Faced with the threat of shortage of raw materials for the production of wine due to the entry into force of the new branch of the law, one of the largest players in the market — GK “Abrau-Durso” — took the decision to purchase Krasnodar wineries “jubilee.” What difficulties can follow the expansion of vineyards, and output in the new category “b” told the President, “Abrau-Durso” Pavel Titov.— Do I understand correctly that the purchase of “Jubilee” due to the need to expand the vineyards after the adoption of the new branch of the law?— Absolutely. We attended this transaction, when the law on viticulture and winemaking was passed in late 2019. This is our method of solving the problem of shortage of local raw materials. We have no plans to significantly increase production volumes through the acquisition of “Jubilee” — the company will primarily raw material base, the location of production and processing of wine materials for the rest of the group. Through this transaction, and given that we already have, we will close 80% of the Russian wine materials, the remaining part is purchased from local farms.— Whether the impact of full transition to the Russian raw materials on the cost of the final product? — While it is difficult to say, because there are pros and cons. As I have long said, the cost of Russian wine is much higher than foreign companies, given the lack of state support. The volume of subsidies for planting of vineyards is just over RUB 1.5 billion for the entire industry. That was before enough, and now, under the new law, when to cover the deficit of Russian raw materials necessary to plant about 15 thousand hectares of vineyards per year for ten years, the program requires large-scale expansion. I know that the Ministry of agriculture are working on the relevant documents in addition to the new law and that they are taken must be before the end of the year. According to tsifrra, the production of sparkling wines in Russia during the last ten years has fallen by half, to 13 million litres per year, which is associated with a fall in consumption. Do you feel it?— In General, the market demonstrates a negative trend, while “Abrau-Durso” could continue to grow. In 2019 we released 43,3 million bottles — 11% more than the year before. In fact, consumer demand has not fallen, and has shifted into a lower price category. She, in turn, already called sparkling wine, and drink wine.— Due to what price range you are able to increase production? — We dominated in the segment from 350 to 550 rubles., which presents a primarily “Russian champagne”. At the same time to achieve the sales growth was possible particularly due to the devaluation of the ruble, causing the part of foreign competitors fell out of the price range in which we are located, click�� in the more expensive segment.— You have previously stated plans to enter into the category of strong alcohol, in particular launch production of cognac and liqueurs, “Seven vegetables”. At what stage these projects? The pandemic affected our plans, and the sale of cognac in the food retail was launched recently. As for the “Seven vegetables”, we released the first commercial batch, and now re-negotiating with retailers. It is assumed that the tincture will be in stores this month.Interview by Maria Kotova