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29 April 2022

Russian brewers ask for help replacing imported hops

Russia | Although Russia’s hops imports have not yet been affected by Western sanctions, Moscow is becoming increasingly isolated from international trade. This must be the reason why Russian brewers fear they could be cut off from hops supplies.

They have asked the agriculture ministry to help them find ways to replace imported hops in the next few years, Reuters reported in early April 2022. Oddly enough, their letter was not delivered directly to the ministry, it also found its way into the media.

Local sourcing of key ingredients

Obviously, self-sufficiency must be the ultimate goal, as Russia is becoming an economic pariah. Except for hops, brewers can source all they need domestically. By some estimate, Russian-owned brewers (comprising all the smaller ones which control about 20 percent of the beer market) import 98 percent of the 7,000 to 7,500 tonnes they use every year, mainly from Germany, the Czech Republic, and the United States.

Russia's domestic brewers could also face higher demand as European rivals Carlsberg and Heineken have announced plans to exit the Russian market.

Supplies could run out in the summer

Most Russian-owned firms have enough hops to last them a few months but could run into serious problems in the summer if supplies were disrupted, the Russian Union of Brewers said in their letter.

So far, none of the western hop suppliers have said they will stop doing business with their Russian clients. But what if Russian brewers cannot pay their bills any longer? Western financiers severed practically every artery of money between the country and the rest of the globe after the invasion. This could have the same effect as a Western ban on hop exports.

What if the country runs dry of beer?

Observers say Russian brewers had another reason to sound the alarm. They will remember President Mikhail Gorbachev’s sweeping anti-alcohol campaign in the 1980s, which made Mr Gorbachev very unpopular immediately. Maybe Russian brewers worry that the same fate could befall Russia’s current President, Vladimir Putin, should a lack of hops strain beer supplies.

In any case, the brewers have asked the government to support the establishment of local production, although the process is likely to take some time. The Association of Russian Hops Producers estimates that it would need more than RUB 500 million (USD 6.4 million) in annual state subsidies for three to five years to increase production to 1,000 tonnes by 2030, the newspaper said.