Decline in exports is also determined by decline in the volumes of production and exports of wine and brandy. According to the Statistical Committee, in November of this year exports decreased by 12.4% compared with October 2018 and 5% compared with November 2019. On the whole, the volumes of imports this year exceeded exports. In January-November, compared with the same period last year, imports increased by 24.2% and exports 9.8%.
The chair of the National Wine Center Avag Harutyunyan told Lragir.am fake production is ousted from the wine and brandy industry which explains the decline that will continue next year. According to him, this situation will last for 1-2 years in wine and 2-4 years in brandy industries. Decline will be followed by a steep growth.
“The Armenian wine and brandy industry is being cleared of fake products. Production and exports have declined by 5-10%, next year this will continue. There will be a steep rise already starting from 2020,” Avag Harutyunyan says.
According to him, the tendency to produce fake products in this industry was mainly encouraged by the Russian side.
“The Russian side says give me cheap product and we cannot produce cheap quality products because we are not competitive with our neighbors in terms of infrastructures and carbohydrates. We were forced to fake 5-10%. Now the internal oversight is stronger. The reason of this is that formerly the wine industry was highly politicized. The wine money was spent to push people into parliament, presidents were made with wine and brandy money. Now this is no longer so, there are less political orders, and political order always supposed a percentage, they would never get you because you were performing a political order. Now there is no political order, hence the sector is not politicized. And this means two things: first, producing fake goods is meaningless, second, producing fake goods is dangerous,” Harutyunyan said.
According to him, in this situation the companies of the industry suffer losses but it is their fault.
“They could choose to enter into those games or not,” he says.
As to markets, Avag Harutyunyan says the share of the Russian market has decreased over the past 10 years. In 2007-2008 91% of the volume of production of this industry was exported to Russia while today already 71% goes to Russia. At the same time, the share of other markets is growing with small steps. “We do not have major orders yet but the market has been diversified, the United States is the second, Europe is the third,” he said.