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. Last Updated: 07/27/2016

Georgia's Wine Industry Adjusts to Russian Ban

ReutersLocals in Signakhi, a Georgian village located 115 kilometers southeast of Tbilisi, celebrating the grape harvest.
CHUMLAKI, Georgia -- When Alexander Ruadze starts raking his shovel through the steaming pool of fermenting grapes, the pigs in the nearby pen begin squealing. They know what's going to be thrown their way: the grape skins and stems left over from winemaking.

Georgia may be one of the few nations in the world where even the pigs are allowed a tipple once in a while.

Wine is the symbol of Georgia, as much as vodka is the emblem of Russia. So when Moscow banned Georgian wine last spring, saying it had fallen below government health standards, this nation of 4.5 million saw it not only as an economic attack but as a personal insult.

Yet Georgians are saying gamely that the Russians -- like the Persians, the Mongols and the Turks before them -- can't stamp out this country's 8,000-year-old romance with the vine.

"This year, we sold as much wine as two years ago, not as much as last year, but as much as two years ago," Georgian President Mikheil Saakashvili said. "The wine region has been not only salvaged, but didn't feel even half of the heat that people expected it to feel."

Still, the Russian ban was a stunning blow. Wine accounts for 10 percent of Georgian exports and last year Georgia sent more than 65 percent of the 59.3 million bottles produced to the Russian market, worth about $62 million. This year's figures aren't in yet, but forced off Russian supermarket shelves and menus, the Georgian wine industry lost serious ground, winery officials said. Many farmers, fearful of what lies ahead, are starting to replace vineyards with peach groves, whose produce fetches a higher price.

Georgians and many Kremlin critics say the ban is revenge against the young and energetic Saakashvili, who came to power through the 2004 Rose Revolution, a mass uprising that overnight took this strategically located land out of Moscow's orbit.

Saakashvili adopted a pro-Western course, pledging to bring his nation into NATO and, someday, the European Union. He invited in U.S. military advisors to train the military, and U.S. President George W. Bush made a congratulatory visit in 2005.

Moscow didn't stop at wine; it also banned popular Georgian mineral waters and citrus fruits. Last month, after a spy scandal between the neighbors, the Kremlin severed all transport and postal links to Georgia and started rounding up Georgians it said were working illegally in Moscow and deporting them. Analysts say the knock-on effect of the economic sanctions could cut 1.7 percent off of Georgia's 6.2 percent gross domestic product growth.

"We can't understand this," Georgian Foreign Minister Gela Bezhuashvili said. "We are a nation of toastmasters, after all. We are a pleasant people."


Shakh Aivazov / AP
Men drinking wine during a harvest festival in Signakhi, a village in Kakheti.
Georgia has tried aggressively to seek out new markets for its dry, red Saperavi and semi-sweet Kindzmarauli (a favorite of Stalin), particularly in the United States and Asia. The wine industry also hopes to boost sales in more traditional markets such as Ukraine and Kazakhstan.

"The taste of freedom ... banned in Russia," reads one of the billboard promotions of Georgian wine along a Ukrainian highway.

Gela Ruadze, deputy director of the Alaverdi winery in Georgia's eastern Kakheti region, shrugged his shoulders when asked how this five-year-old business was faring. Russia had been its biggest market, but the winery is now depending on Ukraine and trying to make forays into the United States, Germany, Japan and China.

"It's always difficult to find new markets," he said while giving a tour of the company's gleaming Italian wine presses and temperature-controlled containers in the village of Chumlaki, about 100 kilometers east of the capital Tbilisi. "But without wine, Georgia wouldn't be Georgia, so we are compelled to try."

Wine is life in Kakheti, a region crisscrossed by vineyards where some 80 percent of the population is involved in the industry. There is little else here; men gather in groups along the roadside, smoking and talking to pass the hours. Elderly women in head scarves sell chunks of freshly butchered meat or local treats such as churchkhela, a candy filled with walnuts and covered in dried grape paste, to the passing traveler. Roaming pigs occasionally hold up traffic.

"Wine is who we are," said Zauri Kartlelisvhili, 65, who proudly showed off the 500 liters he had made for himself. He stores the rich, aromatic wine in a traditional clay pit entombed in the foundation of his two-story house; the family sleeps on the floor above. Throughout the year, it will be scooped up gradually, poured into clay jugs and set on the table. Some might also be sold, poured into simple plastic bottles for the unfussy Georgian customers.

To win over new markets, Georgians are replacing some of their centuries-old techniques with updated Western equipment; they have also turned to foreign investors. A big irony of the Russian ban is that many investors are Russian, said Nodari Kalashvili, owner of the Old Winemakers Shop in Tbilisi.

Wineries are also trying to draw attention to their drier and more sophisticated bouquets, in an attempt to dispel the reputation earned by focusing for decades on sweet wines to tempt the Russian palate. The country has 500 grape varieties, the wine association said, so there is room to experiment.

"Theoretically, they will find new markets, but realistically it is not so easy," Georgian economist Nico Orbelashvili said. "In the long term, it could even have positive effect, but that is in the long term."

Taking a break from his work on a recent weekday, Alexander Ruadze took a seat at a long table crowded with kebabs and warm bread. There he filled small glasses of red Saperavi for his guests, who drank it Georgian style, downing it in one gulp and getting a refill after each toast. The first toast is always to peace in the world.

This time, with relations with Russia at an all-time low, the Georgians added a special twist. "To peace with Russia, our neighbor and old friend. ... May we drink wine together again," said Ruadze's childhood friend, Andro Dzhokhadze.