(IMI) OVERVIEW OF ARMENIA'S WINE SECTOR

UNCLAS SECTION 01 OF 03 YEREVAN 002319 SIPDIS COMMERCE FOR 4201/ITA/IEP/OEERIS/BISNIS/EHOUSE EMBASSIES - PLEASE PASS FCS E.O. 12958: N/A TAGS: KTDB BBSR BEXP BTIO AM SUBJECT: (IMI) OVERVIEW OF ARMENIA'S WINE SECTOR -------------- SUMMARY -------------- ¶1. This cable provides a brief overview of Armenia's wine sector for those considering trade and investment opportunities in Armenia. It also includes a list of key contacts. For more information contact the BISNIS representative or the Economic and Commercial Officer at the U.S. Embassy in Yerevan. End Summary. ¶2. In Armenia's growing wine industry local producers are searching for foreign partners to find new markets for their products. Some of them need to upgrade their facilities and are planning to purchase modern bottling and packaging equipment. Many of them need investments in working capital due to the seasonal nature of the industry. U.S. exporters may find many marketing possibilities as the wine sectors expand. -------------- WINE INDUSTRY OVERVIEW -------------- ¶3. Armenia is one of the world's ancient grape growing and processing societies: Armenian winemaking dates back at least 3,000 years. Industrial winemaking began in Armenia during the 1870s. During the Soviet period Armenia expanded and improved its wine production and Armenian wines won a number of grands prix and dozens of gold and silver medals in international wine tasting events. But the collapse of the Soviet Union heralded a collapse in Armenia's wine industry. There is less total area of vineyards under cultivation and less total wine production today than twenty years ago. After 1995, the state began privatizing Armenia's wineries; fourteen out of thirty wineries remain as joint stock companies. Recently, winemakers have begun recovering vineyards and establishing new wineries. The traditional assortment of Armenian wines is returning to the market and new labels are being established. According to local experts, wine making is now one of the most profitable branches of Armenia's economy with excellent potential for expansion. ¶4. Currently, according to different estimates there are 14,000 hectares of vineyards in Armenia. Approximately 30-40 percent of these are used to cultivate grapes reserved for wine making, including the following: WINE TYPE GRAPE TYPE Select white table wine: Voskehat, Banants Ordinary white table wine: Voskehat, Rkatseteli, Mskhali, Garan Dmak Table red wine: Areni, Kakhet, Saperavi Ordinary red table wine: Saperavi, Kakhet, Cabernet Select red table wine: Muscat, Voskehat, Arevik, Kakhet, Areni Ordinary desert wine: Muscat, Kakhet, Saperavi Fortified dessert wine: Voskehat, Voskahet The main grape growing and winemaking areas in Armenia are the Ararat valley, including the provinces of Ararat (the towns of Artashat and Vedi) and Armavir (the towns of Echmiadzin and Armavir),the northeast region (Ijevan, Tavush province),Aragtsotn province (the town of Ashtarak and Byurakan village),Vayots Dzor province (villages of Areni, Getap, town of Yeghegnadzor,) and Syunik province (Meghri). ¶5. The largest grape growing and processing center in the country is the Vayots Dzor province. The province is famous for its Black Areni variety, which makes red table and semi-dry wines. As wine making has become one of Armenia's most profitable businesses, local farmers are steadily increasing cultivation of grapes in the province. There are now several wineries in Vayots Dzor province. In March 1999, the last state- owned winery was privatized. A number of new wineries have since opened. ¶6. Areni Joint Stock Company is the first private winery in Vayots Dzor. Established in 1994, it produces a wine from the special Areni grape variety. The winery has participated in a number of trade shows and exhibitions both in Armenia and abroad. More recently established private wineries in Vayots Dzor include Ginetas, producing a dry red table and a semi- sweet, Van 777, Kimley's and Gatnatun. Ginekar Company produces wine kept for aging to be sold outside of Armenia in luxury hotels. ¶7. Armenia's largest wine enterprise is Getap. It is a part of the Ararat province-based company Vedi-Alko JSC, which is the leading producer of wine and vodka in Armenia. The company was established in 1999 as a result of a merger of two large Armenian wineries Vedi and Getap, and the largest vodka producer Vedi llc. Currently, it produces more than 30 varieties of table and dessert wines, sparkling wines, and vodkas. The company's Vernashen semi-sweet wine is one of the most popular brands in Armenia. Vedi-Alko exports its products to Russia, Ukraine, France, the United States, United Kingdom, and Poland. ¶8. Established in 1976, the Ijevan Winery became an open joint stock company in 1995. This winery has successfully converted a Soviet winery into an efficient modern shop. The winery is equipped with modern grape processing and wine bottling lines imported from Germany. It produces several types of wines, including dessert red, semi-dessert, white dry table, red dry table, and rose dry table. In 2003, the company's sales increased six-fold to 234,000 bottles from its 1999 level. The company exports its products to Russia, Japan and the United States. ¶9. Established in 1877, the Yerevan Ararat Cognac-Wine- Vodka Factory is one of the oldest enterprises in Armenia. Nationalized in 1921, the enterprise grew to become the Ararat trust, Armenia's central vintage wine, cognac and vodka production center, whose sales accounted for 25 percent of Soviet Armenia's state revenue. Privatized in October 1996, the Yerevan Ararat Wine Factory recently became part of a large Armenian company Multi Group. Currently, the company produces various vintage Armenian wines and aged Armenian cognacs. The enterprise owns a rich stock of wines, wine materials, Armenian cognac and cognac spirits. -------------- STATISTICAL INFORMATION -------------- GRAPE PRODUCTION (tons) YEAR VOLUME 2000 115,800 2001 116,500 2002 104,000 2003 81,600 WINE PRODUCTION (thousand liters) YEAR VOLUME 2000 3,620 2001 6,390 2002 6,541 2003 2,042 SOURCE: Armenia's National Statistical Service -------------- MAJOR WINE PRODUCERS -------------- Areni jsc Contact: Rafayel Simonyan, Director Areni village Vayots Dzor province Tel: (374-81) 22-222 Fax: (374-1) 58-79-28 Getnatun LLC Contact: Nairi Baghdasaryan, President Yerevanyan Ave. Yeghegnadzor Vaots Dzor province Tel: (374-81) 25-565 Fax: (374-1) 58-79-28 Ginekar LLC Contact: Yervand Sardaryan, Director Aghavnadzor village Vayots Dzor Province Tel: (374-81) 22-271 Fax: (374-1) 58-79-28 Ginetas Contact: Vardan Khalatyan, Director 39 Levonyan street Yeghegnadzor Vayots Dzor province Tel: (374-81) 20-160 Fax: (374-1) 58-79-28 Kimley Contact: Mikayel Grigoryan Areni village Vayots Dzor province Tel: (374-81) 22-222 Fax: (374-1) 58-79-28 Van 777 Contact: Mihran Manaseryan, Director Taperakan village Ararat province Tel: (374-9) 42-13-07 Fax: (374-1) 58-79-28 Vedi-Alco Contact: Manvel Ghazaryan, President Vedi village Ararat province Tel: (374-1) 28-80-20 Fax: (374-1) 28-80-20 E-mail: info@vedi-alco.am www.vedi-alco.com Ijevan Winery JSC Contact: Avetis Galstyan, president 9 Yerevanyan street Ijevan Tavush province Tel/fax: (374-1) 22-13-47 Fax: (374-1) 26-81-71 E-mail: iwf@netsys.am www.ijevanwine.com -------------- KEY CONTACTS -------------- U.S. Department of Agriculture's Marketing Assistance Project 74 Teryan street, Yerevan, Armenia Tel: (374-1) 52-55-62 Fax: (374-1) 58-79-28 E-mail: map@usda.am Web site: www.usda.am Armenian Development Agency Contact: Vahagn Movsisyan, Executive Director 17 Charents street Yerevan-25 Tel: (374-1) 57-01-70 Fax: (374-1) 54-22-72 E-mail: info@ada.am GODFREY