While Admitting Georgian Soft Drinks, Russia Fends off Water, Wine And Brandy
10 May, 2012
While Admitting Georgian Soft Drinks, Russia Fends off Water, Wine And Brandy

Georgian soft drink has successfully landed at the Russian market but mineral water, wine and brandy still face obstacles.


While  Sarajishvili Company, the legal assignee of Davit Sarajishvili - the first brandy company in the South Caucasus, established in 1887, and exclusive supplier of the Kremlin historically throughout the entire Soviet past as well as one of the key providers of Tsar’s Court till its downfall, strives to get back to Russian  market after a 6-year interval of trade embargo with

no success, Georgian soft drink produced by beer breweries Natakhtari and Zedazeni with less impressive  backgrounds successfully entered the market that was prohibited for Georgian products since 2006.

Russia imposed trade embargo on Georgian agricultural produce,  wine and water under alleged sanitary reasons in 2006. As a consequence, Georgian wine producers depending on Russia by roughly 90% of export, barely survived, while Georgian total export shrunk by 103%. Georgian government recommended to focus on other less risky and more reliable markets including EU and the US. However, Georgian companies still long for big and familiar Russian market where they need less advertising.

In 2011, willing to enrolls in the World Trade Organization (WTO) after 16 years of lingering, Russia turned milder towards Georgia, already the WTO member that could veto Russia’s WTO entry and declared, it would open up its market to the companies that would meet Russian lab tests. Meantime Georgia voted in favor of Russia and the latter joined WTO by the end of 2011. Georgian experts hoped that Russian membership would reopen Russian market to Georgia as WTO prohibits trade embargo between its member states.

“Russia’s enrolment in WTO does not mean Russian market will open automatically for Georgian wine and Borjomi,” Genadi Onishchenko, top official of Russian Sanitary Service said on November 8, 2011, in the eve of official endorsement of Georgian-Russian agreement in Geneva on November 9. And he kept promise. However his office appears somewhat selective toward Georgian companies: some with probated certificates and awards cannot enter Russian market, while others with relatively moderate producing history and certificates can.

IDS Borjomi Georgia, producing mineral water Borjomi the most demanded water during the Soviet time in Russia and holder of numerous international awards and certificates, as well as Sarajishvili brandy producer [with similarly reputable certificates and awards] have  appealed to Russian sanitary office in summer and fall of 2011 respectively, but they haven’t succeeded as yet.

According to Davit Abzianidze, General Technologist of Sarajishvili Company, Russian side does not refuse actually but it set out another provision: Onishchenko’s office will select its trustee lab in Georgia that will test Sarajishvili’s product, which,  by the way, had been certified by Russian certification body before the embargo.

“Russia claimed they found pesticides in Georgian wine, but they could not find any in our brandy.It is impossible, since brandy is based on spirit and there was no sanitary reason for keeping our product off the market but…now they say neither no nor yes and things are at the level of mailing. Yes, they want to arrive here to find a lab for testing but nobody showed up as yet and nobody can say when someone will come here,” Abzianidze told Georgian Journal.

Some wine companies have undertaken efforts to find out how to knock at Onishchenko’s door – they prefer to wait and see what happens as they do not trust the Russian market after their bitter experience.

Obviously, Georgian soft drinks are the Kremlin’s favorites.

Drinks based on the syrup invented by famous Mitrofan Laghidze in the past century, was produced by a Russian company based in Tikhvin in Russia, regardless the embargo.

“Embargo did not affect us at all because the Madrid convention [the Madrid system for the international registration of marks] protected us,” Nana Chakhia, General Director of Laghidze Waters, current holder of the license for Laghidze fizzy water, said in the interview with GJ. “We started export of our syrup since 2004 to Tikhvin water plant and still go ahead without interruption. Our syrup was the only product which used to enter Russian market officially.”

Russia does a favor to the government-affiliated business too. Natakhtari beer brewery owned by the Turkish Efes Beer International at the moment and founded by Iago Chocheli, brother of Tsezar Chocheli, the incumbent governor of Mtskheta-Mtianeti region of Georgia, in 1991 succeeded to export its soft drinks to Russia a year ago.

Natakhtari was founded by JSC Lomisi in Akhalgori [now the territory occupied by Russia since the August war of 2008]. In 2005 Lomisi set up another beer brewery in Natakhtari near Tbilisi and started producing soft drinks too. Lomisi brewery continued operation even after Akhagori was occupied by Russian troops in 2008. Turkish Efes Beer International acquired 100% of Natakhtari in 2008 and managed to start export of sift drinks to the southern regions of Russia since 2011 in spite of latent governmental crackdown on Georgian business pressing them to target export markets others than Russia. Natakhtari got all due certification and approval of otherwise resentful Russian sanitary body without much quibbles.

“Actually, it was the initiative of Russian distribution companies,” Kakha Magradze, spokesman for Natakhtari, told GJ.

Iago Chocheli set up another beer brewery Zedazeni recently; it also produces soft drinks. The company entered the market by end of April and succeeded to start export of soft drinks immediately to Russia without much ado with Onishchenko’s office.

According to Vera Kobalia, Minister of Economy of Georgia, Zedazeni export deal with Russia is a result of an agreement between Zedazeni and Russia.

“Georgian government never prohibited export of Georgian products to Russia, it was Russia who imposed embargo on us,” Pirweli news agency has reported her statement.

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