Georgian Wine Agency to Spend GEL 9 mln on Marketing in 2020

The National Wine Agency (NWA) of Georgia will spend around GEL 9 ($3.04) million on marketing events in 2020, says Levan Mekhuzla, Chairman of the NWA.

He noted that compared to the current year, the Agency's marketing budget will increase by almost 1.5 million GEL, though the number of wine exporter countries is limited.

“We are working with almost all partner countries, but more emphasis will likely be placed on the Nordic countries, where marketing activities have been very sporadic so far. We are also going to work strategically with Germany,” Mekhuzla said.

The head of the National Wine Agency says they will not be spending any of their budget on marketing activities in Russia.

"In Russia and the post-Soviet space, aside from the Baltic states, we have not had any marketing activities for the last four or five years and we have no plans to do so next year either,” he said.

Mekhuzla also noted that following the deterioration of Georgia-Russia relations after large-scale June 20-21 protest rallies, after which Russia suspended flights with Georgia and started talks about a new wine embargo, Georgian wines are struggling in Russia.

“These statements and events brought the Georgian wine industry cautious expectations and we and our companies are trying to diversify markets in order to be less dependent on one particular market,” he said.

The Head of the Georgian Wine Agency added that the same caution can be observed from the Russian importers of Georgian wine.

“The situation there is more or less stable but orders for Georgian wine have become less frequent,” he noted.

Last month, Mekhuzla announced that in the first seven months of 2019, Georgian wine export to the United States increased by 60% and to Russia by just 2%. However, about 60% of Georgian wine is usually exported to Russia.

He said in the next 3-4 years, on average 4-5 million bottles of wine will be exported to the American market, which will be an important step forward in replacing the traditional markets.

“We are committed to double-digit growth in the US, South East Asia and Europe. So far we have a 60% increase of wine export to the US and I hope we will finish with a 50% increase when the year is over,” he noted.

Mekhuzla says most Georgian companies find it easier to operate in a market where awareness of Georgian wine is high, but that many are starting to re-think their strategies.

"Risks are being reevaluated and there are some companies that are making a special effort to replace traditional markets or explore new ones,” he added.

During the last seven months of 2019, 47.2 million bottles of wine were exported to 47 countries worldwide, 4% more than the same period in 2018. Exported wine income amounted to $114.2 million, up 6% on last year.

In addition to this, Georgia exported about 86.2 million bottles of wine to 53 countries in 2018, which is a record high in the last 30 years. Last year, Georgia generated $203 million from the sale of wine abroad.

Revenue increased by 20% from 2017, while the volume of exports increased by 13%, says the Georgian National Wine Agency.

Georgia exported 20 million bottles of Georgian brandy (+9%) and 422,000 bottles of Chacha (+47%) abroad in 2018. In total, Georgia sold $306.5 million worth of alcoholic beverages in 2018, including wine, brandy, chacha and more.

By Thea Morrison

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16 September 2019 17:52