Latvia and Lithuania are accused of serving as intermediaries between Western producers of alcoholic beverages and Russia.
Latvia was the largest exporter of whiskey to Russia in 2023according to data published by the Russian public news agency Ria Novosti, despite high tensions between the two countries following the invasion of Ukraine and Western sanctions imposed on Moscow.
Ria Novosti writing that Russia imported nearly 244 million euros worth of whiskey between January and September 2023almost four times more than during the same period in 2022.
Most of these imports came from neighboring Latvia, which, according to the news agency, shipped products worth a total of 177.4 million euros, 6 times more than the second largest whiskey supplier to Russia, Lithuania, with 26.9 million euros.
Latvia’s exports to Russia were worth more than 1.1 billion euros in 2023, according to country government data cited by theGerman news agency DW. Beverages, spirits and vinegar made up more than half of these exports.
Last year, the Baltic state exported more wine to Russia (73 million euros) than Italy (68 million euros)which nevertheless produces much more than Latvia.
An intermediary for Western companies
According to local experts, Latvia acts as an intermediary for Western companies that do not want to show that they still sell their products to Russia, in the context of the deadly war raging in Ukraine.
Matiss Mirosnikovs, an economist at the Bank of Latvia, tells Euronews that while the country has long been a conduit for Western companies, it has seen the number of re-exports of Western goods increase after Moscow’s invasion of Ukraine in 2022 .
“If we look at where these goods are made, what type of alcoholic beverages they are, we see that most of them are of foreign origin, they are not produced locally here“, he adds.
“I think what’s happening is that Western companies are trying to distract from their role as sellers (to Russia). The names of major parent companies do not appear in these exchanges, allowing them to hide their ties to Russia“, suggests Matiss Mirosnikovs.
“We are not to blame“, he says. “We have a border position and some Western exporters are taking advantage of this opportunity. Latvia’s exports do not violate sanctions imposed on Russia for the invasion of Ukraine on February 24, 2022“.
Davis Vitols, general director of the Latvian Alcohol Industry Association (LANA), agrees.
“Before Russia launched the invasion of Ukraine, Latvia was already one of the main, if not the main, hubs for re-exports of many large alcohol companies to Russia, Belarus, Ukraine and Kazakhstan“, Davis Vitols told Euronews.
“Under EU sanctions, alcohol exports to Russia and Belarus are still allowed, except for bottles that cost more than €300. As Latvia does not produce whiskey, these bottles are re-exported from other countries, and in Latvia they are stamped according to the laws of the exporting country“, he explains.
Russian sources confirm the version of Latvian experts.
“If previously imports went to Russia simply passing through Latvia or Lithuania, deliveries are now destined for the Baltic States; they are the ones who then re-ship to the Russian Federation“, Veniamin Grabar, president of the Russian alcohol company Ladoga, explains to Ria Novosti.
“The supply chain has not really changed, only the administrative formalities are different. The reason is that, often, foreign suppliers do not want to take risks by indicating Russia as the final delivery point“.
Matiss Mirosnikov told Euronews that the proportion of exports to Russia had actually fallen.spectacularly” since 2014.
Ten years ago, Russia was Latvia’s second largest export partner, accounting for 14% of total exported goods, while today the figure is less than 6%.
ADVERTISEMENT“It’s still quite high, but its role has diminished over the years“, he concludes.
