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Time in Yerevan: 11:07,   28 March 2024

From cancelled contracts to new investments: How winemaking in Armenia will overcome COVID-19?

From cancelled contracts to new investments: How winemaking in Armenia will overcome 
COVID-19?

YEREVAN, MAY 26, ARMENPRESS. The novel coronavirus (COVID-19) affected almost all sectors, and winemaking was not an exception in this respect. Due to the virus the domestic demand for Armenian wines declined, certain contracts in export were cancelled, and the Russian importers are expecting decline in price.

In this difficult period the Vine and Wine Foundation of Armenia is working with its partners at different directions: the Armenian wine is going to be more presented at an online platform, the ties and trust gained abroad will help to advertise more the Armenian wine in the foreign market, investments in the field continue, and new vineyards are being planted.

Zaruhi Muradyan, head of the Foundation, gave an interview to ARMENPRESS, talking about the challenges facing the sector, as well as the past and future actions.

Winemaking before the coronavirus: domestic consumption, export

“Before the coronavirus pandemic the sector was developing quite actively. Investments were being made, new vineyards were being established, new companies were being registered, and the already existing ones were working quite actively by increasing the production volumes”, she said.

Currently there are 67 winemaking companies in Armenia. “53 companies were registered in 2018, some of which already have a production in the market, the others are still preparing for their first steps in winemaking”, Muradyan said.

While making wine the Armenian companies put the emphasis on the local Armenian endemic types. She says the Armenian wines are interesting thanks to their local vine types. Some companies planted vineyards with foreign types of vines, but the experience shows that the demand for the wines made with the local types is much higher.

Through various projects the Foundation is trying to raise the rating and reputation of the Armenian wines. Active steps are being taken for developing and capturing new export markets. Last year the Armenian wine entered into three new markets – South Korea, Vietnam and Japan.

In terms of the export volumes, the first place for the Armenian wine is Russia (75% of the total export volume), the second one is the US (5.2%), the third is China (2.7%). Mrs. Muradyan says after active works for 2 years the Armenian wines in Poland have already registered success, increasing the consumption volumes. Thus, Poland is the 4th country for the export of the Armenian wine. Then comes Lithuania. Mainly the Armenian red wines are demanded in Europe.

Nearly 12 million 400 thousand liters of wine is produced in Armenia annually. Approximately 30% of it is exported, 60% is sold in the domestic market, and the 10% remains mostly in cellars or is just not sold. “The pandemic surprisingly withdrew the field from the so-called “convenience zone” and highlighted the future development directions of the sector. For instance, it was revealed very quickly that in the Armenian reality people drink wines mainly when they visit restaurants, bars. Unfortunately, wines are not used in houses with the volume we would like. However, if in 2014 just 1,2 liters of wine was consumed per capita, in 2019 it became 3,6 liters which became clear after our recent research”, she said.

Investments, new companies

Zaruhi Muradyan assures that thanks to the daily consistent actions taken in the field the investment attractiveness of winemaking has greatly increased. Repatriated Armenians are making major investments. Only in 2018-2019 more than 20 million dollars have been invested in the winemaking and viticulture.

“Last year we had investors from Switzerland, the United States who want to plant a vineyard in Vayots Dzor province. There are also foreign investors, but mostly the repatriated Armenians are interested in winemaking”, the head of the Foundation said.

Last year the Foundation carried out a monitoring of lands in Vayots Dzor. “We were interested in those community lands which have never been viewed as lands for viticulture. We have examined nearly 1000 hectares of land and 77 pieces which have a high potential for viticulture. After this project we are working with almost 15 investors. Now as well we are regularly visiting the regions, introduce the investors on the pieces of lands, are holding negotiation with some of them, and the others have already reached the process of purchasing the land. They are mainly using the state assistance programs for instance for the establishment of intensive yards”, she said.

Winemaking during coronavirus: the damages caused from the virus and the ongoing actions

From the first month of the spread of the novel coronavirus the Foundation communicated with all winemaking companies to understand what problems they may face. “Some of the companies continued the exports in accordance with the contract, although they had concerns that if the sale declines, the second group of export will not be sent. Some producers faced problem in Russia, connected with the Ruble fluctuation, they proposed to reduce the values, but this was not beneficial for our winemaking companies. Despite the problems the first group was completely exported in March-April. As for the second phase, the talks continue aimed at sending the products at a lower price. Mainly more flexible, major winemaking companies are able to reduce the price and avoid problems linked with the export”, she said.

Several importers in Europe have suspended the contracts. To solve this problem the Armenian winemaking companies are trying to boost their activity at online platform, by introducing new digital technologies for the presentation and promotion of the Armenian wines.

Zaruhi Muradyan said the consumption in the domestic market has declined as people almost do not drink wines at home. “This year we are going to implement more projects directed to the domestic demand. We have developed various programs. We will organize online trainings and will talk about more the Armenian winemaking”, she added.

She informed that last year the wine tourism was quite active. They were engaging tourists through various tour packages, and many wines were sold in this way. This year the Foundation will take actions to develop the incoming tourism so that the locals will try to spend an interesting time in winemaking factories.

 

Full version of the interview is available in Armenia.

 

 

Interview by Anna Grigoryan; Editing and Translating by Aneta Harutyunyan

 








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