Irakli Kobakhidze: “The area of vineyards has expanded by 70%, grape processing rate has increased five-fold and Georgian wine exports have quadrupled since 2012.”

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

Analysis

The Prime Minister of Georgia held a briefing, during which he discussed the current grape harvest in Georgia and compared the trends under the previous government to the results achieved today, stating: “The area of vineyards has increased by 70%, the rate of grape processing has risen five-fold and export of Georgian wine has increased by four times since 2012. Georgia earned USD 259 million in wine export revenues last year, a rise when compared to the USD 71.5 million in 2012.”

FactCheck will examine each of the three claims made in the aforementioned statement individually.

The area of vineyards has expanded by 70% since 2012.

Notably, the area of vineyards did decrease from 2007 to 2010. The then-ruling United National Movement party implemented the Hybrid Vine Variety Substitution Programme during this period, according to which farmers were compensated with GEL 2,000 per hectare of grape vines cut down from 2007 to 2008, with the compensation reduced to GEL 1,000 in 2009-2010. A total of GEL 1.6 million was allocated from the budget for this programme, resulting in the removal of 924 hectares of vineyards.

The Hybrid Vine Variety Substitution Programme was implemented by the National Wine Agency (formerly Samtrest). Experts explain that this initiative became particularly important after Russia imposed an embargo on Georgian consumer products. As Georgian wine was no longer exported to Russia, Georgian wine producers shifted their focus to high-quality wine, rejecting hybrid vine varieties – which are even illegal for wine production. Whilst the Georgian Dream often emphasises that the UNM is responsible for vineyard cutdowns, the programme specifically aimed at replacing hybrid vines, which were unsuitable for high-quality wine production.

Additionally, the Russian embargo further reduced the demand for grapes, leading the Georgian population to cut down their excess vineyards at their own initiative. These factors resulted in a reduction of 4,000 hectares in the vineyard area in Georgia, decreasing from 37,000 to 33,000 hectares (approximately 1,000 hectares were cut down as part of the aforementioned programme). Vines were planted on 41,200 hectares of land in 2020, primarily due to the repeal of the Russian embargo on Georgian alcoholic beverages in 2013. The demand for grapes increased and the population began to plant vineyards again, as Georgian wine was once again exported to the Russian market. Therefore, the area of vineyards increased by approximately 8,000 hectares by 2020, suggesting a 25% rise under the current government of the Georgian Dream (GeoStat has yet to update this data with more recent figures). The 70% rise cited by the Prime Minister likely refers to the 2023 data. FactCheck leaves this statement without a verdict, as we currently lack the latest statistics.

Grape processing rate has increased five-fold.

Grape harvest yielded 144,000 tonnes in 2012, with 52,000 tonnes produced, according to GeoStat. The harvest and production figures were almost identical in 2023, with 221,000 tonnes of grapes produced. Hence, grape production has increased by 4.3 times as compared to 2012, suggesting that the Prime Minister slightly exaggerated the actual figures.

The statistical figures for grape harvest and production in recent years are as follows:

Graph 1: Grape Harvest and Production in 2012-2023 (Thousand Tonnes)

Source: National Statistics Office of Georgia

The data highlights that historically high figures of both grape harvest and production were recorded in 2020.

Considering the statistical analysis above, FactCheck concludes that the aforementioned part of Irakli Kobakhidze’s statement is TRUE.

Georgian wine exports have quadrupled.

Georgia exported 89,509.89 tonnes of wine valued at USD 259 million in 2023, according to GeoStat. In comparison, the export figures for 2012 were 20,211.53 tonnes of wine, worth USD 70 million. Notably, wine exports have increased by 3.7 times, or 73%, in 2023 compared to 2012. Additionally, the number of wine units sold show a 4.4-fold rise, or a 78% increase. Therefore, the Prime Minister's data is nearly accurate.

However, the monetary and per-unit increases are reduced to 3% and 12% respectively, when comparing 2023 data to the figures from the previous year.

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

Source: National Statistics Office of Georgia

Furthermore, it is essential to note that Russia remains as the primary export market for Georgian wine to this day. Georgian wine exports to Russia reached 62,282.65 tonnes, valued at USD 168 million, which reflects a 4.3% rise as compared to USD 161 million from the previous year (69,905.6 tonnes); however, there was an 11% decrease in the number of units of wine exported. This suggests that the export price of wine has also increased in the Russian market.

Russia imported 0.37 tonnes of Georgian wine, valued at USD 22 million in 2022. Therefore, these figures represent a 7.5-fold increase in monetary terms and a 168-fold increase in the number of units exported. However, such comparisons are irrelevant, as Russian embargo on Georgian products, including wine, was in effect from 2006 to 2013.

Russia accounted for 34% of Georgia’s total wine exports in 2012, which increased soon after the repeal of the embargo and has consistently surpassed 50% in recent years (refer to article).

Although we constantly underline that the Georgian government should aim to reduce economic dependence on Russia, analysing the Georgian wine export statistics reveals the opposite – rather than decreasing our reliance on Russia, we are even increasing it. Growing dependence on Russia’s unstable and unpredictable market cannot bring economic or political benefits to the country, neither in the short-term nor in the long-term perspective.

Although the Prime Minister accurately cites the growth in data for 2023 as compared to 2012, he omits the crucial detail that whilst wine exports increased in monetary terms in 2023, there was a decrease in the per-unit figure. Considering the analysis above, FactCheck concludes that Irakli Kobakhidze’s statement is MOSTLY TRUE.