In accordance with the foreign trade portal of the National Statistics Office of Georgia, Georgia’s wine export amounted to USD 99.8 million in January to June 2022. In the same period of the previous year, the total value of Georgia’s wine export was USD 104.2 million. Therefore, in the first two quarters of 2022 Georgia’s wine export (monetarily speaking) decreased by 4.3% as compared to the first two quarters of 2021.
In the reporting period, the value of wines exported to Russia was USD 57.9 million which is 3.1% less as compared to the figure from the same period of the previous year (the value of wines exported to Russia in the first six months of 2021 was USD 59.7 million). In regard to Russia’s share in Georgia’s total wine export, it was 57.3% based on the data of the first six months of 2021 whilst it is 58% this year. Although wine export to Russia decreased by 3.1% in January to June 2022 as compared to the previous year, Georgia’s total wine export decreased even more (by 4.3%). As a result, Russia’s share in the total wine export increased by 0.7 of a percentage point as compared to the first six months of the previous year.
In regard to export of Georgian wine to Ukraine, the total value of Georgian wine export to Ukraine was USD 3.4 million in the first six months of 2021 whilst it was USD 10.2 million in the same period of the previous year. As we see, there is a solid drop of 66.6%. Ukraine’s share in Georgia’s wine export was 9.9% in the first six months of 2021 whilst this year it is only 3.4%.
Table 1: Georgian Wine Export to Russia and Ukraine in 2021-2022 (First Six Months), USD Million
Source: Foreign Trade Portal
As the data indicate, Russia’s war in Ukraine affected wine export to a certain extent which was reflected in a shrinking wine export. The most considerable drop is in Ukraine’s direction which was understandable and expected. It is likely that the decrease trend will continue in the upcoming months. It is expected that 2022 will end in a substantial decrease in wine export.
To see the full picture of Georgian wine export, let us take a look at wine export statistical data to Russia and Ukraine
Graph 1: Georgian Wine Export to the Russian Market Million Bottles (0.75L) and USD Million
Source: National Statistics Office of Georgia
FactCheck has underscored multiple times that an increase or a decrease in Georgian wine export depends precisely on the Russian factor. As we know, Russia banned the import of agricultural products (including wine) from Georgia in 2006 with the decree of its Chief Sanitary Officer, Gennady Onishchenko, under the pretext of being a low-quality product. This trade embargo resulted in a significant drop in Georgian wine export. In 2006, Georgian wine export amounted to USD 41 million whilst it almost halved and decreased to USD 29 million early in the next year.
In 2015, it was the Russian factor again that precipitated the decrease of Georgia’s wine export. That year, instability in Russia and Ukraine significantly affected Georgia’s wine exports and resulted in a 39% drop in total export whilst Russia’s share in the country’s wine export decreased by 15%. Since 2016, Russia’s share in Georgia’s total wine export is basically intact within the margin of 57-60%. According to the statistical data, the growth of Georgia’s wine export still largely depends on the Russian market despite finding alternative export destinations beginning from 2012.
Events unfolding in the aftermath of 20 June 2019 (Russia’s threat on imposing sanctions against Georgian products) highlighted yet again that Russia is an unreliable trade partner because it often uses trade relations with Georgia for political purposes. Therefore, the Russian market is not free from a political context and suffers from instability.
In regard to Georgia’s wine export to Ukraine, recent statistics are as follows:
Graph 2: Georgia’s Wine Export to Ukraine, USD Million
According to the statistical data, Ukraine’s share in Georgia’s wine export was the highest in 2012 when it reached 38%. Since 2014, wine export to Ukraine has been characterised by stability and is always nearly 10%. As mentioned earlier, there was a significant reduction of wine export to Ukraine in the first six months of this year and its share is now 3.4% of Georgia’s total exports whilst it was 9.9% in the same period of the previous year.
Russia’s war in Ukraine is yet another confirmation that the Government of Georgia should be aiming for a reduction of economic dependence on Russia. Therefore, budget funds should be channelled for finding alternative markets and further awareness raising about the Georgian wines in order to make sure that Russia’s unstable market cannot significantly affect Georgia’s wine export.