Tuesday, June 2 2020 14:09
David Stepanyan

Forecast: By the end of the year, the wine industry will decline by a  third

Forecast: By the end of the year, the wine industry will decline by a  third

ArmInfo. In the domestic market, there is a drop in wine consumption by 70 percent - from 10 million bottles to 3 million bottles. For a long time shops, restaurants,  cafes were closed. Regarding brandy, no special changes have occurred  - sales in Armenia have never been particularly high. Chairman of the  Union of Winemakers of Armenia Avag Harutyunyan expressed a similar  opinion to ArmInfo. 

"Russia has 75% share in the foreign exports of Armenian wines, where  there is a decrease in consumption and a drop in the ruble exchange  rate by 15%, respectively, with about a 2-fold fall in exports. Sales  in our other sales markets also halved. The situation is close to  critical, however, by the end of summer and the beginning of autumn -  when usually a boom in exports of wine products is recorded, we  expect export growth by 30 percent. Thus, exports and all other  related industry indicators will fall by about a third by the end of  the year, "the expert predicts.

According to Harutyunyan's forecasts, all this will naturally lead to  the problem of selling agricultural products. According to him, in  general, containers at processing plants are still 80% full. Plus,  winemakers have a significant lack of working capital for the  purchase of grapes. In his opinion, the problem will be solved by  providing by the state to processing enterprises and companies  preferential, interest-free loans, which the latter will direct to  purchase crops.

"Another and quite urgent question is what we will do with all this  crop. We will either have to produce low-quality wine from it or,  let's say, unmatured brandy. Or the state will have to provide small  companies with the opportunity to withstand alcohol and sell brandy  at least 3 years later, depriving large producers of the related  monopoly. The situation is aggravated by the expected very abundant  harvest this year. We and the government will face a serious problem  that needs to be addressed today, "the winemaker emphasized.

In general, according to his forecasts, taking into account past,  more severe crises, the field of winemaking will overcome this  crisis. And in case of combining own resources with government  resources, solutions will be found. In this light, Harutyunyan  considers state assistance to villagers producing grapes as a  priority issue. Complex solutions are needed. The main among them is  the development and adoption of antitrust legislation allowing to  process grapes into alcohol and age for at least 3 years, with a  subsequent sale to everyone, not just large companies.

According to Harutyunyan, this will make it possible to process all  low-quality crops into alcohol, which over time will only increase in  value. However, in this case, it will apparently be impossible to  sell next year the crop procured this year. In this light, there is a  need for exemption from VAT on containers purchased by processing  companies for the storage of alcohols and other concentrate. The  state assistance is also vitally important in the creation of a  storage container fund through leasing or other instruments. 

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