Russian brewers are tapping the local market for hops as foreign supplies dry up

MOSCOW, Sept 13 (Reuters) – Sanctions against Russia have disrupted local beer brewers’ supplies of hops and equipment, forcing them to seek domestic alternatives as they strive to keep their range of beers afloat, three breweries told Reuters.

Supply chain disruptions, sanctions over Moscow’s actions in Ukraine and some Western firms choosing to halt supplies to Russia have combined to reduce brewers’ access to American and European hops, but as foreign competitors exit the market, some Russian firms see an opportunity.

Sergei Baranov, head of Russian brewery Khmelyoff said they have been using German hops for 15 years, but this year tried hops from Russia’s Chuvash Republic, a region about 585 km (365 miles) east of Moscow.

“In principle, we are satisfied with the quality,” Baranov said, adding that they would order more.

He said logistics and payment problems meant Khmelyoff could not pay his partners in Germany directly, although shipments of hops have not been sanctioned.

Russia, which imports the vast majority of its hops from e.g. The United States, Germany and the Czech Republic do not produce a wide enough range of their own hops to brew more sophisticated types of beer, Vyacheslav Vetelev, founder of LaBEERint Brewery, told Reuters.

“We cannot brew the same types of beer that our consumers are already used to, only Chuvash hops,” says Vetelev, who has used hops from the US, England, Germany, New Zealand and Australia.

Vetelev, who described Russian entrepreneurs as “iron men” given the near-annual challenges they face, said Russia needed to develop the hop varieties it produces.

“This will take years, it won’t happen overnight.”

SILVER FOOT

As craft breweries struggle to adapt, some larger players see opportunities in tandem with market transitions, such as Afanasy, a large brewery located in Tver, about 160 km (100 miles) northwest of Moscow.

“Now our direct competitors have left and there is more shelf space for us, and consumers are already turning their attention to our product,” said General Director Vadim Deshyovkin.

Foreign brewers Carlsberg ( CARLb.CO ) and Heineken ( HEIN.AS ) have stopped producing their flagship brands in Russia, while Anheuser-Busch InBev ( ABI.BR ) is seeking to exit a joint venture in Russia with Turkey’s Anadolu Efes. Read more

Deshyovkin acknowledged that Afanasy is currently facing difficulties, but is building new supply chains, seeking new partners, and its Tver plant is running at close to full capacity, producing nearly 10 million decaliters a year.

“I am sure we will overcome (the difficulties) in the coming year,” Deshyovkin said. “We will adjust our business processes to supply missing components or raw materials and then emerge from this current crisis successfully.”

According to the federal statistics service Rosstat, Russia produced 410 million decaliters of beer in January-June 2022, an increase of 2.7% year-on-year.

Reporting by Reuters, writing by Alexander Marrow, editing by Alexandra Hudson

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