14 Faces of Real Georgian Borzhomi




Finding genuine Borzhomi bottled water might not be as hard as consumers have been lead to believe.


Thanks to the government of Georgia, no less than 14 companies have the right to bottle the storied mineral water from the springs of Borzhomi, a burg of 20,000 people located 150 kilometers from Tbilisi.


So a consumer can choose one of a wide assortment of plastic and glass bottles bearing the name Borzhomi and rest assured that the bottle will contain the genuine product. Unless, of course, it is a counterfeit.


Confused? Welcome to Georgia's trademark conundrum.


During the Soviet era, mineral water was piped from Borzhomi's deep natural springs to Borzhomi bottling plants No. 1 and No. 2, then shipped out to an adoring Soviet public.


But the situation surrounding the clear, fizzy elixir became murky after the dissolution of the Soviet Union. Upstart businesses diverted pipes, set up makeshift production facilities and began to sell the local product.


Georgian President Eduard Shevardnadze finally declared the Borzhomi springs a site of strategic national importance, and in April 1997 the Georgian government conducted a tender for the rights to bottle Borzhomi.


Fourteen firms emerged with the rights to package local water and use the Borzhomi name. Now, all 14 of them bottle and sell natural Borzhomi mineral water in plastic and glass bottles, according to Slava Fetelava, the deputy head of Georgia's Anti-Monopoly Service.


Not all winners were equal, however: Georgian Glass & Mineral Water, or GG&MW, was awarded management of the government-owned bottling plants No. 1 and No. 2, as well as a license to use the wells until the year 2007. The remaining tender winners received one-year licenses, with the option to renew, to use the Borzhomi name and sell the local water.


GG&MW, which also won the exclusive right to use and licence the original Borzhomi label, is the largest producer of Borzhomi. In 1997, it bottled 128 cubic meters of water a day, while its nearest competitor, Big, bottled 115 cubic meters of water a day.


"The remaining ventures have re-equipped some of the production lines that had been switched over to produce lemonade, cooking oil or other things of that sort due to the difficult economic situation," said Livan Bagdaladze, president of GG&MW.


That has not stopped the smaller producers from receiving awards for their own Borzhomi, however. Big, for example, won first prize at the Interdrink '96 exposition, gained a quality certificate at the international Agro Asia '97 expo and a gold medal at the international Interdrink '97 competition -- where GG&MW also received a gold medal for its Borzhomi.


In the whole watery saga, the biggest elixir of all appears to be the Borzhomi name itself. According to market researchers C-Pro Production, Borzhomi remains the most popular mineral water in Russia, preferred by 46.9 percent of consumers, easily outpacing Narzan's 36.1 percent and Vera's 16.3 percent.


That popularity makes it a natural target for counterfeiters. A sizeable portion of the Borzhomi bottles on Russian shelves are allegedly bathtub mixtures.


GG&MW has undertaken an aggressive ad campaign -- "Five Distinguishing Characteristics of Authentic Borzhomi" -- that plays on public fears of counterfeit Borzhomi and also steals a march on its competitors. Real Borzhomi, the ad posters say, is sold only in glass bottles bearing the imprint of a deer.


Bagdaladze says the company has spent nearly $1 million on the campaign.


One GG&MW competitor responded with its own campaign. For its part, Big has focused on "revealing the truth -- what's really going on," according to Sergei Shatin, the general director of Big-Mos, which represents Big in Russia.


Lukoshkina and Co. -- for whom another tender winner, Murgoni MGK, bottles the water -- reported that its sales dropped 5 percent following the GG&MW campaign. Rather than launching a campaign of their own, Lukoshkina and Co.'s managers spoke individually with their customers.


"Sometimes they say: 'You know, we saw this [GG&MW] ad,'" said Vladimir Lushchikov, Lukoshkina and Co.'s wholesale service manager. "And then our managers explain that this advertisement is not exactly correct. That in addition to GG&MW, there are other firms shipping natural Borzhomi to Moscow, and not in glass, but plastic bottles."


Although GG&MW has the rights to use the original Borzhomi label -- the names, colors and drawing found on the traditional label -- other companies have challenged that as well. Lukoshkina and Co., for example, registered the design in Russia early on, and has successfully defended in Russian court the right to use the label.


Lukoshkina and Co. has also mixed up its own brand, Borzhomi New. According to Lushchikov, the water corresponds "by 99 percent" to the chemical makeup of the natural Borzhomi, and is cheaper to produce, bottle and ship than the original product. In addition to producing the Borzhomi New mixture, Lukoshkina and Co. licenses production of its artificial Borzhomi.


In order to comply with a Moscow city regulation on the sale of artificial mineral water, however, Lukoshkina and Co. bottles the water under another name -- Bonjour New -- for distributors who sell the product in Moscow.


GG&MW remains optimistic about its role in a market crowded with authorized bottlers and laboratory approximations, as well as outright counterfeits.


Mikhail Popov, the head of GG&MW's Moscow office, predicts that the other producers of Borzhomi will disappear within the next two years.


"The government wants to use us to create a monopoly," he said.


As the primary developer of the Borzhomi springs, GG&MW has received a $10 million loan from the European Bank for Reconstruction and Development and has re-equipped both of the Borzhomi bottling plants. It also purchased a glass plant in the city of Khashuri to produce Borzhomi bottles.


GG&MW's founders include the Georgian group of companies making up the Tbilisi Business Center, as well as the Baring's First NIS Regional Fund.