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. Last Updated: 07/27/2016

Moldova Wonders Where to Sell Wine

ReutersTourists driving through the world's largest wine cellar, in the village of Milestii Mici, not far from the capital, Chisinau.
MILESTII MICI, Moldova -- A visitor on foot would need far more than a day to tour the entire underground city housing the world's largest collection of wines -- about 2 million bottles -- in Moldova.

But the director of Milestii Mici wonders just who will buy any of that stock, with Russia slow to lift a ban it slapped on all wine imports last year from this country, wedged between Ukraine and Romania.

Russia said the ban on Moldovan -- and Georgian -- wine was linked to concerns over adulterated products that could harm consumers. Moldovans and Georgians believe the ban sought to punish their countries for a drive to boost ties with the West.

Moldovan President Vladimir Voronin and President Vladimir Putin agreed last November to scrap the ban on wine, restoring an economic lifeline to Europe's poorest country.

Before the ban, alcohol sales accounted for one-quarter of Moldova's exports, and Moldovan wine had a 60 percent share of the Russian market -- a gap now filled by other producers.

But Putin's pledge to toast the New Year with a glass of Moldovan champagne came to nothing. Moscow failed to restore imports, instead dispatching a steady stream of customs and health officers to conduct quality checks.

"I don't think anyone knows when Russia will lift the ban on our wine exports," said Milestii Mici's director, Mihail Maciuca.

After Russian authorities pulled Moldovan wine from store shelves and destroyed hundreds of thousands of bottles, Moldova's president acknowledged that there had been isolated instances when production standards fell short. But producers -- and the president -- ardently defend the quality of Moldova's current output. "We cannot agree that Moldovan wine is of poor quality or that it is harmful to health," the president said at the opening of a major exhibition of wine producers last month.

Moldovans say the ban was prompted by Moscow's irritation at moves by Voronin to turn away from Russia and seek European Union membership. Georgia pursues the same aim.

Voronin accuses Russia of abetting separatists who have declared their own state in Moldova's self-proclaimed Transdnestr republic.

Voronin said Moldova wanted to lessen its dependence on Russia, which previously accounted for 80 percent of exports.

Western countries now buy 25 percent of Moldovan exports, led by different types of cabernet, merlot and pinot noir, with new customers in Britain, the Czech Republic, Germany, Poland, Romania and the United States.

"The Russian ban was a shock to the entire industry. Whole plants came to a standstill," said Gheorghe Cozub, head of the union of Moldovan wine exporters.

Cozub said Moldova exported 300 million bottles in 2005, with revenues of $350 million. Last year that was halved and economic growth slowed to 4 percent from 7.5 percent in 2005.

Sergei Borets, head of Acorex-Vin, one of Moldova's most prominent producers, estimates losses from the embargo at $10 million.

Milestii Mici has fared better than many competitors. It made a name in the West with an entry in the Guinness book of records for its vast collection, 80 meters below ground. Its exports, which account for 90 percent of production, are aimed at markets in Europe and Asia. "It is not our aim to sell wine at all costs, whatever the price," Maciuca said. "Selling to the West allows for higher profits given the same volumes, or even less."