The accumulation of cargo on the Latvian-Russian border threatens the supply of alcoholic beverages to Russia. Due to the growth of cargo traffic, lack of personnel and technical difficulties on the neighboring side, the transit time for shipments has increased to eight to ten days, and delivery rates exceed pre-New Year levels. Alcohol networks do not rule out interruptions in individual positions. But in general, there are sufficient stocks in warehouses in Russia, experts say.
Delays in the passage of goods at the Latvian-Russian border complicated the import of alcoholic beverages, market participants told Kommersant. Alexander Lipilin, executive director of the wine trading company Fort, says that queues of trucks have accumulated on both sides, the transit time for batches has increased from three to four to eight to ten days. As one of Kommersant’s sources notes, alcohol is not a perishable product and does not enjoy priority, and by March 8, deliveries of flowers are growing, the shelf life of which is limited.
The founder and president of Simple Maxim Kashirin recalls that the problem arose back in November 2021 when one of the border crossings between Belarus and Poland was closed. According to Kommersant’s sources, this led to the redirection of part of the cargo flow to the Baltic states. But by February 2022, the situation worsened, including due to malfunctions in the software of the customs of Lithuania and Latvia, Mr. Kashirin continues. Queues are leading to transport shortages and “unprecedented” increases in logistics costs, he said. Alexander Lipilin says that ordering a Riga-Moscow car has risen in price by about 50%, and in some cases – by 100% of the usual rate. According to a Kommersant source, tariffs sometimes exceed the pre-New Year level.
A significant part of logistics centers is concentrated in the Baltic States, through which imported alcohol is supplied to Russia. One of the largest local operators – Girteka Logistics – previously also announced a temporary reduction in the number of employees due to COVID-19, which affected the decrease in the rate of pasting wine batches with excise stamps and labels by about 30%, WineRetail reported.
The Federal Customs Service (FCS) confirmed that Latvia has reduced the rhythm of receiving and submitting vehicles of international transportation. According to the information of the neighboring party, the software is being updated at the Latvian checkpoints and there is a lack of officials due to the spread of COVID-19, the FCS representative added. According to him, the working shifts of employees of the customs posts of the Pskov customs have been strengthened.
Ruslan Solovyov, commercial director of the Degrees of the World network, says that the slowdown in supplies has not yet led to a shortage of alcohol in warehouses, but the persistence of the situation threatens with the temporary disposal of certain items on the shelves. According to Maxim Kashirin, Simple’s consolidation warehouses are located in various parts of Europe, which helps to minimize negative consequences. Simple does not plan to revise prices anytime soon and hopes delivery times and rates will stabilize within a few months, he added. The Luding Group also says it has sufficient stock and safety stock to ensure uninterrupted supply. Both Lenta and Auchan said they had not received notice of possible delays and were not experiencing any difficulties.
According to the results of January-November 2021, the import of strong drinks increased by 19.73%, to 8.2 million decaliters, while the supply of still wines for the whole of 2021 increased by 6.6%, to 30.08 million decaliters. Alexander Stavtsev, head of the WineRetail information center, says that the remains of imported wine in warehouses and stores amount to tens of millions of bottles, and small chains that import themselves but do not have stocks can face difficulties.
It’s not just alcohol companies that are facing problems. PepsiCo says orders to transport food ingredients from Europe are being accepted at two to three times the base rate. According to a Kommersant source in the market, the situation only increases pressure on food inflation. Olga Fedotkina, executive director of the National Union of Transport and Logistics Experts (NEL), says carriers have suggested to Russian regulators that they set up a “green corridor” for empty trucks to enter the country to alleviate the situation at the border and solve the problem of lack of transport, but so far solutions for question is not accepted.