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Russian Market Closed for Georgia

“Commersant” reports that  the Russian market has become unprofitable for the Georgian producers and, accordingly, the export is almost stopped.

According to a source, a large number of trucks with alcoholic beverages and mineral water has accumulated at the Russian-Georgian border , companies exported fruits to Russia also face big problems.
Gigla Agulashvili, the head of the parliamentary Committee on Agriculture, confirmed an actual termination  of exports to the Russian Federation. According to him, the tendency of the suspension of exports to Russia and Ukraine is mainly concerned with wine and mineral water.

“Because of the devaluation of the ruble our manufacturers face big risks, respectively, exports declined significantly. Now exporters are working on the development of other markets. Companies refrain from supplying products to Russia, since the probability of losses is high. It’s hard to say how they will be able to compensate the losses associated with the absence of the Russian market. As of 2014, Russia accounted for 63% of exports of Georgian wine, although in 2005 the figure was over 80%. These figures show that to date wine exports is much more diversified. It is clear that we will not succeed to quickly and effectively replace the Russian market, but it does not mean that we should give up and do nothing. On the contrary, it is necessary to more actively pursue export diversification. Now, of course, it is impossible to specify how long it will take, but it is obvious that the government should develop an action plan and begin to implement it, “- says the MP.

According to him, the Ministry of Agriculture and the National Wine Agency are actively engaged in the development of alternative markets.

“If the Tourism Administration and the Government of Georgia become more active, the picture may change and we will not only depend on the unstable post-Soviet markets. So the problem with the Russian market is not a surprise for us. We all knew that the Russian market is unstable and  can be closed again for Georgian producers on political grounds. Not only Georgia but also Ukraine, Belarus, the Baltic States, Poland, and many others face similar problems. Therefore, when predicting it is necessary to take into account the positive opportunities we have, and initiatives of the government are very important, “-  Agulashvili notes.

Manufacturers  themselves talk about the problems with export of wine in Russia, but the Ministry of Agriculture refutes this information. The emphasis was put on the fact that, for example, the sale of Georgian cognac  not only reduced, but increased.

Nevertheless,  according to the Statistics Service, in January 2015 exports of Georgian wine in Russia decreased by 3 times in comparison with January 2014.