Friday, July 15, 2016

National Wine Agency: Time is needed to abandon viticulture subsidies

15.07.2016. An interview with Giorgi Samanishvili, director of Georgia's National Wine Agency:

Georgian Prime Minister announced that grape growing would be subsidized in the current year as well. What subsidies will be allocated and what amount of grapes are planned to be  processed?

The subsidy will depend on grape variety and will be 0.20- 0.45 GEL per kilogram. The general scheme is the same as in the past year. The money will be transferred to companies which   will buy the grapes from the population at a higher price within  15 days.

The entire crop will be processed, we can say that the demand from winemakers has grown in comparison with the last year. 

Prime Minister  said about  the need to stimulate local producers and expand  export  markets. What can you say in this regard?

The National Wine Agency for three years has been actively implementing measures to diversify export markets and quite successfully.

We are actively working to increase the recognition of Georgian wines on the markets where it is already available, as well as in the countries we plan to enter. For example, 5 years ago China was not in the list of countries importing Georgian wine, and now it occupies the 3-rd place.

 Which countries are you going to enter?

In general, Georgian wine is sold in 40 countries, in different amounts. The main importing countries are Russia, Ukraine, China. The  Asian direction is developing very successfully as well. Sales grew in the Baltic states, and the United States remain the strategic direction.

In your opinion, why this industry cannot survive without government support?

The policy of the state has not changed. The government wants  to stop subsidizing viticulture, but this takes time. We are working actively to promote our wines in the international markets and stimulate the growth of quality of Georgian wines. Gradually subsidy amounts will be reduced, and in a few years the industry will  become profitable without government intervention.

So, we can assume that the subsidies will continue in 2017?

The decision will be made by the government.

This year, the price  of Georgian has decreased in export markets. What is the reason?

It should be noted that despite the decline in export prices of wine, revenues of wine companies rose thanks to marketing operations. In the current year exports have grown  by 45% compared to the same period of 2015. That is, prices have fallen, but overall profit has risen.

As for the reasons for the decline in prices, it is mainly due to a decrease in purchasing power in importing countries.


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