Russian brewers were left without hops

They ask the government to recreate the hop-growing that was destroyed under Putin.
08.04.2022
Origin source
Fearing interruptions in hop imports due to the worsening geopolitical situation, Russian brewers are asking the Ministry of Agriculture to develop a support program for hop producers. Now local brewers buy 7-7.5 thousand tons of hops per year, mainly from Germany, the Czech Republic and the USA, while Russian raw materials account for only 2%. Market participants propose to take the necessary funds from the excise tax on beer. It will take years to develop the raw material base, and a serious shortage of hops may occur in the summer, brewers fear.

Kommersant has read a letter from Daniil Briman, Chairman of the Council of the Union of Russian Brewers, to the head of the Ministry of Agriculture, Dmitry Patrushev, with a request to develop a state support program for hop producers. This should make it possible to reduce the dependence of the brewing industry on imported raw materials. As stated in the appeal, Russian beer producers use about 7-7.5 thousand tons of hops per year, of which only 2% is locally produced, the rest is supplied from Germany, the Czech Republic and the USA.

At the end of March 2022, most large and medium-sized brewing companies are provided with hops for several months. But in the event of a prolonged lack of supplies, many manufacturers will begin to experience serious problems, the appeal notes.

According to the estimates of the Association of Hop Growers of Russia, an increase in hop production in the Russian Federation to 1 thousand tons by 2030 will require more than 500 million rubles. annual subsidies for three to five years.

They believe that it is required to plant at least 50 hectares with promising varieties of hops per year and compensate investors for 70% of actual costs. As Mr. Briman writes, hops are a highly profitable and sought-after crop, the purchase of which brewers in the Russian Federation spend $60–65 million a year, so the government’s costs will pay off.

A share of the excise tax on beer production can be used to support hop growing, Daniil Briman believes. In 2020, market participants paid more than 172 billion rubles. excises, reported the Association of Beer Producers (APP). As Mr. Briman points out, with sufficient support, up to 80% of the most common varieties of hops consumed by brewers can be grown in the country. Russian hops also typically cost 20% to 40% less than imported ones, he adds. Against the backdrop of increased demand, continues Mr. Briman, due to the fear of interruptions in supplies, prices equalized, and all local products were bought out.

Acting President of AB InBev Efes (BUD, Stella Artois, Corona Extra) Oraz Durdiyev recalls that many of the hop varieties used in beer production are patented by private companies, so it will be problematic to replace them.

But the import of others may well be replaced in the future from five years due to proper state support, he points out. Heineken Corporate Relations Director (Krusovice, Amstel, Okhota, Three Bears) in Russia Aleksey Vorobyov warns that it will take years from the moment of investment to reach the required volumes, quality and required variety of hop varieties from the moment of investment, as well as appropriate knowledge and technology cultivation. According to him, in the current conditions, in order to support the industry, which cannot work without hops, it is necessary to cancel the import duty on this raw material and ensure logistics.

Aleksey Nebolsin, head of the commission for the production of brewing products of Opora Rossii, agrees that it is necessary to develop our own hop production, but emphasizes that this is a lengthy process, and some brewers may face a shortage of raw materials this summer, during the high season. According to him, urgent measures are also needed to prevent shutdowns of enterprises. The APP believes that for the development of hop growing, it is necessary to simplify the procedure for registering varieties and conditions for the import of imported hop seedlings into the Russian Federation, as well as a program for the development of special equipment.

The Ministry of Agriculture told Kommersant that the appeal of the Union of Russian Brewers would be considered. They added that hop producers can already receive reimbursement of part of the costs of planting and caring for plantings, as well as attract preferential short-term and investment loan.

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