Kakhetian Winemakers Ask for Grape Subsidies

A number of winemakers in Georgia’s Kakheti region have asked the government for grape subsidies this year, noting that prices have gone up on other products but not grapes.

The winemakers believe grape prices will be very low and call on the government to step in to solve the problem.

“It is costing farmers more to look after their vineyards and if the grape prices are low, it’s not worth us selling them,” winemaker Giorgi Shatirishvili said.

On wine export, he says the state should target China and Europe more, adding that after the Russian travel ban, the neighboring country may also be unpredictable in terms of wine.

“We need to target Europe because the Europeans really love wine. Many winemakers think like me, but some still prefer the Russian market because there is [already a] high awareness of Georgian wine,” the winemaker says.

The Ministry of Environment and Agriculture says more than 250,000 tons of grapes are expected to be harvested in Kakheti this year, which could reduce demand from entrepreneurs, especially for white grapes.

“The National Wine Agency is mobilizing to ensure that grape-growers do not face any problems selling their harvest,” the ministry said, adding, “We don’t believe there is a need for subsidies this year."

It added that new vineyards have been cultivated, new and expanded old wineries have been arranged, and an agro-credit and agro-insurance system implemented. The agency also noted that wine export volume increased and export markets have been diversified, which creates more possibilities for Georgian winemakers.

However, the ministry notes that due to developments in late June 2019, the decline in exports to Georgia's largest export market and the expectation of Russia's possible imposition of sanctions on Georgian wine imports have created some negative expectations, which led to the risk of a negative impact on private sector activity.

Last year, over 230,000 tons of grapes were processed during the grape harvest and the income of 22,000 grape growers exceeded over GEL 300 ($102.46) million, a record high income, according to the Environment and Agriculture Minister of Georgia Levan Davitashvili.

About 280 private companies were involved in last year’s harvest in Georgia.

In 2013-2018, grape growers living in Kakheti and Racha-Lechkhumi region received an income of GEL 950 ($324.46) million during the harvest period.

Moreover, in 2018, 800 small, medium-size and large enterprises registered at the Georgian National Wine Agency, up from 50 in 2012.

The Georgian government subsidized the grape harvest until 2017. At the time, on announcing the suspension of subsidies, Davitashvili said there was a high interest in grapes from the private sector, therefore, there would no longer be a need for state subsidies for the main industrial varieties like Saperavi, Rkatsiteli and Kakhetian Green.

Last year, Davitashvili made a similar statement: "The Government of Georgia will not subsidize the grape harvest this year. Viticulture has become one of the most successful and developed sectors in the country as a result of the effective policy implemented by the Georgian government in recent years, as indicated by the increased exports, the growing number of wine producing companies, and the success of Georgian wine in exhibitions and competitions held worldwide.”

Georgia exported about 86.2 million bottles of wine to 53 countries in 2018, which is a record high number in the last 30 years. The country has generated $203 million from the sale of wine abroad. The revenue increased by 20% from 2017, while the volume of exports increased by 13%, said the Georgian National Wine Agency.

By Thea Morrison

Image source: mygeotrip.com

26 August 2019 18:43