In Russia, an upstart whiskey distiller looks to break the vodka mould
By Sergei Berets
KEMLYA, Russia, Oct 8 (Reuters) -Russia may be known for its vodka, but in a rural village a few hundred miles east of Moscow, a whiskey distillery is hoping to tempt Russians to embrace a different tipple.
Western alcohol producers slashed their exports to Russia after Moscow sent troops into Ukraine in February 2022. Though some brands are now shipped through grey import channels, the sudden supply slump helped domestic producers, whose sales have more than tripled in the last two years.
Russia's nascent whiskey industry is one of many examples of domestic producers seeking to fill gaps left by foreign companies that stopped operations in Russia over the conflict in Ukraine.
In Kemlya, a small settlement 310 miles (500 kilometres) east of Moscow in Russia's Mordovia region, the Kemlya Distillery is hoping the quality of its oak-aged whiskies will attract discerning Russian drinkers, provided they can stomach higher prices.
"The maths is simple," Gennady Silivanov, Kemlya's master blender told Reuters. "A Russian man would buy one bottle of a quality liquor instead of 10 bottles of cheap stuff like vodka or something like it, and drink less."
Kemlya's whiskies, with names such as "Russian Oak" and "Balkan Virgin", sell from between 11,000 and 16,000 roubles ($115-167), about 20 times higher than the average price for a bottle of vodka.
The company, which has been producing whiskey since 2015, plans to release a blended whiskey at a cheaper price for mass consumption by the end of 2026.
Sales of Russian whiskey, including from local distillates, have grown three times in the last two years, NielsenIQ Russia said in August.
Imports slumped in 2022, as the likes of Diageo DGE.L, Pernod Ricard PERP.PA and other independent alcohol producers cut back on Russia sales, but they recovered in 2023 after Russia legalised so-called "parallel" imports that allow goods to enter the country without the brands' permission, according to specialist publication RBC Wine.
Imports of Scotch, upon which Kemlya bases its own production, have particularly suffered.
"Exports of Scotch Whisky to Russia have fallen from 28 million pounds ($36.6 million) in 2021 to 12.7 million pounds in 2023," a spokesperson for the Scotch Whisky Association told Reuters. "In addition, shipments to indirect routes to market have also decreased significantly."
EQUIPMENT SWITCH
Kemlya has also struggled to access parts. Forsyths, the Scotland-based specialist equipment maker for Scotch whisky has cut exports to Russia, too.
"Unfortunately, we are in such a situation now that it is extremely difficult to place an order for equipment with them," Silivanov said.
The solution, so often the case with Russian manufacturing shortages now, is to turn to China.
"Chinese engineers have replicated one of the Scottish models," Silivanov said, showing off equipment commissioned in Shanghai. "The exact shape of pot stills that we specifically needed."
Kemlya's whisky went down well in Bruce Bar, a whiskey-speciality bar tucked away on a side street in central Moscow, garnering interest from whiskey enthusiasts as a genuine Russian single malt.
In blind tastings, Kemlya's whiskies have rubbed shoulders with those from Scotland and other countries, sometimes outperforming even Scottish brands, Daniil Vinner, co-owner of Bruce Bar told Reuters.
"If whiskey is produced in Taiwan or New Zealand, why can it not be produced in Russia?" he said.
($1 = 96.0955 roubles)
($1 = 0.7651 pounds)
Reporting by Sergei Berets and Reuters TV; additional reporting and writing by Alexander Marrow; Editing by Alex Richardson
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