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Thursday, February 7, 2013

In Vino Veritas – Russian market prepares for Georgian products

07.02.2013. Those who remember the Russian Ambassador Vyacheslav Kovalenko leaving Georgia after the 2008 August War will also recall the toast he made with a glass of water at Tbilisi Airport. The ambassador drank the toast to the century-long friendship of the Russian and Georgian people with water, thus, putting a full stop to the historical era that Russian and Georgian diplomats started two centuries ago with bowls full of wine.

Many observers evaluated the water toast of the Russian ambassador as a symbolic gesture: according to the experts, due to the embargo on Georgian wines and other products introduced in Russia in 2006, Kovalenko had to replace a glass of wine with a glass of water in front of the media gathered at the airport that day.

After the August War of 2008 the water toast of the Russian Ambassador took on a totally different context but the fact remains a vivid example of how Georgian wine became a political hostage in the Russian-Georgian confrontation.

In 2006, one statement made by Russia’s Chief Sanitary Inspector Gennadiy Onishchenko was enough to prohibit the import of Georgian wine and mineral waters, including Borjomi and several other products.

Almost seven years has passed since the embargo’s onset, but Georgian wine and mineral waters remain a tool of political trade between Tbilisi and Moscow.

President Putin said at a meeting with the Russian media, the Russian market may soon reopen for Georgian products. ‘This will be a kind gesture for our Georgian partners for resolving other, bigger political problems’ – at least this was the main sentiment behind President Putin’s response to the question pertaining to the perspective relations between the new Georgian government and the Kremlin posed by a journalist.

It is hard to doubt the sincerity of President Putin, as it is truly hard to understand why one would open a huge market to its political rival, for the latter to fund its Euro-Atlantic aspirations, in exchange for nothing.

It is not accidental that after this response, talk of Georgia’s return to the CIS became active in the Russian media. Recently, an official representative of Russia’s Foreign Ministry– Alexander Lukashevich, stated that talks have already started between Moscow and Tbilisi on Georgia’s return to the CIS.

Parallel to this information, last week the Russian Foreign Ministry’s website reported that the written request of the Chief Sanitary Inspector of Russia Gennadiy Onishchenko on issuing visas to the Georgian delegation has been satisfied. The Georgian delegation is going to Moscow to discuss the issue of returning Georgian wine to the Russian market.

The two processes clearly show what President Putin meant under “other, bigger problems” when responding to the journalist.

In the process of returning Georgian wine to the Russian market, one detail has to be taken into account, which can shed light on many things. After the promise of Prime Minister Ivanishvili on allowing Russian capital to Georgia, the Alfa Group owned by Russian businessman Michael Friedman has already managed to buy the control package of mineral water Borjomi shares from the family of deceased billionaire Badri Patarkatsishvili.

From unofficial talks it turns out that apart from the Shumi wine Company, which is owned by Russians, Russian companies have bought several other wine companies. Therefore, it can be assumed that the Kremlin is opening its doors to Russian companies to receive dividends and strengthen its political position in Georgia.

As for the negotiations between Georgian wine-makers and Gennadiy Onishchenko, former Minister of Economy Kakha Bendukidze thinks that what Russians are now making Georgia ask for (the return of wine to the market), Georgia can demand from them anyway by filing a complaint to the WTO. “Russia is a member of the WTO and it has already assumed that responsibility. They are making us request what we are already eligible to receive,” Bendukidze says.

Russian specialists have an interesting view. Russian sommeliers predict that in the case that Georgian wine returns to the Russian market, the Georgian wine will not be as popular as before. Tatiana Sharapova, head of the Russian Sommelier Guild states, in the period of absence of Georgian wine on the Russian market, its style has changed significantly. According to her, within U.S.-Georgian relations, Georgia received support from the California wine industry and as a result, changes in the selection of grapes during the wine-making process has left Georgia’s wine less authentic than it was before the embargo.

“In Georgia they make a more Californian Chardonnay and Cabernet, which are successfully sold in Europe as well as the United States. What Georgian wine-makers are offering today is not traditional to Georgian wine, in our understanding. These wines look like wines of Chile and Argentina but are more expensive,” Tatiana Sharapova says. “There is a small amount of wine, which tastes like the one that we remember. However, it is not cheap and mass production of this wine will not find its customers. During this period, Georgian wine has been on sale in Ukraine and it should be mentioned that the number of sales is decreasing every year.”

Erkin Tuzmuhamedov, a member of the Russian Sommelier Association, says the Georgian brand will not manage to make a come-back similar to Moldovan wines. “Before the ban, Moldovan wine took 80 percent of the Russian wine market. Now its share on the market is only 10 percent, even though the wine is relatively cheap. Georgian wine is expensive even in Georgia. It will not cost less than 150-200 rubles,” the sommelier says.

This way or that, several days ago the Chief Sanitary Inspector of Russia confirmed that he is ready to visit Georgia after meeting the Georgian delegation in Moscow on February 4.

According to Onishchenko, he plans to visit Georgia in order to solve the systemic issues related to importing Georgian wines and mineral waters to the Russian market on the spot.

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