The Ministry of Agriculture refused to finance hop cultivation for brewers

RBC learned about the PPP project documents and received a comment from the Ministry of Agriculture: the largest beer producers are invited to “directly participate in financing the planting of hop fields for the needs of their production programs” and not depend of government initiatives.

The authorities are aware that 95% of hops used in beer production are imported from abroad, but APP participants (including AB InBev Efes, Baltika, Heineken, etc.) are provided with all the necessary tools and opportunities to increase their production volumes. In Russia.

The brewers do not agree with this: they claim that the equipment necessary for the development of hop cultivation is “practically completely” lacking. In the country there are no high-quality places for growing hops. All this causes trade losses: the volume of imports compared to 2022 increased by almost 10% in physical terms (up to 4.4 thousand tons) and 7.2% in monetary terms (up to 60.7 million dollars).

Modern hop production capacities in Russia amount to only 218 tons on 328 hectares, which is no more than 4.7% of the total market demand (at least 4.6 thousand tons per year). In this context, brewers believe that the industry needs:

• create laboratories, queen cells and nurseries to grow appropriate seedlings,
• create a list of regions with suitable agro-climatic conditions for growing hops,
• Compile a record of the farm machinery needed and, if possible, purchase it or compile a list of companies where it can or will be manufactured.

All these points are described in detail in the PPP and NIFI project of the Ministry of Finance on the development of hop cultivation in Russia in 2024-2030. in the areas of production, processing and supply of raw materials to brewing companies.

The subsidies would allow market players to increase the area of ​​hop fields to 3.2 thousand hectares (almost 10 times) by 2030 and the harvest to 3.8 thousand tons (18 times), reducing imports between 40% and 45%. Previously, the Union of Russian Brewers approached the Ministry of Agriculture with a similar program, but the department did not support their calculations (they were somewhat different, but essentially close).

Motivating the refusal, the Ministry of Agriculture highlighted that the area of ​​hop fields is already growing (in 2023 they are one and a half times more than in 2022), and the trend will continue, since investment projects are being implemented in the Territory of Krasnodar, Lipetsk region, Chuvash Republic and other regions.

The country already has preferential loans for hop growers, there are formats of state support for companies dealing with perennial plantations, so you can cope on your own.

For domestic brewers, this means that import substitution of hops is postponed for at least 10 years, as an “apolitical product” (quote from Vadim Drobiz, director of the Research Center for Federal and Regional Alcohol Markets), unlike wine, whose production was supported by the state.

As a result, entrepreneurs will have to choose: recalculate the financial models of companies, taking into account the expensive logistics of foreign hops, or receive loans for the independent development of hop cultivation without government support and without a guarantee of business survival.