“The problem with the world is that everyone is a few drinks behind” –F. Scott Fitzgerald

Russia represents a US$40 bln market for alcoholic beverages, with beer sales at approximately US$15 bln (38%). However, Russia also has a substantial black market with illegal products accounting for 38% of the alcohol market and up to 50% of vodka sales in 2016. Sales of alcoholic beverages have been declining since 2008 with beer sales down 40% in that period.

The market is close to levelling off as the economy pulls out of recession and heads into sustainable, if modest, annual growth. There is fast growth in sales of non-alcoholic beer and demand for Russian wines is also growing fast with production growth of almost 15% YoY in 2015. This strong growth trend is expected to continue. Demand for cider, perry and mead is also rising strongly and, in aggregate, volumes rose 35% in 2015 YoY.

Macro-Advisory Ltd. is the leading strategy firm focused on the Eurasian region. The firm provides economic, political and industry analysis for strategic and portfolio investors. Macro-Advisory’s specialty is helping its clients to optimize their business strategies and to make their forecasts more reliable. Macro-Advisory cuts through the noise to help businesses focus on the underlying trends, the real political risks, and the opportunities across the region.

The firm’s senior partner, Chris Weafer, was voted best Russia/CIS strategist for 2013-14 in separate surveys carried out by Institutional Investor and Thomson Reuters Extel. He is a frequent contributor to the Financial Times, Wall Street Journal, Bloomberg, CNBC, and other media outlets on issues associated with the region.

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