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Pouring Through Uncertainty: How Wine Keeps Flowing Amidst Global Tensions

Apr 23, 2024 •  4 min read

While Russia has been a significant importer of European wine, the government’s threat of retaliatory taxes and tariffs on wines from countries that oppose its war against Ukraine could change that. (Lorenzo Di Cola/NurPhoto via Getty Images)

Amidst the backdrop of global upheavals and geopolitical tension, a rather unexpected protagonist emerges—wine. Yes, you read that right, wine. In the swirling mists of international sanctions and wartime rhetoric, the steady flow of European vintages into Russian glasses presents a curious narrative of resilience and adaptation. Anatoly Korneev, a seasoned wine dealer and the founding partner of Russia’s Simple Group, finds himself at the heart of this intriguing wine trade. Imagine, sipping on a Chianti while sanctions and tariffs buzz around you like annoying flies at a picnic.

For decades, European countries, with Italy leading the pack, have been the main sommeliers to Russia, pouring out nearly $1 billion worth of wine just last year. But as the winds of war blow colder, and Moscow whispers threats of economic retaliation against countries siding with Ukraine, the future of this lush trade hangs on a vine. Korneev, a vital link in this chain, travels frequently between the vineyards of Italy and the snow-dusted streets of Moscow, navigating through what he describes as a “foggy area” in global commerce.

Tasting Notes on Geopolitical Tensions: Sipping Through Sanctions

The scene unfolds at the annual Vinitaly wine fair in Verona, where the scent of uncertainty is as pungent as a robust Bordeaux. The fair, a mecca for oenophiles, is abuzz with whispers about the ongoing conflict and its ripple effects on the global economy. Italian vintners are notably uneasy. Despite a drop in exports to Russia, due to the clever positioning of Latvia as a strategic hub, shipments continue—led by sparkling stars like Prosecco. Yet, every pour is shadowed by the specter of heightened tariffs and chilling taxes proposed by a Kremlin that’s feeling more cornered than a caged sommelier.

Sales of Prosecco to Russia have grown since 2022, but Italian producers expect that volume may soon drop. (Vincenzo Pinto/AFP via Getty Images)

The Russian market, a once-booming bastion for European winemakers, is now a landscape of uncertainty. Tariffs on “unfriendly” wine imports have bubbled up from 12% to a frothy 20%, with murmurs of a staggering spike to 200%. Meanwhile, Moscow’s planned tripling of excise taxes on bubbly threatens to put a cork in the more affordable segments of this spirited trade.

The War on Wine: Vintages on the Verge?

So, what’s the deal with Russians still clinging to their Chianti and Champagne amidst such chaos? Well, it turns out that sanctions have a taste, and it’s not as bitter as you’d expect. The EU’s sanctions on luxury goods, set at a lofty 300 euros per bottle, conveniently sidestep the vast vineyards of everyday wines. This loophole keeps the rivers of less posh pours flowing freely, much to the relief of Russian wine lovers who can no longer jet off to their favorite European vineyards due to travel bans.

On the flip side, Ukraine is experiencing a wine renaissance of its own, with imports surging by 83% last year. It seems that even in times of turmoil, or perhaps because of it, the desire to find solace in a glass of wine remains unshaken.

Despite sanctions against Russia, the country’s stores continue to import many premium European goods, and Russians still drink European wines while dining out. (Ulf Mauder/picture alliance via Getty Images)

Last Call: Will the Wine Well Run Dry?

As we swirl the contents of this complex goblet, one can’t help but ponder—what happens when the political hangover sets in? Italian winemakers, like the astute Sandro Boscaini of Masi, worry about tomorrow’s market. Yet, amidst this fermenting fear, hope springs eternal. Wine, according to the hopeful Korneev, should serve as a bridge between cultures, a flowing vine that binds, rather than divides.

In a world where politics often spill over into our daily lives, disrupting even the simple pleasures like a good glass of wine, the story of these vintners and importers reminds us that perhaps, in wine, there’s a truth more potent than politics—the enduring human spirit, one toast at a time.