Asti Spumante bubbles burst by war in Ukraine

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Castiglione Tinella (Italy) (AFP) – Its sweet bubbles have made Asti Spumante a favorite in Russia – but the war in Ukraine threatens to cripple Italian producers, with sales of millions of bottles now at risk.

The vineyards stretch as far as the eye can see under the Caudrina estate, nestled among the hills of the picturesque Langhe region.

The peaceful scene belies the stress gripping this family business, urgently looking for a new market for its wine.

And it’s not the only one. Italy is the top supplier of wine to Russia and Ukraine – far ahead of its French rival – and is already suffering the fallout.

The Russian invasion has hit us “hard”, said Marco Dogliotti, whose father owns the Castiglione Tinella vineyard near Turin in northern Italy.

“Since 2017, we have been exporting some 4,000 bottles a year to Ukraine, 80% of which are Asti Spumante, with a good turnover,” he told AFP.

“Unfortunately, this market, which was booming in 2021, is now totally lost.”

Two palettes of the popular sparkling wine were ready to go to Ukraine when Russia invaded its neighbor in late February.

Bottles of Asti Spumante are stacked in a storage warehouse in Castiglione Tinella in north-west Italy – but war in Ukraine means looking further afield for exports MARCO BERTORELLO AFP

“On the day of the invasion, our importers were calm, they didn’t imagine it would be a disaster. But the next day, they fled,” he said.

Founded in the 1940s by Dogliotti’s grandfather, the company exports almost 40% of its wine. In addition to spumante, it also produces muscat and barbera on its 25 hectares.

The Ukrainian conflict is now forcing Dogliotti, 39, to accelerate and broaden his search for new buyers, from Australia to Japan or Nigeria.

14 million bottles

Production of sweet Asti Spumante in Piedmont increased by 12% in 2021, with more than a quarter of the bottles exported to Russia and Ukraine.

“We hope the war will end as soon as possible,” Flavio Scagliola, vice-president of the Asti DOCG consortium, told AFP.

“The Russian, Ukrainian and Belarusian markets represent 14 million bottles a year,” he said.

The European Union in March banned the export of certain luxury goods to Russia, as part of sanctions against the country for the invasion.

Exporters' problems relate to payments with Russia largely excluded from the SWIFT banking network, the collapse of the ruble and transport difficulties
Exporters’ problems relate to payments with Russia largely excluded from the SWIFT banking network, the collapse of the ruble and transport difficulties MARCO BERTORELLO AFP

But while Asti Spumante has joined other wines and champagnes on the list, it’s largely unaffected – the average bottle costs five euros ($5.50) and the ban only affects those from a value greater than 300 euros.

“Very few Italian wines fall into this category, apart from grand crus like Super Tuscans, Brunello di Montalcino or Barolo from Piedmont, which are sold at very high prices,” said Denis Pantini, head of gastronomy. and wine at the Nomisma Observatory. .

For Asti Spumante, “the risk is not so much related to an export blockade, but rather to the problem of payments after the exclusion of Moscow from the SWIFT banking messaging network, the collapse of the ruble and the difficulties that have arisen in transport” , he told AFP.

But some Italian wine exporters manage to reach Russia via Belarus or Latvia, and using the few Russian banks that are not excluded from SWIFT, according to industry sources.

“Barolo Boys”

Problems with the supply of raw materials, already expensive and scarce after the pandemic, have also worsened since the outbreak of the war, in particular cardboard, glass and aluminium, of which Russia is the world’s third largest producer, and which used to make bottle caps.

“We were very close to stopping sales last week due to a lack of cardboard for packaging, but at the last minute our supplier was able to provide us with some,” says Giovanni Correggia, 29, who runs an organic wine producer in the Roero region, which borders the Langhe.

Giovanni Correggia's business has previously encountered problems with Russia, with its Moscow importer forced to close in 2018 due to money laundering allegations.
Giovanni Correggia’s business has previously encountered problems with Russia, with its Moscow importer forced to close in 2018 due to money laundering allegations. MARCO BERTORELLO AFP

His father, Matteo Correggia, was one of the “Barolo Boys” who in the 1980s and 1990s revolutionized the wines of the region and made them famous all over the world, starting with the United States.

The company, founded in 1985, has previously run into trouble with Russia, with its Moscow importer forced to close in 2018 due to money laundering allegations, leaving behind large unpaid bills.

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