MOLDOVA: Wine-makers hope to preserve county's wine industry despite deep economic crisis

Record ID: 735276

  • Title: MOLDOVA: Wine-makers hope to preserve county's wine industry despite deep economic crisis
  • Date: 16th June 2009
  • Summary: OUTSKIRTS OF CHISINAU, MOLDOVA (RECENT) (REUTERS) VINEYARDS NEAR CHISINAU VARIOUS OF PEOPLE WORKING IN VINEYARD CHISINAU, MOLDOVA (RECENT) (REUTERS) EXTERIOR OF "LION-GRI" PRIVATE WINERY VARIOUS OF WINE EXPERTS CHECKING BRANDY QUALITY WINE CISTERNS DIPLOMAS FROM INTERNATIONAL WINE EXHIBITIONS VICE-PRESIDENT OF "LION-GRI" WINERY, NELLY SONIC IN HER OFFICE SONIC'S HANDS HOLDING SPECTACLES (SOUNDBITE) (Russian) VICE-PRESIDENT OF "LION-GRI" WINERY, NELLY SONIC, SAYING: "The wine-producing industry we had before - I think it is already dead. I cannot speak for everyone, but I think it is probably dead. We are not competitive. We cannot keep our heads above water at the moment. We all have loans to pay off and we cannot make a return on the money we've invested." SHELVES WITH BOTTLES OF WINE PRODUCED BY "LION-GRI" (SOUNDBITE) (Russian) VICE-PRESIDENT OF "LION-GRI" WINERY, NELLY SONIC, SAYING: "We do not want to stop producing wine. Moldova is a country of wine producers. However difficult it may be, we will work until the end to remain a wine-producing country." VARIOUS OF WINERY AT WORK STREET IN CENTRAL CHISINAU PEOPLE ON STREETS MAN SELLING DRINKS FROM STREET STALL (SOUNDBITE) (Moldovan) PROGRAMME DIRECTOR OF THE ECONOMIC POLICY CENTRE AT THE INSTITUTE FOR DEVELOPMENT AND SOCIAL INITIATIVES, VEACESLAV IONITSA, SAYING: "Our wine producers, for the most part, are of the old Soviet type, making not very high quality wines. They have been oriented towards the Russian market and totally unable to enter other markets. At the moment I would say that our wine-making industry is in a coma. Out of 160 wine factories only 20 sell their products in the west and are built with the participation of western money. And they are doing fine now, as they did before the crisis. But most of the wine-makers are in a very bad situation and they are pulling down other industries like grape producers and bottle producers with them." PEOPLE ON STREET OF CENTRAL CHISINAU
  • Embargoed: 1st July 2009 13:00
  • Keywords:
  • Topics: Industry,Lifestyle
  • Reuters ID: LVA49K27CDPO704SOBNVJUKJAMVS
  • Story Text: The Moldovan wine-making industry dates back to the country's ancient Greek and Roman colonisers.
    The grape-growing and winemaking in the area has had periods of growth and decline but has survived through all the changing social and economic conditions of Europe's poorest country. The times of decline, such as those under 300 years of Ottoman rule and during two World Wars, have been followed by good times such as the beginning of the 19th century and during the Soviet years in the 1950's.
    The recent years have been turbulent for Moldova's wine-makers. The industry is reeling from three successive blows - a 2006 Russian embargo on Moldovan imports, now lifted, the fall of the US dollar and now the world financial crisis.
    "The wine-producing industry we had before - I think it is already dead. I cannot speak for everyone, but I think it is probably dead. We are not competitive. We cannot keep our heads above water at the moment. We all have loans to pay off and we cannot make a return on the money we've invested," said Nelly Sonic, vice-president of the "Lion-Gri" winery, one of the country's top three producers.
    Like many businesses in Moldova, a crescent of land wedged between Ukraine and Romania, ''Lion-Gri'' has become saddled with debts as it tries to keep alive a business with costly inputs - labour to tend the vines and oversee production, herbicides and a bottling plant.
    But despite all the problems, Nelly Sonic still thinks there is a future as a Moldovan wine-maker.
    "We do not want to stop producing wine. Moldova is a country of wine producers. However difficult it may be, we will work until the end to remain a wine-producing country," Sonic said.
    The Moldovan wine industry has never recovered from the blow it was dealt in 2006 when a diplomatic conflict with Russia resulted in a ban on Moldovan wine imports.
    If prior to the ban Moldova sold to Russia 180 million euros worth of wine per year, today the amount is less than 57 million euros. Sales to Europe and other countries cannot make up for this loss. Moldovan wines are not very well-known in the West and face tough competition from established local producers.
    "Our wine producers, for the most part, are of the old Soviet type, making not very high quality wines," said Veaceslav Ionitsa, programme director of the economic policy centre at the Institute for Development and Social initiatives.
    "They have been oriented towards the Russian market and totally unable to enter other markets. At the moment I would say that our wine-making industry is in a coma. Out of 160 wine factories only 20 sell their products in the west and are built with the participation of western money. And they are doing fine now, as they did before the crisis. But most of the wine-makers are in a very bad situation and they are pulling down other industries like grape producers and bottle producers with them," he added.
    Like other ex-Soviet republics, Moldova is reeling from the financial crisis, with the added difficulty that remittances from hundreds of thousands of its nationals working abroad - critical to the 4.3 billion euro economy - are down by a third. Political instability has further complicated the mix.
    But despite all the problems, local wine-makers hope that this period of decline will end and Moldova, with its warm, sunny climate and rich wine-making traditions, will produce wine which will find its way into the world's markets and contribute to the country's future prosperity.
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