Russia’s Liquor Industry Declines as Vodka Production Drops, but Alcohol Consumption Rises

Russia’s liquor industry is facing a significant downturn, with vodka production falling by 10.9% in the first half of 2025 compared to the same period in 2024, according to Russia’s Federal Service for Alcohol and Tobacco Market Regulation. The total output of alcoholic beverages dropped by 16.1%, reaching 73.9 million decaliters. Despite this decline, Russians are consuming more hard liquor than they have in the past eight years, with a growing preference for rum, whiskey, brandy, and tequila over traditional vodka.

Official data shows vodka production decreased from 33.4 million decaliters in 2024 to 31.38 million decaliters in 2025. This drop is linked to several factors, including a 17% increase in minimum retail prices for strong alcohol and higher excise taxes introduced in January 2025. For example, the excise tax on vodka rose by 16.7% to 698 rubles per liter, while brandy and cognac taxes increased by 17.12% and 17.09%, respectively. Additionally, Western sanctions and higher import duties on alcohol from “unfriendly” countries—now set at 20% of customs value or €3 per liter—have impacted the industry, making imported spirits pricier.

Despite the production slump, alcohol consumption in Russia is at an eight-year high, with per capita consumption of hard liquor reaching 8.5 liters in 2024, up by more than one liter compared to pre-2022 levels. Vodka still accounts for the majority at 5.3 liters per person, but sales of rum, whiskey, brandy, and tequila have surged by 10.2%, according to Finexpertisa, a Russian financial auditing firm. Rum sales, in particular, grew by 17.5% in the first quarter of 2025, driven by affordable brands that compete closely with vodka’s price point. Whiskey and gin also saw gains, with sales up by 8.2% and 10.2%, respectively.

Industry experts point to changing consumer tastes and economic pressures as key drivers. Veniamin Grabar, president of Russian distillers Ladoga, noted that while vodka and brandy sales are declining, “bar categories” like whiskey, rum, and gin are gaining popularity as Russians mix them with tonic, juice, or soda. The rise of Russian-made whiskey, which claimed a 51% market share in 2024, has also reduced reliance on imported brands, though premium imported whiskies remain popular through parallel imports.

Economic challenges, including inflation over 10% and a slowing economy, are adding strain to the liquor industry. Russia’s Central Bank and Economy Minister Maxim Reshetnikov have warned of a potential recession, which could further impact production and sales. However, the growing demand for diverse spirits suggests Russians are adapting to these challenges by exploring new drinking preferences.

The shift away from vodka, a cultural staple once used as currency in the 1990s, marks a notable change in Russia’s alcohol market. As the industry navigates higher costs and geopolitical tensions, the rise of rum, whiskey, brandy, and tequila highlights a new chapter in Russian drinking culture.