Sour grapes: Georgian wine banned

Russia's ban on Georgian wine.

The people of Georgia believe that it was here, in their sun-baked eastern valleys under the towering ridges of the Caucasus Mountains, that man first turned the humble grape into wine. They called it gvino and fermented it in clay pots buried in the earth. Archeological finds suggest that winemaking may have begun here as early as 8,000 years ago, long before moving to Europe.

Having survived for millennia on the fringes of great empires, the Georgians are fiercely proud of their ancient traditions. Modern vintners may have replaced the clay pots with stainless steel fermentation vats, but they still use the original grape varieties unique to their homeland, such as Saperavi and Mtsvane, to produce their deep red and crisp white wines. So when Russia, traditionally the single-largest consumer of Georgian wine, banned the fruity nectar as unsafe earlier this year, many Georgians considered the move a slap in the face. “They could not have chosen a more hurtful way to attack Georgia,” says Gia Kurdovanidze, the commercial director of Wine Company Shumi Ltd., one of the country's leading vintners. “Georgia is the birthplace of winemaking, and we consider it a sacred tradition. To say our product is faulty is a deep insult.”

Health authorities in Russia say the embargo was imposed after pesticides and other impurities were discovered in Georgian wine. But Georgians believe the ban is punishment for the country's new course under President Mikheil Saakashvili, one of the leaders of the 2003 Rose Revolution that ousted former president Eduard Shevardnadze.

Part of the Tsarist-era Russian empire and later the Soviet Union, Georgia has long been considered by Russia as part of its “near abroad”–a traditional zone of influence that stretches from eastern Europe to central Asia. But since coming to power, Saakashvili has steered his country of more than 4.5 million away from Moscow, building close ties with Washington and seeking to join NATO. Tensions between the two nations have reached fever pitch since the detention in late September of four Russian officers in Georgia on spying charges. Despite Georgia's release of the officers, Russia has imposed harsh sanctions on its small southern neighbour, including the severing of all travel and postal links. Ignoring western calls for Moscow to back away from sanctions, state-controlled gas giant Gazprom announced plans this month to more than double gas prices next year for Georgia, which is almost entirely dependent on Russia to meet its energy needs.

For the Georgian wine industry, the dispute has been life-threatening. Georgia last year sent more than 65% of the 60 million bottles of wine it produced to the Russian market, worth about US$63 million. Export figures for this year have not yet been released, but some officials estimate that Georgia, already wracked by deep poverty, has lost more than US$35 million in much-needed revenues because of the ban.

Now, in order to survive, Georgia's vintners are, like their government, looking westward, hoping they can introduce their country's unique wine varieties to new markets in North America and Europe. “Of course, [the ban] has done a lot of damage, especially for companies that were completely dependent on Russian exports,” says Zurab Ramazashvili, owner of the Telavi Wine Cellar. “Russia is the traditional market where our wines are best known. It is forcing us to adapt and look for new markets, especially in the West.”

The Telavi Wine Cellar lies in the heart of Georgia's eastern province of Kakheti, a region criss-crossed with vineyards where nearly everyone works in the industry. Walking through the rows of his vineyard on a bright autumn day, Ramazashvili tries to sound optimistic about the future. “In the long term, this could actually be good for us,” he says. But for now, his company and others are suffering. In 2005, the Telavi Wine Cellar sold nearly 2.5 million bottles of wine in Russia, about 70% of its output. With the Russian market lost, Ramazashvili predicts that this year he will sell only 1.7 million bottles in total.

The embargo began in March when Russia's chief sanitary doctor, Gennady Onishchenko, ordered the customs service to stop allowing imports of Georgian wine because new tests had shown banned substances, such as DDT, in 60% of Georgian alcohol. A similar ban was imposed on alcohol from the former Soviet republic of Moldova, another long-standing source of wine in the region and a country whose leaders have also pursued closer ties with the West. Borjomi, a famously pungent Georgian mineral water popular in Russia, was also banned. Authorities ordered the seizure of all Georgian and Moldovan alcohol already in Russia; as of August more than 2.4 million litres of wine and spirits from the two countries had been destroyed. Authorities in Moscow have given no indication when the ban might be lifted.

Georgian winemakers aren't disputing that much of their product being sold in Russia as Georgian probably was harmful. But they say the wine wasn't Georgian to begin with. “A lot of it, probably more than 50%, was falsified Georgian wine produced in Russia,” Ramazashvili says. The United Nations Food and Agriculture Organization estimates that nine out of 10 bottles sold internationally as Georgian wine are alcoholic cocktails of spirits, colouring and flavouring.

With UN assistance, the Georgian government has managed to crack down on domestic counterfeiters by instituting an appellation labelling system, which provides details about where a wine comes from, the grapes used in it and how it was produced. Appellations have also been registered with the World Intellectual Property Organization, giving Georgian varieties the same status as wines such as Bordeaux or Rioja. A number of wine companies–including Georgian Wine & Spirits (now owned by French drinks giant Pernod Ricard), Shumi, Tbilvino, Telavi Wine Cellar and Teliani Valley– have modernized their facilities and won some international recognition.

Still, Georgian vintners know they face an uphill battle breaking into already-crowded western wine markets. “There is a lot of competition, and Georgian wine is not very well-known,” says Kurdovanidze of Shumi wine. Proper marketing, says Telavi Wine Cellar's Ramazashvili, will be key. “The first thing we need to focus on is brand recognition,” he says. “We need to help people understand that there is this country that has been making wine since ancient times and they need to try it. They also need to know that what Georgia is producing is something completely new and different to them, using grape varieties that are unique.”

One major hurdle is that even those who do know Georgian wine tend to associate it with the sweet and semi-sweet varieties popular in Russia, not the dry wines more fashionable in the West. Despite a long history of producing robust, dry wines, the Georgian wine industry was heavily skewed toward thin, sweet varieties during the Soviet era. (Joseph Stalin, who was Georgian, favoured sweet wines, setting the tone for Georgian wine production until long after his death.) The government has promised funds for marketing campaigns and has already begun advertising Georgian wine in Ukraine, whose leaders have also incurred Moscow's wrath by seeking closer ties with the West. “The taste of freedom: banned in Russia,” reads one of the billboards promoting Georgian wine in Ukraine.

Wine experts believe Georgia can eventually break into the western market, but only if the country's producers avoid the temptation of trying to pitch their product as an alternative to New World wines from the Americas, Australia and South Africa. Frédéric Julia, a French expert who has advised Georgian winemakers on behalf of the UN, says Georgia needs to carve out a niche among connoisseurs. “Georgia has no interest in competing with countries that have much higher production and more infrastructure,” he says. “Georgia provides unique and very satisfying wines. I regularly bring Georgian wine back to France and my colleagues here are stunned by the quality.” As the local toast goes, “Gaumarjos!”