Russian Alcohol Production Falls 3.1% in First Half of 2026

Total alcohol output in Russia for the first half of 2026 came to 519.3 million decaliters (dal), down 3.1% from the 535.6 million dal recorded over the same six months of 2025. Excluding beer and cider, production of spirits and low-alcohol beverages fell more sharply — by 6.8%, to 68.85 million dal — according to Federal Service for Alcohol and Tobacco Market Regulation data as of July 7, 2026.

The decline hit nearly every major category: vodka, beer, cognac, and both still and sparkling wine. Only a few niche segments posted growth — cider, mead, and fortified wine.

Spirits: what’s happening

Output of beverages above 9% ABV dropped 2.2%, to 45.8 million dal.

•  — Vodka: 30.1 million dal produced — 4% less than a year earlier.
•  — Cognac: production fell 6.6%, to 3.2 million dal.
•  — Liqueurs and spirit-based products: the only major spirits segment to grow — up 9.9%, to 8.85 million dal.

Beer market: the decline continues

The year-to-date decline in production is ongoing, though the pace has slowed by 0.2 percentage points — likely linked to the peak production and consumption season. Beer output over the first six months of 2026 totaled 385.1 million dal, down 2.3%; through May the decline stood at 2.5% (309.5 million dal) year-on-year. Production of beer-based drinks fell more steeply — down 4.4%, to 58 million dal over the same six-month period. Combined output of fermented beverages (beer plus beer-based drinks) declined 2.4%, to 450.5 million dal.

Beer above 8.6% ABV kept falling in the first half, down 17.6% to 32.8 thousand dal, following a 13.4% decline (to 28.7 thousand dal) recorded through January–May 2026.

Low-alcohol products suffered the sharpest collapse — down 36.8%, to 458.5 thousand dal over six months. In May 2026 alone, production had fallen to 366.3 thousand dal (-38.9%).

Brewer’s response

Facing falling retail sales, brewing companies are scaling back production plans. Beer output fell 2.5% and beer-based drinks 5.7% from January through May; from January through June, the declines were 2.3% and 4.4% respectively.

Statbeer analysts forecast a 5.6% drop in production for full-year 2026, to 850 million dal (748 million dal of beer and 102 million dal of beer-based drinks).

Against this backdrop, a few segments stand out for growth: cider production rose 11.4%, to 5,174.6 thousand dal, and mead grew 7.2%, to 2,043.6 thousand dal — a sign that demand may be gradually shifting toward lighter, niche beverages. However, these categories still account for only 0.5–1.1% of total fermented-beverage output.

Retail sales of beer and beer-based drinks

Over the first five months of 2026, retail beer sales fell 1.9% (234,871.0 thousand dal), while sales of beer-based drinks dropped 3.7% (35,647.7 thousand dal).

The key drag on demand is price. The average retail price of beer rose to 215 rubles per liter (+4.7% since the start of the year), directly weighing on consumption.

Shifts in distribution channels

Retail infrastructure is shrinking noticeably: the number of alcohol stores in Russia’s million-plus cities fell 19% — from 25,837 to 21,000 outlets between May 2023 and May 2026. These stores still account for 41.5% of beer sales by volume, according to the “Chestny Znak” (“Honest Sign”) tracking system.

Regional restrictions add another headwind. In Moscow Region, the largest market by sales volume, restrictions on food-service venues took effect March 1, 2026, closing up to 30% of establishments — mostly so-called “nalivaiki” (small drink-to-go bars).

Why production is falling: industry views

Experts point to rising costs and tax burden as the main driver of the decline. Raw materials, glass bottles, packaging, transportation, and credit have all become more expensive.

Taxes. According to the Federal Tax Service, food production ranks among the industries with the highest tax burden, which reached 18% (+0.7 percentage points year-on-year). Industry participants note that excise duties and VAT make up roughly a third of production costs.

Regulation. Additional pressure comes from the administrative burden tied to labeling, tracking, and write-offs under the “Honest Sign” and EGAIS control systems.

Market overview

Russia’s alcohol market showed mixed but overall negative dynamics in the first half of 2026: major traditional segments — vodka, beer, cognac, still and sparkling wine — lost volume under the weight of rising costs, a heavier tax burden, and tighter regional regulation. Growth points remained limited to niche categories — cider, mead, and fortified wine — along with liqueurs and spirit-based products. On the demand side, price is the key constraint: rising retail prices, combined with a shrinking retail network, continue to weigh on consumption.

Report in PDF format from the Federal Service for Alcohol and Tobacco Market Regulation