In 8 months of 2015, Georgian wine exports went down by 46%. The current economic situation in the region was named the main reason for this.
The National Wine Agency officials say that the sharp decline in exports in the two largest exporter countries – Russia (-58%) and Ukraine (-63%) had an impact on total exports for 8 months, which is 46% less compared to the same period of 2014. Georgia’s Prime Minister says the government is doing everything to diversify markets in the current situation. At the same time Prime Minister calls the wineries to be more active.
Whether the companies are working to diversify the markets and how the government is involved in this process?
Director of Tbilvino Zurab Margvelashvili notes in a conversation with CBW that the company has one of the most diversified markets among wine companies and exports its products to more than 30 states. However, Margvelashvili says that they carry out the market diversification through the company’s financial and human resources.
Nevertheless, the head of Tbilvino notes that the state really promotes this process and it would be ungrateful not to mention this. In Margvelashvili’s words, the government offers the companies co-financing to participate in wine exhibitions. The Ministry of Agriculture has signed a contract which ensures the arrival of the experts from the target markets. Zurab Margvelashvili adds that the Georgian companies are visited by foreign specialists, who own the wine shops, or are consultants.
According to Director of Kakhetian Traditional Winemaking (KTW) Zurab Chkhaidze, if the Prime Minister’s call to the companies to be more active aims to increase sales, then this is absolutely right move.
As for the company and the steps that are taken in this reality, in Chkhaidze’s words, the company has done everything possible to prevent a drop in sales. Specifically, the wine was exported to a new market of Malaysia, at the same time the number of contractors in export countries have increased. The company increased capacity and added a new building that allows to process additional 3 tons of grapes. At this stage, the company exports wine to 15 countries.
Chkhaidze believes that the diversification process is very time consuming and requires the market investigation, study, however, the fact that Georgia’s name is unknown in many countries creates the problem. In Chkhaidze’s opinion, the traditional markets like the CIS countries are more familiar with Georgian wine while the rest of the world recognizes France, Italy and Spain the largest producers of wine.
Zurab Chkheidze says that the current difficult situation requires putting emotions aside and working. He notes that last year there was a stir and chaos around the harvest that led to unrealistic prices for grapes. “Telliani Valley” exports wine to about 25 countries both in Europe and the US. The company is trying to export wine to China. According to them, the diversification process is individual for each country. They say in the company that the entry into the US market is more difficult than in other markets.
As for sales, due to recent developments, the sales to Russia didn’t decline while in Ukraine a drop is being observed.