Q&A with Shukhrat Khakimov on the wine market in Kazakhstan
By Cruz Liljegren
VINEX talks to Shukhrat Khakimov, the young managing director of Winexfood, the export company that creates Spanish wine brands for CIS countries. Today we turn the spotlight to the wine market in Kazakhstan, a train that is slowly picking up speed.
Introduction to the wine market in Kazakhstan
Wine in Kazakhstan is not a novelty, the Kazakhs has been enjoying it for at least 1300 years. It’s a nation that has consumed more or less depending on the historic period, but it has never developed a wine culture. Perhaps until now, as the demand is predicted to reach historic highs in 2018. An emerging younger generation is much preferring lighter alcoholic drinks such as wine, as opposed to spirits. Additionally the consumption of wine goes well with the culture of hospitality and friendliness that characterises the Kazakh people.
Wine shops has recently appeared in the cities of Almaty and Asana fuelling the new interest for wine, even among the muslim population. A Euromonitor country report from 2017 predict that the next big wine trend will be organic wine, something that will cater to a population that is increasingly concerned about the naturalness of their food and drink. Magazines are also writing more wine related articles than ever before, much widening the general knowledge of the population.
To satisfy this new demand, the domestic wine industry makes 236,000 hectolitres of wine every year, but it’s still far from enough. Only 20 percent, or one fifth, of the consumption can be satisfied by local production. The rest has to be imported from abroad. In comes Shukhrat Khakimov, in this exclusive VINEX interview held in December of 2017.
Who would you say is the typical Kazakhs wine drinker?
Young people, especially women. Wine is sort of viewed as a female drink, male are traditionally drinking spirits. Another interesting point is that even the muslim population drink alcohol in Kazakhstan. Of course, some are against it, but generally Kazakhstan is one of very few countries with a muslim majority that is wine friendly.
And how does your company Vinexfood fit into the picture?
We started like agents, then brokers and now we have our own brands. Because we speak Russian I have a huge benefit compared to other Spanish exporters. Kazakhstan is not our biggest market, but a very interesting one. We sell Spanish bottled wine directly to distributors, retailers and supermarkets. It's expensive to import wine, so clients are usually looking for lower priced products, but the fastest growing segment is actually more premium wines.
And why is it so expensive to import wine to Kazakhstan?
Because there is no harbours, all wine needs to come by truck or train. the result is that importers pay seven to ten times more than a Chinese importer would, for the same amount of wine.
Any other difficulties that come to mind?
A huge problem is that the same wines are sold in supermarkets and restaurants. This is the single most important factor why the horeca-sales are so low. People compare prices and therefore consider wine in restaurants to be over-priced.
This year, 2017, we have a serious global shortage and prices are going up across the board. In what way does this affect your business?
Our buyers in Kazakhstan don’t understand the problems we have had this season. They don’t accept a large price increase like for the 2017 vintage, just a small one. So at Vinexfood our margins are taking the hit, we assume the losses.
Future trends in the market?
Mid-range wines are increasing the most, not the lowest priced wines. It’s a sign that the market is maturing. Young males are starting to drink wine as well, their fathers and grand fathers most probably still prefer vodka. Another thing is that we have health issues related to sugar consumption, so more and more people are switching to dry wines.
Is there any exportation of wine in bulk from Kazakhstan?
This is not common, but it might happen some years. Not a big thing anyway.
What grape varieties are your clients in Kazakhstan importing and why?
For our clients in Kazakhstan two things matter, the country of origin, and international grapes. Cabernet Sauvignon, Sauvignon Blanc and similar, this is what the market asks for. And how about importation of bulk wine? Not really, it’s in Russia that the majority of the bulk wine is bottled. They recently made it cheeper to import bulk wine to Russia, compared to bottled wine. Wine bottled in Russia is subject to lower taxes. So the tax is more beneficial, and the transportation costs lower. Wines bottled in Russia will then find their way to Kazakhstan.