What are the consequences of the Russia-Ukraine conflict for the Spanish wine? We must pay attention to the trade war that will be waged alongside the military invasion of Ukraine. Will it harden UE the sanctions against Russia? How will this power respond? These questions can clarify what will happen to exports of Spanish agricultural products to Russia y Ukraine. Will the losses be very serious? Let's see what is really at stake.
Spanish wine and geopolitics
Days ago, we cared little what happened or not on the Russian-Ukrainian border. However, it has become clear again that any geopolitical disaster in distant places has consequences on our lives. In the case that we deal with in this article, we will make references to the economic consequences. More specifically the wine market.
Spain leads global wine exports. The previous year he took out of his borders 2.342,7 million liters to be sold all over the world. And while it is true that Russia y Ukraine They are not your main clients, they are two to take into account. The largest country in the world has always been a good client of Spain. In 2021 imported Spanish wine worth 28 million euros. A little less than the previous year.
This amount is striking but not so much if we take into account previous years. In 2017 he acquired wine worth 106'3 million, an amount that fell sharply after 2019. The reason? The authorities promulgated the new Wine Law of the Russian Federation, a protectionist measure to promote local wine. The Russian government also enacted other measures of a similar nature. On the contrary, wine exports to Ukraine have grown steadily in recent years. They went from 3 million liters annual in 2015 a 13'7 million en 2021.
What explains this sales volume?
In the first place we must highlight the luxury market in the Slavic giant. It has a population of 144 million inhabitants. However, the size of its economy is close to that of Spain. Countries like Canada, Italy, and South Korea outperform it in GDP despite having smaller populations. From this data it can be deduced that Russia has more military than economic power.
🇪🇺🇷🇺 Josep Borrell has declared that «we live in the darkest times in Europe since the Second World War».
He has called for the immediate cessation of hostilities and has warned that Europe will react with the greatest possible force. pic.twitter.com/biw0g2yAuO
— The Political Room (@Political_Room) February 24, 2022
However, there is a very characteristic business class in the country: the oligarchy. These men close to the Kremlin control the largest companies in the country with the approval of Putin. Among them we find a curious fact: Russia is the fourth country with the most billionaires according to Forbes despite the small size of its economy.
What can we expect from wine sales in Ukraine and Russia?
These individuals amassed fortunes thanks to the hydrocarbon (on which the Russian economy depends) and the military industry. Today they are known for their predilection for the luxury and within this, high-level gastronomy. In Ukraine there is also an oligarchy that controls the economy, although it is opposed to President Zelensky. It also demands luxury. However, despite this factor, exports to these countries represent a small percentage of total Spanish wine. According to figures from Spanish Wine Market Observatory:
- Russia: 0,93% of the volume and the 0,74% of the total value
- Ukraine: 0,44% of the volume and 0,49% of the total value
Germany, largest importer of wine from Spain in 2021 purchased wine worth €362,88 million. Very high figure compared to the 40 that is played in the Ukrainian conflict. However, it is not negligible. The sanctions that the European Union takes against Russia will be answered with new sanctions by Putin. These will have important consequences for Spanish economic sectors such as food. We will continue to report on further moves in the east. We also send a warm hug to the Ukrainian people.
