Price of the grape harvest
12 September, 2015
Price of the grape harvest
Exclusive interview with Otar Danelia, Georgian Minister of Agriculture

“We weren’t planning to subsidize viticulture this year; the field’s development perspectives looked bright enough without additional funding, but given the situation in the region and with our major trade partners, well…”

This autumn, rtveli (grape harvest) and price on grapes are among Georgia’s most relevant issues, especially so with our wine export to Ukraine and Russia dwindling and wine factories yet having to finish selling last year’s bottles. However, our
Agriculture Ministry apparently has a fallback plan for cases such as these, aimed at helping winegrowers who have trouble selling their harvest.

Otar Danelia, Georgia’s Minister of Agriculture:

– This year the expected harvest is approximately 200 000 tons of grapes, out of which will 120 or 130 thousand be sent to processing. We weren’t planning to subsidize viticulture this year; the field’s development perspectives looked bright enough without additional funding, but given the situation in the region and with our major trade partners, well… After analyzing the demand for wine and discovering it to have decreased by a significant margin, we realized that the field still needs subsidizing.

Our subsidies envision 35 tetri per kilogram of white grapes and 15 tetri for black ones. Unlike the way it previously was, this time it will be the farmers that receive the subsidies, not the wineries.

– Does the volume of subsidies influence the market price of grapes?

– No, it does not determine the price per se; it just greases the wheels of the entire process and helps it move along. It is important to maintain balance in this business, ensuring that prices do not make any of the participating sides come off a loser. Having the grapes priced properly facilitates healthy competitiveness of Georgian wine. We are currently at the stage when our wine is being popularized at non-traditional markets; therefore, it is necessary to maintain decent pricing as well as tendencies and quality to make sure we are able to compete at these markets.

For example, Georgian wine cannot afford to be far more expensive than Italian or French wine. Although nothing stops us from producing pricy wines, we should supplement that with wines intended for a cheaper segment of the market. We should also maintain balance of peasants’ well-being and proper operation of wineries. All this is the reason why we have entrusted the private sector with the issue; it will ensure that the price of grapes is properly regulated.

– Do you expect most of our grape harvest to remain undealt due to the fact that our wine import to Ukraine and Russia has dropped beyond 50 percent?

– This was expected, and that’s precisely the reason why we are going to continue supporting the field. We want Georgian wine to appear on new markets with competitive price tags attached to it already, and this is exactly what our subsidies are aimed at. I promise you that we will do everything to make sure that no part of our entire grape harvest goes unused.
Numbers and prices: What to expect

Rtveli, Georgia’s trademark grape harvest, began on September 3, with up to 30 companies registering to assist with and participate in its organization. Just like in 2014, the Georgian government is offering subsidies to Kakhetian grape farmers. Within the framework of this year’s rtveli, a kilogram of Kakhuri Mtsvane and Rkatsiteli grapes is subsidized for 35 tetri (0.35 GEL), while a kilogram of Saperavi – for 15 tetri. According to rumors, state assistance will result in the former two grape cultivars costing up to 70 tetri per kg, while the latter will cost 85 tetri. Despite the elements being very unkind to Kakheti in 2015, a bountiful harvest is expected nevertheless, with a 30 percent greater grape yield in comparison to the last year. Wineries and factories will start accepting grapes from farmers this week.
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