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Georgian Wine Exports Surge with Russia Major Market

Export of Georgian wine is on the rise with 65.3% of over 31.3 million 0.75-liter bottles exported in the first seven months of 2014 going to Russia, according to the National Wine Agency of Georgia (NWA).

31,376,279 bottles, exported in January-July 2014, represent 95% increase compared to the same period of last year.

Wine export value increased 117% year-on-year in the first seven months of this year to USD 102.18 million, according to NWA.

Ukraine, which was the largest market of exported Georgian wine before being replaced by Russia after the latter lifted embargo last year, is now second, followed by Kazakhstan, Poland, Belarus, China, Latvia, Lithuania, Estonia and Azerbaijan.

Georgian winemakers say that Russia’s intention to suspend free trade agreement with Georgia will increase price of Georgian wine exported to Russia by about 20%, which will most likely cause decline in sales, but executives from wine producing companies say it is now difficult to predict a precise impact.

Russia currently has 20% import duty on wines and the same will apply to Georgian wines after Moscow suspends its free trade agreement with Tbilisi.

Russia, which is a member of WTO since August 2012, has committed to reduce this tariff from 20% to 12.5% within four years upon WTO accession.

Speaking at a meeting with a group of students on August 4, Georgian PM Irakli Garibashvili said that it was possible to reopen Russian market for the Georgian products as a result of “pragmatic and constructive” policy of the Georgian government, but also warned against overreliance on the Russian market.

“I am always saying that we should not depend only on a single market,” Garibashvili said. “We remember well what happened when Russia imposed embargo [in 2006]; our economy suffered a lot at the time. We had no export markets and depended on the Russian market. We should avoid the same now.”

Russia accounted 71% of all Georgian wine exports in the first quarter of 2014, going down to 68% in the first five months of 2014.

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