According to Russia’s Federal Service for Alcohol Market Regulation, liquor production saw a significant decrease of 16% in the first half of 2025, a surprising trend given that Russians are reportedly consuming more alcohol than they did in 2024.

Traditionally, vodka is an integral part of Russian culture, used in various social occasions from weddings to funerals. The historical roots of this iconic beverage trace back to its name, derived from the Russian word voda, meaning water.

Despite vodka’s cultural significance, the country is producing less of it. The production fell to 31.38 million decaliters in 2025 from 33.40 million decaliters in 2024. Interestingly, there has been an uptick in consumption of other spirits, including rum, whiskey, brandy, and tequila.

Multiple factors contribute to this decline in vodka production. Rising alcohol prices and the ban on Russian alcohol exports to the EU and the US, especially following the Ukraine war, have severely impacted revenues for vodka manufacturers. A report indicated that vodka exports were merely worth $34.6 million in 2024, a stark drop from $168.3 million in 2021.

The increase in minimum pricing for vodka, with the cost of a half-litre bottle going up from $2.99 to $3.49, further exacerbates the issue. Kazakhstan remains the primary market for Russian vodka, accounting for more than 92% of its imports, while China accounts for a mere $1.5 million.

Despite expectations for sales increases in markets like China and Turkey, the trajectory has not met the predictions as vodka faces tougher competition, including from Polish spirit exports now leading the market.

In summary, while Russians are drinking more, the combination of geopolitical issues, market dynamics, and rising prices is leading to a curious paradox in the vodka industry: less production amid higher consumption.