Produced from thin air - the mystery of Russian wine

2023

Produced from thin air – the mystery of Russian wine

Entry type: Single project

Country/area: Spain

Publishing organisation: Meininger’s Wine Business International

Organisation size: Small

Publication date: 2022-01-10

Language: English

Authors: Sergei Panov, freelance journalist
Robert Joseph, Editor-in-chief

Biography:

Sergey Panov writes about the wine market for Meininger WBI and Russian investigation outlets Republic.ru and The Insider. The last two were recognized by the Russian authorities as foreign agents, and their websites were blocked in Russia.

Now Sergey is working on a series of materials about circumventing EU, U.S. and Australian sanctions on wine supplies to Russia. His most recent hobby is investigating wineries owned by corrupt Russian officials.

Project description:

This material is the first systematic analysis of counterfeit Russian wines and grape distillates.

Using official data from Russian regulators, it has been proved that the production of Russian wines and brandy exceeds available resources by 23-31% and is counterfeit.

The trend for fraudulent products is increasing: in 2019 23% of products were counterfeited, in 2021 – 31%, or almost a third of all Russian wines and brandy.

Impact reached:

For Meininger WBI, the article remained in the top five most-read stories for several months.

In Russia, the material’s methodology was used by [Republic](https://republic.ru/posts/103028), which continued to investigate the scale of counterfeiting. The problem was soon brought to the attention of one of Russia’s popular tabloids, [Argumenty i Fakty](https://spb.aif.ru/money/bumazhnyy_urozhay_kak_lenoblast_stala_glavnym_vinodelom_strany). Even the media, loyal to the Russian authorities, drew attention to the fact that a significant portion of the country’s yield is harvested only on paper.

The material caused a controversy among a new wave of Russian media outlets, the telegram channels that specialize in the alcohol market. The official Russian regulatory authorities did not react to the publication, not least because it showed huge inconsistencies between the data of different agencies.

Techniques/technologies used:

The main resource I used was a systematic approach to analyzing different types of data. Using a systematic approach and converting different metrics using a single unit of measurement allowed me to give an accurate estimate of the scale of the counterfeit wine problem.

The enormous scale of counterfeiting, accounting for almost a third of the market, is in the shadows because of the scrappy data provided by various ministries. The Ministry of Agriculture reports on the grape harvest, the regulator of the alcohol market on the production of wine in hectolitres, and the Customs Service on the imports of wine materials in tons, which are also used for wine production.

The main challenges of the project were two:
* To collect sparsely available data from the various agencies for the last three calendar years
* To bring different metrics to the same denominator. The analysis had to take into account how many liters of wine would be obtained from a ton of grapes, how many liters of cognac would be obtained by diluting a ton of cognac distillate with water, etc.

The innovation of this investigation was in choosing one unit of measurement, into which different indicators were converted. That unit was the hectolitre of wine. This choice brought the different metrics of weight and volume to the same denominator. Harvest in tons of grapes, hectoliters of must and bulk wine, distillation of cognacs and brandies – all these values can be directly or indirectly converted into hectoliters of wine. The data summarized in one table proved the existence of the problem and its scale.

Context about the project:

Just as a drop of water reveals an entire ocean, so the Russian wine industry reflects the criminal nature of modern Russian power.

Meininger’s subsequent investigation revealed that one of the main beneficiaries of the annexation of Crimea was Vladimir Putin’s closest friend Yuri Kovalchuk, who seized 5,950 hectares of Crimean vineyards – almost a third of the entire 20,800 under vine on the peninsula.

Already after Meininger’s publication on Russian wine counterfeiting, it became known that the largest producer of still wines in Russia was the Gatchinskiy Spirtzavod (Gatchina’s distillery). This company is located not far from the Estonian border, where even cucumbers have to be grown in greenhouses, and does not have a single hectare of vineyards. Its owner is the family of the head of the Russian Foreign Intelligence Service, Sergey Naryshkin.

And the key fact published by Republic that explains the strong position of counterfeit producers is that of Russia’s 20 largest wineries, 11 are connected to Kremlin’s cronies. In total, more than 30 wine producers in the country belong to Russian corrupt officials and criminals.

What can other journalists learn from this project?

A systematic approach can be useful to find the logic in the data from different areas. Thus, the use of a single denominator in the form of a hectoliter of wine helped to build a chain of relationships between different indicators. As a result, the unexpected was demonstrated: from year to year, 20-30% of Russian wine appears literally out of thin air.