Whisky boycott could be broken by Moscow vodka giant

The company has formally lodged its intention to bring the whisky in to Russia without the permission of the brand’s owner, Diageo.

Read more: Sales fears for Scotch over fake Russian whisky

Vladimir Putin’s government late last year announced it would allow what is called controversial “parallel imports” of selected premium alcohol brands, including Johnnie Walker.

Russian business daily Kommersant has revealed that Beluga, which is named after its best-known vodka, was the first to register for such shipments. 

However, the paper said another big distilling and distribution concern, Luding Group, was also planning on using the mechanism to bypass boycotts for both Johnnie Walker and Macallan malt.

Diageo, which announced it was pulling out of Russia nearly a year ago after Vladimir Putin dramatically stepped up his long-standing war on Ukraine.

The British company also ended its relationship with companies in St Petersburg and Moscow which were bottling Bell’s and White Horse whisky for the Russian market.

Read more: The Russian distillers damaging sales of Scots whisky

The Herald asked Diageo what, if anything, it could do to stop its products entering Russia against its will. It did not respond but it it did stress that it was close to winding down all its business in Russia.

A Diageo spokesperson said: “In March 2022, we stopped all imports of our products to Russia and stopped third-party, local production of beer and bottling of spirits. 

“In June, we took the decision to responsibly wind down the business and have now almost competed this process. Diageo is not either directly or indirectly importing or selling any products in Russia.”

Market observers stress that there is little international manufacturers can do to stop their produce entering Russia though parallel imports. However, it is also not obvious that it is easy to source and pay for bulk supplies.

Typically Russian distributors will have to buy stock from wholesalers in third countries, including near neighbours.

An investigation by the Mail on Sunday last week found Moscow stores were still selling British premium goods, including Rolls-Royce cars. 

As The Herald reported yesterday, Russian whisky consumption held steady at around 67m litres in 2022. That is because distributors have had stocks of imports and because Russian distillers and bottlers increased output by around a third.

Some Russian companies have been churning out what Scottish experts think is “fake Scotch”. Such products are designed to compete on price and availability with non-premium blended brands like White Horse as stocks of the latter dwindle. 

A bottle of Russian-made Mac Callister - a supposedly Scotch “whiskey” that misspells the word - costs little more than a quarter as much as Johnnie Walker.

There is still a market for better-quality Scotch blends in Russia - and for products like the popular German tipple Jaegermeister, which Beluga Group says it will also import via parallel legal channels.

Vadim Drobiz - who runs Moscow’s Centre for Federal and Regional Alcohol Markets - reckons domestic output now accounts for 45% or so of Russian whisky consumption.

But he scoffed at widespread reports those who prefer Scotch or other premium imported booze would have to do without because of boycotts.

“It is only the middle class that drinks imported whisky, rum, gin and tequila and the like,” he said. “They have a certain mentality.” 

“But we have parallel imports and duty free and -in reality - the middle classes will not have to do without their imported products. This is despite the fact that the media since the spring has been saying that - any time now - premium brands will disappear.” 

Russia officially imported £28m worth of Scotch in 2021 the last full year before Mr Putin’s full-scale invasion of Ukraine. However, this figure does not include imports made via Latvia, which re-exports vast amounts of western spirits to Russia.