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Russia's Military Conflicts Have Caused Its Vodka Sales to Tank

Russian vodka sales are down more than 40 percent in volume and value this year to their lowest levels in a decade, thanks to Western sanctions and tensions over Ukraine and Syria.

by Wyatt Marshall
Feb 17 2016, 11:00pm

Photo via Flickr user Hannu Makarainen

For the world's biggest vodka-makers, the halcyon days of the early 2000s when vodka flowed like water are a thing of the past, as American drinkers are redirecting their attention to brown spirits. And while some hope to energize sales by turning to—what else—electronic music festivals, for Russian vodka makers, not even EDM can save them.

Russian vodka sales are down more than 40 percent in volume and value this year to their lowest levels in a decade, thanks to Western sanctions and tensions over Ukraine and Syria.

According to Reuters, who cite the Russian business newspaper Kommersant, sales are down for Russian vodka in every major export market. Unsurprisingly, sales are down the most in Ukraine, where they have fallen by 70 percent in the wake of Russia's 2014 annexation of Crimea.

"Relations between Russia and the West have been spoiled because of events in Ukraine and Syria and that could be the biggest reason for the fall in sales of Russian vodka," a Russian alcohol industry analyst, Vadim Drobiz, told Kommersant.

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According to the International Business Times, sales are down in Russian vodka's biggest market, the United Kingdom, by 35 percent, as well as in Germany (28.6 percent) and Latvia (14 percent), the next two biggest importers. In the United States, sales are down 22 percent. All told, the export value is down to $111.9 million from $187.1 million.

It seems unlikely that those numbers will be up any time soon. As Russia has ramped up its bombing campaign in Syria, NATO coalition officials have decried that the bombing is targeting Western-backed rebels and killing civilians. Over the weekend, Russian Prime Minister Dmitry Medvedev told the crowd at a security council in Munich that "We have slid into a time of a new Cold War."

Thankfully for Russian vodka-makers, there is still a healthy, or rather unhealthy, domestic demand. According to the World Health Organization, Russia (and Ukraine) have the most risky drinking patterns in the world, with Russians over the age of 15 consuming an average of 15.1 liters of pure alcohol per capita every year. Men over the age of 15 drink a staggering 32 liters of pure alcohol annually on average, while women drink a slightly more moderate 12.6 liters. For perspective, the average American—hardly a lightweight—drinks 9.2 liters of pure alcohol per year.

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And those Americans are increasingly drinking American spirits—in particular, bourbon. If a new Cold War is on, it appears the line has already been drawn when it comes to booze.

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