Irakli Kobakhidze: “A total of USD 259 million worth of exported wine was sold in 66 countries worldwide last year, marking the highest figure in Georgia’s history.”

Verdict: FactCheck concludes that Irakli Kobakhidze’s statement is TRUE.

Wine exports from Georgia totalled USD 259 million in 2023, indeed marking the highest figure in recent years. Furthermore, whilst the increase in export revenue as compared to the previous year was 3%, the volume of wine exported decreased by 12%. This suggest that despite selling less wine, Georgia received more revenue from exports, implying a rise in the price of exported Georgian wine.

Russia remains the primary export market for Georgian wine. A total of 62,282.75 tonnes of wine worth USD 168 million were exported to Russia in 2023, marking a 4.3% increase as compared to 2022, when 69,905.6 tonnes valued at USD 161 million were sold. Notably, there was an 11% decline in the volume of wine exported to Russia, further suggesting an increase in export prices in the Russian market.

Considering the data, FactCheck concludes that Irakli Kobakhidze’s statement is TRUE.

Analysis

Prime Minister Irakli Kobakhidze presented the annual report at the Parliament, discussing various topics including wine exports. He highlighted: “A total of USD 259 million worth of exported wine was sold in 66 countries worldwide last year, marking the highest figure in Georgia’s history.”

Georgia exported 89,509.89 tonnes of wine worth USD 259 million in 2023, whereas the export figures were 101,662.02 tonnes at USD 252 million in the previous year, according to GeoStat data. This indicates that whilst the export revenue experienced a 3% increase in 2023 as compared to 2022, the volume of exported wine declined by 12%.

Notably, revenue from wine exports increased by 5.6% as compared to the previous year in 2022 whilst the increase in the volume of exported wine witnessed an astonishing increase of 26.3%.

Table 1: Georgian Wine Exports, USD Million, Million Bottles

Source: GeoStat

The aforementioned data highlights that the highest figure of exported wine was indeed recorded in 2023. Furthermore, the export revenue has increased despite a decline in the volume of exported wine sales, indicating an increase in the price of exported Georgian wine.

The export price of Georgian wine witnessed an upward trajectory in 2023 for the first time since its decline during the COVID-19 pandemic as reported by the National Wine Agency. Particularly the average export price of a litre of wine increased from USD 2.48 in 2022 to USD 2.89 in 2023.

Furthermore, their data indicates a striking increase in export revenue from key strategic markets: Republic of Korea (69%), Germany (43%), the United States of America (6%), Poland (3%) and Japan (1%).

Despite the increase in wine exports to other markets, Russia remains as the primary export market for Georgian wine. A total of 62,282.75 tonnes of wine worth USD 168 million were exported to Russia in 2023, marking a 4.3% increase as compared to 2022, when 69,905.6 tonnes valued at USD 161 million were sold. Notably, there was an 11% decline in the volume of wine exported to Russia, further suggesting an increase in export prices in the Russian market.

Additionally, Russia accounted for 65% of total wine exports in 2023, indicating a percentage point increase as compared to 64% in 2022. Russia’s share in total wine exports has generally increased by single percentage points each year since 2017 with the exception of 2022 when it rose by six percentage points as compared to the previous year.

Graph 1: Georgian Wine Exports in the Russian Market, Million Bottles (0.75l), USD Million

Source: National Statistics Office of Georgia

Analysis of wine export data demonstrates Russia’s evident influence on fluctuations in Georgian wine exports. Russia imposed a ban on importing Georgian agricultural products, including wine, upon concerns about quality under the decision of Russia’s Chief Sanitary Inspector Gennadiy Onishchenko. The aforementioned embargo led to a substantial decline in Georgian wine exports which amounted to USD 41 million in 2006 and halved the following year, reaching USD 29 million.

The lowest share of Russia in total exports was recorded in 2012 at 34% due to the aforementioned embargo. Georgian wine exports to Russia resumed in 2013 resulting in a substantial rise in exports in 2013 (USD 128 million) and 2014 (USD 185 million) following the lifting of the embargo. Furthermore, Georgian wine exports were adversely affected in 2015 due to the unstable situation between Russia and Ukraine, leading to a 39% decline (USD 96 million). Russia’s response to the 20 June 2019 events (threats of potential sanctions on Georgian products) once again highlighted Russia’s tendency to leverage trade ties with Georgia for political aims.

Considering all of the above, whilst the Georgian government should be aiming to reduce economic dependence on Russia, analysis of Georgian wine exports shows the opposite tendency: Georgia’s reliance on Russia has increased rather than decreased. Depending more on an unstable and unpredictable Russian market offers neither short-term nor long-term economic or political benefits to Georgia.

Considering the data, FactCheck concludes that Prime Minister Irakli Kobakhidze’s statement is TRUE.