In this interview Edoardo Freddi talks about wine exports to Russia, consumer preferences and market trends in general.
William Pregentelli’s interview with Edoardo Freddi for Gambero Rosso discusses hot and topical issues, such as the Italian wine exports to Russia, the market trends, consumer preferences and competition for Made in Italy products.
Below is the complete interview.
The good trade relations that have always existed between Italy and Russia have not cooled. Not even the conflict and European sanctions stop the import of our wines to Putin. We spoke about this with Edoardo Freddi, head of an important export company.
At this year’s Vinitaly, Russian buyers were not among the more than one thousand accredited operators from 68 countries. This fact does not seem to have weighed on wine exports to the former Soviet Union. ISTAT figures speak for themselves: in 2022 Italian wine in Russia grew by 16% in value (for a total of 172 million euro) compared to the previous year, which, it must be said, was marked by the aftermath of the pandemic. But then what of the trade apocalypse feared in the aftermath of the EU sanctions issued on 15 March last year? Perhaps too much ado about nothing, given that they only affect wines costing over €300. It goes without saying that a large, very large slice of our country’s wines remains outside the blockade, aimed mostly at the luxury purchases of tycoons and oligarchs.
Italian wine in Russia: emblazoned appellations solid, new areas on the rise
‘Business on the Russian market is going quite well,’ Edoardo Freddi, head of Edoardo Freddi International, a company that exports more than 33 million bottles a year to over 100 countries, confirms: ‘Despite the confusing and tense situation, things are going better than expected. There is a slight drop in volume but we are growing in value. What we are seeing is a very clear downward positioning. Part of the more affluent class, which used to consume premium wines, has probably moved out of the country; added to this is the fact that the purchasing power of the middle class has obviously decreased a little. The latest figures, in fact, speak of an inflation rate of around 7 per cent: ‘So fewer premium bottles, more mass-market wines’. He continues: ‘The reaction of sellers in Russia since February 2022 has been to focus on entry level wines; Super Tuscans, Brunello, Amarone and Barolo remain very popular with the Russians, but in the last few years, less expensive Italian wines such as Primitivo from Apulia, or even Pinot Grigio, Lambrusco, Asti, Prosecco, Chianti and Montepulciano are beginning to be discovered. Recently there has also been great enthusiasm for Vermentino, which is slowly replacing and taking the place of Lugana’. But what about the ethical plan? Is it right to continue doing business with a country that has unjustly invaded another? “We have questioned ourselves a lot in recent months on this aspect: are we doing the right thing? We came to the conclusion that in any case we are not selling dangerous products, to be used for war purposes, we are not selling weapons, nor components to produce them. Nor are we targeting the upper class or the elite. We are selling a product for the masses, for the people’.
A look at competition
So who has felt the consequences of these restrictions the most? Undoubtedly France, which has lost an important market share: there is even talk of as much as half, ‘also complicit in the Russian media attack on Champagne’. The risk for the Italian wine market, therefore, this time does not come from the enemy of all time, but from the products of the Former Soviet Republics: “Armenia, Georgia, Crimea itself are currently the main catchment area for the Russian market. To give an example: Aeroflot now only has wines from these territories’. Having a good commercial relationship with Russia, again in relation to wine, is Australia ‘which, losing China due to the duties imposed by the Chinese government in 2021, has poured its exports to Russia. Italy, however, remains the country experiencing the best situation’.
Russian normality, Ukrainian uncertainty
Edoardo’s last trip to Russia dates back to last February, for Prodexpo (an international trade fair dedicated to food and wine, ed.): ‘In Moscow, I found a strangely normal situation, restaurants full, bars as well, in fact everything was almost tidier, cleaner. Of course there was a lack of international tourism. Among the pavilions of the fair, Europeans and Americans were missing, a loss however levelled out by the many Asian presences, Chinese above all. We will return to Russia in July and expect a similar situation. There has been a rally in the rouble, which has gone up and down several times, very strange as a phenomenon, but beyond that we do not see much change’. The opposite is true for Ukraine: ‘The market has obviously collapsed, at least by 50 per cent, maybe even more; there are ups and downs, but you can’t plan much, it’s difficult to make plans. There are flashes, but then weeks of silence. In short, it’s not a good situation’.