to put pressure on Moscow, with giants from Apple and Nike to McDonald’s and Mastercard all joining the mass exodus.

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Carlsberg holds a 27 percent share of the local market through its ownership of the country’s biggest brewer Baltika, with the move expected to have a substantial impact on the Russian market.

Announcing its exit, Carlsberg said: “We have taken the difficult and immediate decision to seek a full disposal of our business in Russia, which we believe is the right thing to do in the current environment.

“Upon completion we will have no presence in Russia.”

Western countries have also cracked down on another drink much-loved by Russians, vodka.

The United States and the European Union have banned imports of Russian vodka.

The EU announced the move in the latest tranche of sanctions against Moscow, which introduced a ban on high-end foodstuffs including vodka and caviar expected to cost Russia at least 5 billion euros a year.

Russia’s vodka producers will also be crippled by the UK government’s import duty hike which will hit around £900m worth of key products as Russian-made products disappear from Western countries.

Many UK businesses have already chosen to ban Russian products from their stores, with supermarket chains Sainsbury’s, Waitrose and Morrisons all removing Russian-made vodka from their shelves.

Pub giant Wetherspoons pulled all Russian beer from its outlets days after Vladimir Putin launched his invasion of Ukraine.



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