(Bloomberg) – Moet Hennessy has halted shipments of champagnes like Dom Perignon to Russia under new rules that now reserve the name for locally produced sparkling wines.
The decision affects other brands such as Ruinart, Moet & Chandon and Krug, and it will give the company time “to understand and study the new regulations and assess their consequences,” said a representative of the owner. French LVMH in an e-mail.
Russia now grants the exclusive right to use the term “Shampanskoe” – Russian for Champagne – to local sparkling wines. French champagne producers are notoriously protective of their name, and analysis of the new law is underway with others within the CIVC pressure group, according to the spokesperson.
“Champagne is outraged by the new Russian legislation on wine labeling,” the group said on July 5, three days after the new rules came into force.
Read more: Moet to label its champagne sparkling wine in Russia to comply with the law
French producers are still allowed to use the Latin characters of champagne on the main label. But these bottles must now also indicate “sparkling wine” in Cyrillic characters on the back.
The industry has asked the French and European authorities to work to amend the new legislation, according to the CIVC.
France’s Foreign Ministry has said it is reviewing Russian legislation, while the European Commission has said it is assessing whether the law violates Russia’s commitments to the World Trade Organization.
Russia ranks 15th in value markets for French champagne producers, according to CIVC data from last year. The market is worth around 35 million euros ($ 41 million), compared to more than half a billion euros for the United States, the largest export market.
Champagne producers restrict the use of the name in France, allowing it only for sparkling wines made in a limited area of the region. The name is protected in 120 countries, and Russian authorities have not informed the CIVC of the upcoming change, according to the group.
Pavel Titov, president of Black Sea winegrower Abrau-Durso PJSC, said the new rule is counterproductive and will not benefit Russian winegrowers. The products are targeting a very different market, according to a spokesperson for another Russian winery, Fanagoria Estate.
A bottle of Abrau-Durso sparkling white wine costs around 700 rubles ($ 9.50) in Russian supermarkets, compared to around 5,000 rubles for a bottle of Moët & Chandon.
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