Randy McDonald (rfmcdpei) wrote,
Randy McDonald

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[BRIEF NOTE] The Geopolitics of Wine

Last Christmas Eve I mentioned the joys of Moldovan wine. Right now, though, consumers in the Russian Federation can't enjoy the wines of either Moldova or its fellow Black Sea post-Soviet neighbour of Georgia for what seems to be political reasons.

"Inconformity to the stipulated requirements has been revealed not only in wine and wine material but also in cognac and sparkling wine made at the above mentioned republics [Moldova, Georgia]," Russia’s chief sanitary physician and head of the Federal Service on Consumer Rights Supervision (Rospotrebnadzor), Gennady Onishchenko said in a letter dedicated to import and sale of alcohol product.

In line with the letter, Federal Service on Consumer Rights Supervision suspended all permits issued by Russia’s sanitary bodies for cognac and sparkling wine of Georgia and Moldova. Having certificates of approval of foreign origin won’t help as well, as they are no longer valid in Russia. By order of Onishchenko’s service, Federal Customs Service is to prevent the import of Moldova’s and Georgian cognac and sparkling wine to the country.

Any and all deliveries of wine/wine material of Moldova and Georgia were banned March 27; the ban on their sale was imposed just in a few days. The official reason is inferior quality of the product. The true cause could be political in nature: it is the opposition of Moldova and Georgia to Russia’s entry into the WTO.

Moldova’s and Georgian cognac account for 40 percent of Russia's respective market. The sparkling wine of Moldova covers nearly a half of the country’s market. The annual sales of cognac and sparkling wine of those countries in Russia are estimated at $75 million on aggregate.

As observed in an Associated Press article, this ban on imports risks inflicting an economic catastrophe on two countries already impoverished by rather flawed transitions from Communism and the Soviet Union. Nascent or indebted wineries might well be ruined.

The Soviet breakup hit both countries' tiny wine industries hard, and both now rely heavily on exports to Russia. Georgia last year sent 89 percent of the overall 59.3 million bottles it produced to Russia, worth about $62 million, according to government data. Moldova, meanwhile, sold 80 percent of its wine exports to Russia, about 288 million bottles, estimated at $250 million, the country's wine export association said. The wines are significantly cheaper than imports from France, Spain, Italy and countries further afield.

It's rare for geopolitics to become a do-it-yourself, but so it has in this case. I wrote in January about how the Russian Federation's policy of punishing recalcitrant risked backfiring in Ukraine, as it did in Estonia in the 1990s, by undermining those sectors of the economy and the population most closely linked with Russia and accelerating economic integration with other partners, the European Union in particular. The jury is still out in Ukraine, partly because of the inability of the European Union to respond effectively to the Ukrainian revolution, partly because of the sheer size and inertia of Ukraine. Georgia and Moldova are much smaller countries than Ukraine, though, rather closer to the scale of Estonia. In theory, if purchases of wine in non-Russian markets shot up, the impact of the Russian import ban might be lessened significantly, and the integration of these two countries with their European neighbours advanced.

All this is in theory, of course, and theory must be tested with full rigor. To this end, might I suggest that you go down to your nearest and buy a Moldovan Corten? The Corten Merlot, ridiculously inexpensive at $C7.95 in Ontario and a good inexpensive wine, comes particularly recommended from me.
Tags: former soviet union, geopolitics, georgia, moldova, wine
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