Page 50 - BNE_magazine_bne_September 2019

50 I Southeast Europe bne September 2019
Russia remains the biggest market for Georgian wine exports with a 58% share in 2018.
Georgia in vino vertitas
bne IntelliNews
The Georgians like to describe themselves as the “cradle of wine” with a rich, 8,000-year history
of wine-making. Wine was produced and drunk in Tbilisi before the Roman Empire was founded and today it remains home to over 500 unique grape varieties.
For anyone that has spent time in the former Soviet Union then the most famous names such as Saperavi and Mukhrani will already be familiar. These were justly famous as some of the best wines in the communist block, but have only recently begun to be recognised in the West as the Georgian wine associa- tion attempts to break open new mar- kets. Today the bulk of Georgian exports still go to Russia.
Having interrelated production process- es, several large wine-making companies also produce brandy. While the history of Georgian brandy only begins in the 19th century, The country is already the 10th-largest exporter of brandy globally.
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“In 2018, 245,000 tons of grapes were processed by over 300 wine-making companies, quite large for a country with a small domestic consumption base. So it’s not surprising that some 85% of the wine and spirits sector’s revenue stream comes from exports, making it highly dependent on external markets,” Eva Bochorishvili, head of research at
In 2017, the sector’s net profit margin stood at 26.0%, far above the 8.4% recorded for the total business sec-
tor, Bochorishvili reports. The sector’s revenue almost doubled during 2013-18, reaching GEL867.9mn ($291mn), with external demand being the main driver of revenue growth, as domestic sales stagnated.
“We expect 2019 to be another record-breaking year for the sector, with revenues set to increase up to 10% year-on-year”
Galt & Taggart, the Georgian investment bank, wrote in a report on the country’s wine industry that was released at the end of July.
For a poor small country that lacks most natural resources, the Georgian wine and spirits business is one of the most profitable sectors in the country and is already a major export.
Wine is Georgia’s fourth-largest export and brandy is the eighth-larg- est with 5.9% and 3.2% of the total figure respectively. Wine and brandy exports from Georgia increased at a compound average growth rate (CAGR) of 6.0% to $305.3mn during 2013-18, or 65mn litres of wine and 32mn litres of brandy exported in 2018.