Dry figures: why beer and vodka production in Russia is falling
The Russian alcohol market is going through some difficult times this year. According to Rosalkogoltabakkontrol, the production of almost the entire range of beverages — from spirits to beer — decreased significantly in the first eight months of this year. Although the tax burden plays a role in what is happening, it is not worth reducing the decline only to excise taxes and fees. What factors lead to a reduction in production, how breweries and distilleries are trying to adapt to a new, more sober reality, and whether the recession is a long-term trend — in the Izvestia material.
Double-digit reduction
Russian vodka companies produced 39.6 million decaliters (dal) of vodka in eight months, which is 12.1% less than a year ago. Cognac production decreased by 16.8%, to 4 million dal, and in the case of alcoholic beverages increased by 0.1%, to 11.4 million dal. In total, drinks with a strength above nine degrees were produced by 10.9% less than in the same period last year. At the same time, the production of low-alcohol beverages more than doubled, to 495.6 thousand dal.
The production of fermentation products (beer, beer drinks, cider, poiret and mead) in January – August decreased by 6.3%, to 593.4 million dal. But it's at the expense of beer: Its production decreased by 6.2%, to 507.6 million dal, and beer drinks (which in most cases would also be considered beer in a foreign classification) — by 7.9%, to 75.9 million dal. The only sector in the entire market that has been able to support growth is cider, along with poiret and mead. Their production increased by 1%.
High base
One of the obvious reasons for the current recession was the aggressive increase in excise taxes, which naturally transformed into an increase in retail prices. Daria Ananyina, an analyst at Gazprombank's CEP, provides specific figures: the average cost of vodka in July 2026 increased by 15% year-on-year, reaching 981 rubles per liter, and beer rose in price by 11% (to 217 rubles).
However, it would be a mistake to reduce everything exclusively to the tax press. Maxim Chernigov, Associate Professor of the Department of Management at the Presidential Academy in St. Petersburg, points out the complex nature of the problem.
"Several factors are simultaneously pressing on the market: an increase in the cost of raw materials, packaging, components, logistics, credit resources, an increase in minimum retail prices for strong alcohol, as well as a decrease in consumer activity," the expert lists.
The situation is aggravated by the so-called high base effect. In 2024 and 2025, manufacturers and distributors, anticipating the upcoming increase in excise taxes, actively worked "in the warehouse", forming huge stocks. Now this canopy is putting pressure on the market: companies are selling off old products, reducing new brewing and bottling volumes. No one is working for the future anymore, everyone has switched to strict planning based on current demand.
Regional policy has become a serious administrative barrier. In a number of federal subjects (Moscow, Kaluga, Vologda regions), the authorities began aggressively narrowing legal sales channels, reducing trading hours and prohibiting the sale of alcohol in catering establishments located on the ground floors of residential buildings. Such pressure, according to the Izvestia interlocutor, carries an obvious risk: part of the demand goes not to cheaper categories, but to the gray or openly illegal sector.
Saving on a degree
Changing consumer behavior is another powerful driver of falling production volumes. Alexander Stavtsev, head of the WineRetail information center, states that the population has switched to an economy strategy against the background of the stagnation of retail trade in physical terms (in kilograms and liters).
— Alcohol is not considered essential goods. And if we're going to save on something, then this is one of those items that people respond to first by keeping their consumption in categories such as children's goods, pet products, or health products," explains Stavtsev.
In addition to outright abandoning purchases, consumers are massively switching to cheaper alternatives. This explains the growth of the cider category. Real direct-pressed ciders from apples practically do not grow. The growth is provided by drinks that visually and tastefully disguise themselves as sparkling wines. The consumer sees a drink on the shelf that resembles champagne, but costs twice as much (since it belongs to the category of ciders with a lower excise tax rate), and makes a choice in its favor. A similar process is underway in strong alcohol, where consumers are switching to cheaper tinctures.
A correction, not a crash
Despite double-digit declines in some categories, there is no reason to talk about a crisis or the threat of mass bankruptcies in the industry. Experts urge to assess the situation over long horizons. Vodka consumption has been growing since 2020, and the wine market has been in a cycle of continuous growth since 2017. The current recession is a correction of an overheated market, not a disaster.
The industry is adapting to new conditions through cost reduction and the search for new niches. A striking example, according to Alexander Stavtsev, was the deep localization: almost all the gin on Russian shelves is now of domestic production (more than 90%), and rum and tequila bottling projects are being actively launched.
— Now we see the strategies of manufacturers to reduce commodity balances, for example. No one works at the warehouse. Everyone works based on demand and looks at planning issues. In addition, in recent years, the hard alcohol (premium spirits) market has been significantly supported by localization. Due to this, the price of the product for the end user decreased, and the category (gin. — Ed.) in liters did not fall much, even grew until recent months, — the interlocutor of the editorial office points out.
Manufacturers are experimenting with formats: distilleries, moving away from high excise taxes on vodka, are starting to produce soju, a hyped product with a different margin, which is alcohol diluted with water and food additives.
The long-term trend noted in Gazprombank's CEP is related to a fundamental change in habits. Russia is gradually but steadily sliding down in the world ranking of alcohol consumption (currently 29th place, a decline of 24 positions since 2010). The healthy lifestyle agenda reduces the demand for traditional alcohol, while stimulating explosive growth in the categories of non-alcoholic beer and wine.
In 2026, according to analysts, the total production of alcoholic beverages in Russia (excluding beer and cider) may decrease by 7-8%, and the brewing sector will decline by 2-3%. The industry will be polarized: large brands and manufacturers of the low-cost segment will remain stable due to scale, while the middle price segment will continue to shrink. The market has entered a consolidation phase, so now not only production volumes are important for success, but also the ability to quickly adapt to the new regulatory and tax reality (often quickly change the label on your products).
Переведено сервисом «Яндекс Переводчик»
