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Georgian Wine to Rise in Price in the Russian Market

Whether the ruble’s depreciation will cause   a hike  in prices of  Georgian wine on the Russian market? What risks are the Georgian winemakers talking about and what are  the Russian side’s requirements?

At this stage  exporting companies have already received the first messages from  the Russian partners.

Georgian wine will rise in price on the Russian market – the Georgian winemakers forecast in the backdrop of  the Russian ruble’s devaluation.

Exporting companies say they have already received the first messages from  the Russian partners.

Georgian winemakers name several reasons for wine price increase.  The main is  record increased pricesregistered during a vintage.

A price for  Saperavi grapes was GEL  2.5  per kg in 2014 which is about 50%  higher than the 2013 price. It is also important that this year up to  90 companies  have purchased  an unprecedented number of overall crop amounted to 119 052 tons, so a drop in  prices of exported  wine will be unsuccessful for Georgian businessmen.

The Sommelier Association states that the ruble’s devaluation does not affect sales at this point.However, the Georgian businessmen will have  to hike  prices and  revise a volume  of export products in the future.

According to the National Wine Agency, before  the Russian embargo,  Georgian exports to  the northern neighbor’s market accounted for 87% of the total exports. Last year when trade relations with Russiawere restored, wine exports reached 60%. This means that every company will have to revise prices or volume of sales due to the Russian ruble’s devaluation. The government can only help wine producers inmastering alternative European market and promoting Georgian wine there.

The National Wine Agency says that  Georgian wine exports have  grown dramatically in the Chinese, Polish and American markets this year. According to the Agency, the government is not focused on the Russian market and is actively working on alternative markets. Exporting companies trading on theRussian market should determine the risk factors themselves.