Georgian Wine And Water under Russian Spotlight
07 March, 2013
Georgian Wine And Water under Russian Spotlight
While Georgian wineries, spirit distillers and mineral water companies are expecting results of Russian inspection, scrutinizing sanitary standards of Georgian enterprises in order to admit Georgian product back to Russian market, Georgian economic analysts recommend solution of the quality issues through the World Trade Organization. A group of Russian experts having inspecting technical and sanitary conditions of Georgian alcohol drink and mineral water producer enterprises at spot past week, left Georgia on February 28, 2013, leaving companies in uncertainty until the
final verdict whether or not the inspected enterprises respond to Russian standards is drawn out.
The inspection was sent by Genadi Onishchenko, Head of RospotrebNadzor, a sanitary body of Russian Federation, to Georgia after the Georgian delegation met with Onishchenko in Moscow early this past February in order to discuss return of Georgian product to Russian market after six-year trade embargo. Onishchneko hurled Georgian wine, mineral water and agriculture product off Russian market under alleged quality problems thus inflicting a huge impact on Georgian export dependent on Russia by around 18% by 2005. The key victim was wine and mineral water as Russian share in their export accounted for around 70 and 60% respectively. Commensurately wine and mineral export dropped by similar figures in 2006. Some wineries even reported of 90% drop in sales. Gradually the industry diversified its export markets and recovered but the biggest wine export figure making 22 million bottles past year is far below the pre-embargo data accounting to around 57 million bottles out of which 52 million came on Russia.
And only after Russia’s enrollment at World Trade Organization (WTO) in 2012 Georgia, already a WTO member, got a chance to get back to Russian market as the WTO prohibits any kind of trade barriers between the members of this reputable international trade club. However, Russia lingered to open up its market due to very quality issues and required to hold special at-spot-inspection of enterprises willing to export to Russian market to double-check whether or not they respond to Russian standards. Official Tbilisi appeased.
Out of 80 Georgian companies submitting request on reappearing at Russian market Russian experts inspected 40 alcohol drink producers [wineries and brandy producers] and four mineral water companies at the first phase. Inspection is free of charge and all companies aspiring to Russian market will be inspected, Ministry of Agriculture (MOA) informs. According to Giorgi Margvelashvili, Director General of Tbilvino winery, the inspection includes two phases. This first one was aimed on checking technical and sanitary conditions of enterprises and after positive results Russian experts will hold the second phase to test the quality of wines themselves.
However, neither government nor companies can name the exact timeline when Russian inspection will provide with the answer on this first examination or how long the entire inspection procedure will last. They just hope for better.
“At first sight they seemed pleased when checked the winery but I cannot say anything for sure, the final result will be informed to MOA,” Margvelashvili told Georgian Journal.
Mikheil Saakashvili, President of Georgia, gave a negative outcry to the Russian inspection as of insulting one for product of other countries enter without this kind of at-spot inspections to Russia.
“Are we still in the Soviet Union when Russians used to arrive to Georgia and we had to run to and fro to please them and scratch them bellies, are not we supposed to leave this epoch behind?” Saakashvili inquired in confusion affronting new government, wineries and even Onishchenko in consequence. The latter nearly canceled the inspection but changed his mind eventually as after shift of power Saakashvili with almost expired office term and belonging to the ex-ruling party acts as an opposition and is no decision-maker.
Margvelashvili argues that other countries, Ukraine for example, also do similar inspections and there is nothing unusual. But economic analysts find completely redundant the said quality inspection of enterprises that export their product world over and have international quality certificates. As a matter of fact Georgian wine and mineral water companies who managed to hit EU market [after Russian market was closed] put their enterprises in full compliance with the state-of-the-art standards. Besides, Georgian law obliges the export-orientated companies to streamline their production standards and technologies with the EU standards.
Some analysts regret that Georgian authorities do not use the WTO format to solve the problem more effectively.
“I cannot understand this here quality inspection of Russian experts,” Demur Giorkhelidze, an economic analyst, said in the interview to Georgian Journal. “Russia has such a strong border control that no bad product may penetrate there. If nevertheless they have quality pretensions with our companies, that export to the EU by the way, let solve the issue through the WTO quality dispute council that will make unbiased conclusion. This process will be shorter and stricter. I think it is our authorities’ defect that they cannot use the WTO lever properly.”
Irakli Lekvinadze, an economic analyst, agrees that the said inspection is redundant but reminds that Russia never complies with the rules of international organizations and the diplomatic way of solving the quality issue on the state-to-state level can be more effective.
But all assess Saakashvili’s statement as harsh and undermining the underway Georgian-Russian trade restoration process.
“Fortunately, nobody takes him seriously anymore,” Lekvinadze said.
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