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Moldovan wines - between reality and statistics
Iurie Gotisan, January 31, 2006

The wine industry of Moldova is traditionally the strongest sector of national economy and unquestionably the branch that helped the country gain an international name. The wine was one of the very few Moldovan products that registered and registers a surplus trade balance, with the wine exports exceeding 30 percent of the overall Moldovan exports, even in the period of transition from order economy to the market economy. The surface of vineyards in Moldova is evaluated at about 150,000 hectares, of which 45,000 hectares are fields in auxiliary farms. They cover 6 percent of agricultural fields and ensure about 35 percent of the value of production of the agri-industrial sector.

The wine export in Moldova registered a 24-percent growth in the past years, while the world wine export grows by about 8 percent a year. Even more, the statistics say that Moldova ranks the 11th place in the top of the largest wine exporters in the world, while the Moldovan wines hold 1.2 percent of the world wine export. The vine growing and wine making industry ensures the economic security of the country and financial means needed to raise state budget revenues. According to preliminary statistics, the wine exports grew by about 14 percent in 2005.

Unlike other countries, large grape growers and wine producers, Moldova sells only 10-11 percent of the overall volume of wines for sale on domestic market, while the largest quantity goes to the export. On the other hand, we must be aware that the promotion of export is difficult because of many tariff barriers, protectionist measures that often have a non-tariff nature, which are in effect for import, or relatively low quantities of wines of higher quality which are competitive on sale markets.

The Russian Federation remains the target and most attractive market for Moldovan wines, as it absorbs about 70 percent of the export. Indeed, this structure of exports indicates a strong unilateral dependence on the market of Russia, so that the latter takes hostile enough attitudes very often, dictating the rules of the market alone. We should also recall the recent "economic sanctions" of the Russian authorities against imports of Moldovan wines, which have finally outlined the importance of the Russian capital in Moldovan wineries.

Although Moldova remains the largest supplier on the Russian wine market, the share of Moldovan wines has declined from 57 percent in 1999 down to 45 percent in 2004. The restrictions related to supply of raw material is probably a cause; Moldova imported unpacked wine from Romania in the equivalent of 10 percent of its exports to Russia in 2002-2003. At the same time, the problems have a deeper nature: the Russian market is radically changing as regards the structure of demand, preferences of consumers and reactions of competitors. Perhaps the Russian consumers are tempted to try something new, right what "new world" producers such as from Chile or Argentina could offer.

On the other hand, the export to the European Union (E.U.) holds only 0.7 percent of the overall value of wine exports from Moldova. The volume of single market for importation of wine products and geographic approach of this market would make it an important place for sale of Moldova wines. In addition, if Moldova is awarded a preferential regime of asymmetrical trade with the E.U., which would eliminate many tariff barriers on way to this market, this would radically change the situation.

An analysis of policies of countries in the region demonstrates that the preferential regime of trade with the E.U. is manifested through awarding of duty-free quotas. As for example, a quota of 300,000 hectolitres was established for Romania and 681.8 hectolitres for Bulgaria. If the Republic of Moldova benefits of the same facilities, the export of Moldovan wines to the E.U. could exponentially grow. For comparison, Moldova exported 42,300 hectolitres of wine to the E.U. in 2004, a quantity that represents only 14.1 percent of the quota of Romania. If Moldova benefits of a similar quota, the export of Moldovan wines to the E.U. would grow 7-fold in case of complete use of the share of 300,000 hectolitres. It is absolutely real to cover these quotas, since Moldova is regarded as a more important world exporter than Romania and Bulgaria.

Romania is a little used but very important market for Moldovan wines. Its entry in the E.U. is not the happiest event for Romanian wines producers. Prices are on the rise in order to be adjusted to the E.U. prices, while the privileged position of wine exporters would probably disappear slowly but surely. The costs of many wine companies in Romania would be much higher than in Moldova, while Moldovan exporters would be winners, if they benefit of a special trade regime with Romania after this country joins the E.U. On the other hand, the entry of Romania in E.U. will make this country a strategic market and a sure way of Moldovan wines to the West.

According to official statistics, Romanians consume about 37 litres of wine per capita a year. The export of Moldovan wine to the Romanian market was estimated at over 1.2 million dollars in 2005. Many Romanian experts fear that the advantages of the own market will decline the next years because Romanian wine markers have spent a lot of money in order to respect the requirements of Europeans, and this thing is mostly reflected in prices. Moldovans will be able to rely more on lower prices in order to attract Romanian consumers, since they do not have to pay such amounts. Meanwhile, Romanians could appreciate more the aroma of wines from over the Proute River. The prices are different on the two banks of the Proute River at present as well, but the difference will deepen as much as the date of Romania's adhesion is approaching.

About wines in figures

  • The share of Moldovan wines in the Russian Federation is about 70 percent.
  • The Republic of Moldova is ranked the 11th place in the top of world wine exporters.
  • The average wine exports of Moldova turns over about 150 million litres a year.
  • Exports of Moldovan wines to Romania were estimated at about 1.2 million dollars in 2005.
  • The sugar concentration of Moldovan wines is 4-fold higher than of Romanian wines.
  • The Republic of Moldova is the only wine producer in East Europe included in the top of world exporters.
  • The Moldovan wines have a medium alcohol concentration of 13 percent, compared with the Romanian average of 10 percent, being adapted to the Russian market.
  • The winery Cricova has a limestone depot in which it stores about one million bottles of wine from 600 sorts at an optimum temperature.
  • The locality Milestii Mici, a suburb of Chisinau, holds the largest wine collection in the world - more than 1.5 million bottles - which was introduced in the Guinness Book in 2005.

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