Resume: In accordance with the National Wine Agency, 33.6 million bottles (0.75 litres each) of wine were exported to 39 countries in January-May 2019 which is 6% more as compared to the same figure of the previous year. The value of the exported wine exceeds USD 87 million which is 16% more as compared to the same figure of 2018.

Wine export increased to wine markets which are strategic for Georgia – to the USA by 136% (322,835 bottles), to China by 27% (2,972,733 bottles) and to Poland by 18% (1,540,182). There is a notable export growth to the following countries: to France by 91% (46,254), to Israel by 72% (131,184), to Lithuania by 57% (270,564) and to Russia by 5% (21,372,581). In terms of wine export, the top five export destinations are as follows: Russia (21,372,581), Ukraine (3,080,562), China (2,972,733), Poland (1,540,182) and Kazakhstan (1,223,256).

In addition, 10.7 million bottles (0.5 litres each) of brandy have been exported to 17 countries which is 60% more as compared to the same figure of 2018. The volume of revenues from brandy export amounts to USD 23 million (67% growth). There were 216,500 bottles (0.5 litres each) of chacha exported to 19 countries with export growth reaching 61%. The volume of revenues from chacha export amounts to USD 572,200 (37% growth).

Although Georgian wine gets exported to a growing number of countries every year and enters new markets, the Russian market still remains as the leading export destination. The events unfolding in the wake of June 20 (Russian threats to impose sanctions on Georgian goods) is yet another demonstration that Russia is an unreliable trade partner which uses trade with Georgia to achieve political objectives.

Analysis

At the plenary session of the Parliament of Georgia, Otar Danelia, Georgian Dream MP, spoke about agriculture and stated: “There is a significant growth in terms of wine export in 2019. I would like to emphasise that export increased to such strategic markets as the USA. There, we have a 126% growth. In spite of export to China being already growing, there we have an additional 27% growth. Export to Poland increased by 18% and to France by 91%. These countries are important not only because of export diversification but because of strong winery traditions there and, hence, Georgian wine finds a competitive niche in that market. Another very important piece of information is that export of brandy increased by 60% and we did not have such figures before whilst the export of chacha also increased by 61%.”

In accordance with the National Wine Agency’s information, 33.6 million bottles (0.75 litres each) of wine were exported to 39 countries in January-May 2019 which is 6% more as compared to the same figure of the previous year. The value of exported wine exceeds USD 87 million which is 16% more as compared to the same figure of 2018.

Wine export increased wine markets which are strategic for Georgia – to the USA by 136% (322,835 bottles), to China by 27% (2,972,733 bottles) and to Poland by 18% (1,540,182). There is a notable export growth to the following countries: to France by 91% (46,254), to Israel by 72% (131,184), to Lithuania by 57% (270,564) and to Russia by 5% (21,372,581). In terms of wine export, the top five export destinations are as follows: Russia (21,372,581), Ukraine (3,080,562), China (2,972,733), Poland (1,540,182) and Kazakhstan (1,223,256).

The leader of export is Kindzmarauli wine with 6,047,911 bottles (6% growth), followed by Mukuzani with 1,957,553 bottles (20% growth), Tsinandali with 1,509,961 bottles (10% growth), Akhasheni with 638,878 bottles (0%) and Khvanchkara with 402,802 bottles (43% growth).

In addition, 10.7 million bottles (0.5 litres each) of brandy have been exported to 17 countries which is 60% more as compared to the same figure of 2018. The volume of revenues from brandy export amounts to USD 23 million (67% growth). There were 216,500 bottles (0.5 litres each) of chacha exported to 19 countries with export growth reaching 61%. The volume of revenues from chacha export amounts to USD 572,200 (37% growth).

In regard to 2018, 86.2 million bottles (0.75 litres each) of wine were exported from Georgia to 53 different countries. In accordance with the National Wine Agency’s information, this is a record figure in the last 30 years. Growth constituted 13% as compared to 2017. The value of exported wine amounts to USD 203 million which is 20% more as compared to the same figure of 2017. The largest export destination of Georgian wine was still the Russian market (53,682,627 bottles) which constitutes 62.3% of total wine export.

Table 1: Wine Export in 2010-2018, Volume and Revenue from Export

Source: National Wine Agency

The growth or decline in the export of Georgian wine in the last years depends upon the Russian factor. As we know, Russia banned the import of agricultural goods from Georgia in 2006, as decreed by Russia’s Chief Sanitary Inspector, Gennady Onishchenko, under the pretext of poor quality. Export of Georgian wine and brandy to Russia was restored in June 2013. Georgian wine export in 2013-2014 increased largely because of the reversing of the ban on Georgian wine. In 2015, it was again the Russian factor which caused a decrease in Georgian wine export. This year, the unstable situation in Russia and Ukraine significantly affected Georgian wine export, resulting in a 39% decline in total export.

Georgian wine export statistics to the Russian market in the last year are as follows:

Graph 1: Georgian Wine Export to the Russian Market (Million Bottles, 0.75 litre)

Source: National Wine Agency

Of note is that in 2018, Georgian wine export to the Russian market increased by 11.2% as compared to the previous year whilst the percentage growth was much higher in the past years (for instance, growth in 2017 was 43% as compared to 2016). In the first five months of 2019 as compared to the same period of the previous year, Georgian wine export to Russia increased by 5%. As mentioned previously, the Russian market was the top destination for Georgian wine export (62.3% of total wine export) in the previous year as well. Although Georgian wine gets exported to s growing number of countries every year and enters new markets, the Russian market still remains as the leading export destination. The events unfolding in the wake of June 20 (Russian threats to impose sanctions on Georgian goods) is yet another demonstration that Russia is an unreliable trade partner which uses trade with Georgia to achieve political objectives.