Food & Beverage

Sobering: China and Russia weigh on global alcohol sales

Luke Graham, special to CNBC

Sales growth in the global alcoholic drinks industry remained sluggish for the second year in a row in 2014, hit by slowing growth in China and a downturn in Russia, according to data released on Tuesday by Euromonitor International.

Total volume of sales across the world grew by just 0.8 percent to 252 billion liters in 2014. Sales have been held back by falling demand from emerging markets, specifically China and Russia.

Bottles of United Spirits. McDowell Signature, clockwise from top, Royal Challenge, and Antiquity whiskeys are displayed on the shelves of a liquor store.
Sanjit Das | Bloomberg | Getty Images

In China, sales grew 1.2 percent—among the lowest growth posted since the 1990s, according to Euromonitor. This comes as the world's second-biggest economy continues to slow, growing by only 7 percent in the first three months of 2015.

And despite Russians' reputation as enthusiastic spirit drinkers, alcohol sales in the country declined by a steep 6 percent in 2014. Euromonitor suggested that "on-going macro and geopolitical stress" were to blame.

"The seemingly unstoppable emerging market engine is beginning to stall," said Spiros Malandrakis, senior alcoholic drinks analyst at Euromonitor International in a research note.

"Geographic diversification—or lack thereof—remains one of the defining factors determining top line success or failure."

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Under President Vladimir Putin, the Russian economy has been hit by falling oil prices, a declining ruble and sanctions imposed by the West for Moscow's incursion in the Ukrainian region of Crimea. The International Monetary Fund sees the Russian economy shrinking by 3.8 percent in 2015.

However, North American alcohol sales growth accelerated to 1 percent, up from 0.3 percent in 2013.

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