Page 48 - bne Magazine Apri20

48 I Southeast Europe bne April 2020
Historic wines in a changing world
Clare Nuttall in Glasgow
The Moldovan village of Purcari has been at the centre of the country’s wine industry for centuries. Today, Purcari Wineries is the country’s biggest wine exporter, and is expanding into markets in Central Europe and beyond.
The Bucharest Stock Exchange (BVB)- listed company’s chief operating officer (COO) Eugen Comendant talks to bne IntelliNews about Purcari’s international expansion – and the impact of the coronavirus epidemic, climate change and the East-West standoff in the region.
Since its Bucharest debut in February 2018, when it became the first ever Moldovan company to hold an IPO, Purcari has been on an intensive modernisation and expansion drive.
The investments at Purcari, which include a new bottling line that will significantly increase capacity, are due to be completed this year. Purcari has expanded its warehouse capacity, and made further investments to improve the way wine is dispatched. The company is considering further upgrades at its other wineries, but a final decision has yet been made.
In terms of its sales geography, post- IPO the company has continued with
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its expansion plans in the Central
and Eastern Europe (CEE) region. Its primary market – and second home market – is Romania, which accounts for around 40% of its sales, compared with around 20% in Moldova. These are followed by Poland (10%), China (7%), the Czech Republic and Slovakia (5% each) and Ukraine (3%).
“Purcari has maintained the growth that it promised investors. Our strategy states that we want to be champions in Central and Eastern Europe, and that’s where we focus most of our efforts, but at the same time we are addressing other markets
in Western Europe and beyond,” says Comendant.
Further afield, not just Purcari but probably any big winery sees China as an important market, Comendant tells bne IntelliNews. “Yes, it comes with various challenges, the most recent
of which is the coronavirus, but there are others such as China’s very large geography, with many regions that have to be tacked separately, differences
in consumer behaviour and the way wines are sold. We need to adjust to the particularities of this market but we are already seeing success and will continue to focus on China.”
Like most Moldovan wineries, Purcari has reoriented towards Western markets since a series of Russian embargoes cut winemakers off from what was previously Moldova’s largest export destination. This was helped by Moldova’s signing of an Association Agreement and Deep and Comprehensive Free Trade Area (DCFTA) agreement with the EU in 2014.
Moldova is one of the states on the front line of the new standoff between East and West. The small country is literally divided, with its eastern flank controlled by the internationally unrecognised government in Tiraspol, backed by Moscow, while Chisinau is torn between movement towards EU integration and its history in the Russian sphere of influence.
Comendant says that while Purcari
still “keeps Russia as an option, never dismiss[ing] it completely”, the company “would be careful in how we develop that market again because [we] want to be sure no risk comes with the growth of sales.”
Another geopolitical development
in the region with implications for Moldovan winemakers was Russia’s annexation of the Crimea in 2014.
At a stroke this saw the loss to Ukraine of half of its approximately 60,000 hectares