Latvia and Lithuania are accused of acting as middlemen between Western producers of booze and Russia.
Latvia was the biggest exporter of whiskey to Russia in 2023, according to data published by the Russian state-owned news agency Ria Novosti.
That’s despite high tensions between the two countries following Moscow’s full-scale invasion of Ukraine and Western sanctions.
Ria Novosti wrote that Russia imported almost €244 million worth of whiskey between January and September 2023, almost four times more than in the same period the year before.
Most of it came from neighbouring Latvia, which Ria Novosti said shipped products worth €177.4 million, followed by Baltic neighbour, Lithuania with €26.9 million.
Latvia’s exports to Russia were worth more than €1.1 billion in 2023, according to data from the country’s government cited by German news agency DW. More than half of all of Latvian exports to Russia were drinks, spirits and vinegar.
The Baltic state exported more wine (€73 million) than even Italy (€68 million), a much bigger producer than Latvia, to Russia last year.
Middleman for Western companies
Latvia, according to local experts, is acting as a go-between in a process that involves Western companies unwilling to show they’re still selling their products to Russia amid the deadly war in Ukraine.
Matiss Mirosnikovs, an economist at the Bank of Latvia, told Euronews that while the country has long been a middleman for Western companies, it saw the number of re-exports of Western goods ramp up after Moscow’s 2022 invasion of Ukraine.
“If we look at where these goods are manufactured, what type of alcoholic drinks they are, we mostly see that those are of foreign origin, they’re not produced locally here,” he told Euronews.
“What I think is happening is that Western companies are trying to kind of shift attention away from their role as sellers [to Russia] and blame other distributors, while the names of the larger parent companies don’t show up in these trades, it doesn’t show that they’re directly linked with Russia,” Mirosnikovs suggested.
“We’re not to be blamed,” he added. “We’re on the border and you’ll have some Western exporters who are using this opportunity.” Latvia’s exports are not in violation of sanctions imposed against Russia for the invasion of Ukraine on February 24, 2022.
Davis Vitols, Managing Director of the Latvian Alcohol Industry Association (LANA), agreed.
“Before Russia started the war in Ukraine, Latvia was one of the main hubs, if not the main hub, for many big alcohol companies’ reexports to Russia, Belarus, Ukraine and Kazakhstan,” Vitols told Euronews.
“According to the EU sanctions, alcohol exports to Russia and Belarus are still allowed, except bottles that cost more than €300, so, because Latvia does not produce whisky, these are reexported from other countries, where in Latvia, these bottles are being stamped according to exporting country laws,” he added.
Russian sources agreed with Latvian experts.
“If previously, according to documents, imports went to Russia simply in transit through Latvia or Lithuania, now the final point is the Baltic States, and from there the delivery goes to the Russian Federation,” Veniamin Grabar, President of Russia’s alcohol company Ladoga, told Ria Novosti.
“The logistics chain has not changed, it has changed a little paperwork. The reason is that often foreign suppliers do not want to take risks and indicate Russia as the final delivery point.”
Mirosnikov told Euronewss the proportion of exports to Russia has actually dropped “dramatically” since 2014.
ADVERTISEMENTTen years ago Russia was Latvia’s second largest export partner, taking 14 per cent of total goods exported, now it’s lower than 6 per cent.
“It’s still quite high, but its role has diminished over the years,” he continued.