Government of Armenia charges Vedi Alco to pay for procured grape to winegrowers

ArmInfo. Newly appointed Agriculture Minister of Armenia Ignaty Arakelyan traveled to Vayots Dzor region Wednesday and met with the local winegrowers that informed the minister about their problems. In particular, the winegrowers complained that Vedi Alco Company failed to pay them for the grapes procured a year ago.

According to the Agriculture Ministry press-office, the Government charged the company to redeem its debts to the winegrowers in the short run.

The minister said the processing companies have to enter the market with competitive prices and need less expensive agricultural products. In this light, the minister urged steps to increase the harvest and reduce the cost value of grape. Arakelyan suggested close cooperation between the agriculture support center and private investors to introduce up-to-date technologies in the gardens and upgrade the efficiency of land cultivation.

Vedo Alco Company owes 140 million drams to farmers who took the streets earlier this month. Earlier, ex prime minister Hovik Abrahamyan visited the region and promised to settle their problem. However, the problem has not been settled and the farmers resorted to protest actions again.  According to ArmInfo's Ranking of Armenian Enterprises, net profits of Vedi Alco CJSC for 2015 totaled 77.7 million drams with a 3.2-fold growth year over year. Proceeds from sales fell 35% in 2015 to 1.7 billion drams, with the cost of sales falling 42% to 1.1 billion drams. As a result, pre-tax profit totaled 585.3 million drams with a 9% year-over-year decline. Sales costs fell nearly threefold to 71.7% in 2015.  Assets fell 12.2% to 4.3 billion drams.

According to the National Statistics Service of Armenia, in Jan-Aug 2016, agricultural produce totaled 509.9 billion drams ($1.1 billion ) with a 4.1% year-over-year growth, amid 2.4% growth of economic activity.