Summary: The revenue received from the sale of grapes in Kakheti in 2013-2017 exceeded GEL 587 million. In 2017, wine export also reached its historical maximum (76 million bottles). However, more than half of the export still goes to Russia.
In addition, it is important to note that the state has been providing subsidies for grapes since 2008 and approximately GEL 150 million was spent from the state budget in 2008-2017 to this end. In 2017, the state partly ceased its grape subsidies.
The Prime Minister of Georgia, Giorgi Kvirikashvili, during a conference of the Georgian Dream’s Telavi regional organisation, underlined the work carried out in the Kakheti region in recent years and noted: “Winemakers received up to GEL 615 million in revenues in 2013-2017. As a result of all of this, we witnessed an unprecedented revival in winemaking and viticulture in the history of independent Georgia.”
FactCheck analysed the results of the vintage carried out in the aforementioned period in Kakheti.
A total of 593,500,000 kilograms of grapes were processed in Kakheti in 2013-2017 which brought GEL 587,164,476 million in revenues.
Table 1: Amount and Revenues Received from Processing Grapes in Kakheti in 2013-2017 (GEL)
It is important to mention that the state has been subsidizing grapes since 2008. The government made the decision in order to neutralise the negative consequences of the Russian embargo and promote the winemaking-viticulture fields.
Approximately GEL 150 million was allocated from the state budget in 2008-2017 with the aim of subsidising the grape harvest. In 2017, based on the decision of the government, subsidies were not given out for grapes of higher quality. The subsidies remained in place for the Aleksandrouli and Mujuretuli grape varieties in the Racha-Lechkhumi region (GEL 2 per 1 kilogram of grapes). The wine companies that purchased Rkatsiteli and the green grape variety from Kakheti for GEL 0.70 per 1 kilogram of grapes (compensation amounted to GEL 0.35 per 1 kilogram of grapes) with the aim of producing brand spirits and concentrated sweet grape juice also received compensations.
As mentioned above, the government only subsidised the Aleksandrouli and Mujuretuli grape varieties in 2017. Sustaining this tendency would be preferred (although the current year is an election year) as it would allow the field to develop independently.
According to the National Wine Agency, a record amount of wine was exported from Georgia in 2017 which makes for a 30-year high. In 2017, 76.7 million bottles (0.75 liter) were exported to 53 different countries with revenues received from export amounting to USD 170 million.
Table 2: Wine Export in 2010-2017 (0.75 liter bottles)
|Number of Bottles||15 milion||19 million||23 million||46 million||59 million||36 million||50 million||76 million|
As for the revenue received from wine export in the given years, the statistics look like this:
Graph 1: Wine Export in 2007-2017 (million USD)
Source: National Wine Agency
Russia remains the largest export destination – 47,778,920 bottles were exported to Russia which accounts for 62% of gross export. In recent years, the growth or decline in Georgia’s wine export was mostly due to the Russian factor. For instance, wine export grew significantly in 2013-2014 due to Russia’s lifting the embargo on Georgian wine in June 2013. The decline in the export of Georgian wine in 2015 was also due to the Russian factor (36 million bottles). The unstable situation in Russia and Ukraine seriously damaged Georgian wine export. In 2015, wine export to Russia and Ukraine decreased by 51% and 56%, respectively, accounting for a 39% decline in the gross export.
The fact that Georgian wine is exported to an increasingly larger number of countries has been a positive event in recent years (Georgian wine was exported to a total of 53 countries in 2017). However, Russia still accounts for more than half of the wine export.