Russia Labeling Law Cuts Off Imports of Dom Perignon and Krug
(Bloomberg) -- Moet Hennessy halted shipments of Champagnes such as Dom Perignon to Russia over new rules that now reserve the name for bubbly wines produced locally.
The decision affects other brands such as Ruinart, Moet & Chandon and Krug, and will give the company time “to understand and study the new regulations and assess their consequences,” a representative for French owner LVMH said in an email.
Russia now grants the exclusive right to use the term “Shampanskoe” -- Russian for Champagne -- to local sparkling wines. French Champagne producers are notoriously protective of their names, and the analysis of the new law is being carried out with others within the lobby group CIVC, according to the spokesperson.
“The Champagne region is outraged by the new Russian legislation on wine labeling,” the group said on July 5, three days after the new rules came into effect.
French producers are still allowed to use the Latin characters of Champagne on the main label. But those bottles must now also say “sparkling wine” in Cyrillic characters on the back.
France will reach out to Russian authorities “in the coming days,” Foreign Affairs Minister Jean-Yves Le Drian said on Wednesday in the Senate. If needed, he may also bring the topic to the World Trade Organization so that French Champagne producers’ rights are respected. The European Commission said it’s also evaluating whether the law infringes Russia’s commitments to the WTO.
Champagne producers restrict the name’s use within France, allowing it only for sparkling wines made in a limited area of the region. The name is protected in 120 countries, and Russian authorities didn’t inform CIVC of the upcoming change, according to the group.
“We’re urging for a dialog to resume with Russian authorities,” CIVC General Manager Charles Goemaere said. “Since the creation of our organization 80 years ago, our goal has always been to ask each country that the Champagne name be reserved for wines” originating in the French region, in any alphabet, he added.
Russia ranks as the 15th biggest market in value for French Champagne producers, according to CIVC data from last year. The market is worth about 35 million euros ($41 million), compared with more than half a billion euros for the U.S., the top export market.
Pavel Titov, president of the Black Sea winemaker Abrau-Durso PJSC, said the new rule is counterproductive and won’t benefit Russian producers. The products target a very different market, according to a spokesperson for another Russian winery, Fanagoria Estate.
A bottle of Abrau-Durso’s sparkling white wine costs about 700 rubles ($9.50) in Russian supermarkets, compared with roughly 5,000 rubles for a bottle of Moet & Chandon.
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