As Georgian wine continues on the path towards what looks like its return to the Russian market, Armenian wine producers are expressing concern that Georgia's gain may come at their expense. Reports the Arminfo website:
Return of Georgian wines to the Russian market following embargo suspension may cut growth of export of Armenian wines to Russia, Avag Haroutiunyan, Head of the Union of Armenian Winemakers, told ArmInfo.
A threefold growth of export of Armenian wines to Russia was planned for the coming five years. Wine export from Armenia grew 60% in 2012 to 1.185 million liters versus 744,000 liters in 2011, with nearly 75% of sales being in Russia. A few years ago, export totaled 500,000 liters, Haroutiunyan said. Before the embargo on Georgian wines in Russia, 50-55 million bottles of Georgian wine were sold in that country annually, despite the fact that the production capacity of Georgian wineries is some 15-20 million bottles. This shows that counterfeit production was manufactured either in Georgia or in
Russia. Georgian wineries have raised significant investments in modernization over the last years and have greatly improved the quality of wines.
"Now, they will offer the best products in the Russia market. Georgian wines are now of higher quality than the Armenian ones, but the prices will be similar. Armenia will have to raise additional investments in modernization of wineries to sustain competition," Haroutiunyan said.
As recently noted on Eurasianet, Georgian wines are slowly returning to the Russian market, after a seven-year ban. What this all means for the Georgian wine industry is still unclear and is one of the issues discussed in an interesting recent piece produced by Al Jazeera English, which took a good look at how the Georgian wine has fared over the last seven years. The video can be viewed below:
After six years of living with an onerous embargo, will Russian consumers soon be able to again get their fix of Borjomi mineral water and sweet Khvanchkara wine from Georgia? Statements coming out from both Moscow and Tbilisi make it sound like that could be the case.
"Russia and Georgia are ready to solve practically the issue of returning Georgian wine into the Russian market. The supply of Georgian wine into Russia was banned in 2006", Andrey Denisov, Russia's First Deputy Minister of Foreign Affairs, was quoted as saying earlier this week.
“We are talking about the restoring the position of Georgian winemaking in our market. At least the both sides are ready to solve the issue.”
Meanwhile, according to the state-run Voice of Russia website, Georgia's Minister of Agriculture, David Kirvalidze, yesterday said his country is ready to negotiate with Moscow in order to enable Georgian wine and mineral water to return to Russian supermarket shelves.
Reporting on these developments, the Independent suggests that what is likely helping along this wine detente between Moscow and Tbilisi are the results of last month's Georgian Parliamentary elections:
In Georgian parliamentary elections last month, the party of pro-Western President Mikheil Saakashvili was defeated by a coalition led by Bizdina Ivanishvili, a zebra-keeping billionaire who made his fortune in Russia and has promised to improve relations between the two countries. One of the first steps could be the return of the wine trade.
The indispensable Hvino News website has just released a superb resource for anyone who wants to learn more about the rapidly improving Georgian wine scene, a detailed "appellations" map for Georgia's wine-growing regions. Mapping out eighteen distinct regions, from Akhasheni to Vazisubani, the map also provides detailed notes on each region's geographical characteristics and descriptions of the types of grapes grown there. Curious to know more about the Goruli Mtsvane white wine grown in the Ateni region near Gori? Check out Hvino's map, here.
At this point, it's widely accepted that the 2006 embargo imposed by Russia on the import of Georgian wine ended up being a good thing for Georgia's wine industry. Previously dependent on a Russian market that favored low-quality, semi-sweet wine, Georgian wine makers have been forced to improve the quality of their product as they tried to break into other markets, especially in Europe and the United States.
In a very informative blog post on the website of the Wine Spectator, the publication's associate editor, Robert Taylor, takes a look at how the Georgian wine industry has evolved since the embargo and what its future might look like if the Russian market opens up to it again. From his post:
After independence, despite privatization, Georgian wine did not become better since, like many other industries, it suffered from disorientation, insufficient financing and a lack of regulation, Kaffka said. Russia's declaration of a sanitary embargo "was not completely groundless," he noted. "In the huge flow of what was marketed as 'Georgian wine' in the 1990s, surely there was a large amount of low quality and plain fake product."
But the 2006 embargo forced the Republic's wine industry to improve quality and seek out new markets, competing with—and hoping to join—the world's fine wine regions. Up to that point, more than 90 percent of its wine production had gone to Russia.
Perhaps not surprisingly, it didn't take long for the the European Union's decision to grant Georgia the exclusive right to market its wine bottles with the slogan "Georgia - The Cradle of Wine" to create some controversy in the Caucasus.
As the Hvino News website, which covers the Georgian wine scene, reports, the Union of Winemakers of Armenia is looking into how it might appeal Brussels' decision. From Hvino's report:
As noted by the Chairman of Union Mr. Avag Harutyunyan, not only Georgia can claim the status of "the cradle of wine", but also other countries in the region, primarily Armenia.
Armenian archeologists agree that in Georgia there are facts which prove the antiquity of the local wine. But for the moment the wine-making complex in Areni is considered the world's oldest, discovered during excavations "Areni-1" in 2011. According to the Director of Academic Institute of Archeology and Ethnography Mr. Pavel Avetisyan, both Georgia and Armenia can be considered the cradle of wine, as well as Iran, and even part of Azerbaijan, in view of the fact that the relevant archaeological materials have been found in all these countries.
This would not be the first time wine is dragged into the region's rivalries. In late June, Azeri hackers took over the website of an Armenian wine company in order to score some political points. More on that in this previous post.
The title of being the birthplace of wine is a contested one, with Georgia, Armenia, Turkey and even Azerbaijan all vying for it. But now Georgia can at least claim that it is officially the "cradle of wine."
As the all-things-Georgian-wine blog Hvino News reports, the European Union has just awarded Georgia the exclusive right to sell wine within its territory with the tagline "Georgia - the Cradle of Wine." From Hvino's dispatch:
According to "Sakstat" (Georgia's statistical institution), until 2011 this brand has belonged to a British company. The new registration allows Georgia to ban any other company using the name without permission. Use of the brand "Cradle of Wine" is supposed to help promote Georgia as the oldest wine-producing country.
But even before Georgians had a chance to raise a celebratory glass, the Financial Times weighed in on the question of Tbilisi's plan to label every bottle of wine with the now exclusive slogan, calling the victory in Brussels a "mixed blessing":
Emphasising its rich heritage is the obvious way for Georgian wine to make its mark in a highly competitive global market. But some consumers may more readily associate cradles with babies or bottle racks than the history of the Alazani Valley.
Perhaps aware of Hillary Clinton's fondness for cutting loose with a bottle of brew in hand, Georgian President Mikheil Saakashvili hosted the visiting American Secretary of State at a wine-filled dinner at restaurant in the Black Sea resort town of Batumi. Reports the, ahem, Daily Mail (in a photo-filled dispatch):
Hillary Clinton made sure to have a little fun on her latest official trip by taking some time out to taste the best wine that Georgia had to offer.
The Secretary of State seemed to be in high spirits as she chatted with Georgian President Mikheil Saakashvili and surveyed a variety of wine at the Adjarian Wine House in Batumi, a beach town decidedly off the beaten path of high-level political conferences.
She was pictured trying at least three different variations of the restaurant’s vintages, and laughing with the President and First Lady over champagne when they first sat down to dinner.
As previously reported on this blog, the ancient Georgian tradition of making wine in clay jars (known as kvevri) has not only been making a comeback in its birthplace but has started to gain a strong reputation globally. So can the kvevri craze help turn things around in Georgia, especially in terms of developing both the country's wine and tourism industries? The BBC, in a recent report, tries to answer that question by taking a look at the trials and tribulations of a set of twin brothers who are trying to revive their family's kvevri-centric 200-year-old winery. The report can be found here.
As Eurasianet's Nino Pasturia wrote last year, Georgia's efforts to break into the American wine market had been stymied by the fact that some famous Georgian wine brand names were actually trademarked to a company based in New Jersey.
It turns out the Georgian government was facing similar problems in Germany, where the trademark on three types of Georgian wines were held by a Russian company. Considering the ongoing trade battle between Georgia and Russia, which banned the import of Georgian wine in 2006 in the wake of political tensions with Tbilisi, finding out Russians held those trademarks could not have been good news for Georgian winemakers. But now it appears the Georgians have managed to gain the upper hand. From a report on the website of Georgia's Democracy & Freedom Watch:
Georgia has reclaimed three brand names of wine that had been patented in Germany by a Russian company.
The company, Moscow Wine and Spirits Company GmbH, had been selling the wine brands Tsinandali, Kindzmarauli, Khvanchkara.
Irakli Ghvaladze, head of Sakpatent, Georgia’s intellectual property agency, says these brands are of Georgian origin and have been Georgian property for centuries. In 2011 Sakpatent became aware that the Russian company had registered the brandnames with the German patent and trademark office.
Last year Georgia reclaimed the trademark of Khvanchkara from the U.S. patent office, which had granted the rights to use it to Dozortsev & Sons. According to the agreement, all rights to use the Khvanchkara trademark in the United States have been transferred to Georgia, which means that no one will have the right to import goods and sell it on the American market under this name without Georgia’s permission.