A matter of taste. Ukrainian wine-making went on the rise

During the crisis, the Ukrainian consumers are increasingly popular domestic wine

Positive dynamics in the wine industry began to be observed only this year.

At the resumption of the market volume now takes years, say the winemakers themselves. To restore the quality of the domestic wines with no varietal unique Crimean vineyards will be very difficult, says Natalia Nekrasova at No. 23 in the magazine Reporter June 17, 2016.

You will manage the industry with such a tough challenge will become clear in the next few seasons.

The annexation of the Peninsula was not the most fruitful year in summary 2014 was for the industry a failure. Winemakers are reluctant to compare the current statistical indicators with a successful year 2013. The comparison is not in favor of the current situation.

According to the Corporation “Ukrvinprom”, in 2015 the production of wine in Ukraine (excluding Crimea) has decreased by 50% compared to 2013, when the figure (including ARC) was $ 28.3 million dal (1 dal = 10 liters). The decreased production of sparkling wines — from 6.7 to 4.7 million decaliters, respectively.

Without The Crimea

“With the annexation of Crimea, we have lost not only your best resource base, but also consumers, whose share on the Peninsula was higher than the average for Ukraine. A military conflict in the East of the country is tightly froze another 15% of the market” — tells about the problems of winemakers, the General Director TD “Inkerman” Anna gorkun.

In turn, Director of the Association “Growers and winemakers of Ukraine” Sergey Mihaylechko says: arrays of vineyards located in the Crimea, was almost one-third of the total area on which the vine is cultivated in Ukraine. “The loss of Crimea was a serious blow for domestic winemaking,” he acknowledges.

According to him, the share of the Crimean products in the total volume of bottled wine was consistently convincing 55-57%. On the Peninsula were concentrated producers who not only processed the grapes, but shall spill finished goods, only two dozen stable working factories and more than fifty purely viticultural enterprises.

However, according to the President of the Association of sommeliers of Ukraine Dmytro Sydorenko, the highest damage due to the annexation of Crimea was done not so much the volume of the market as its quality. “We lost the small winemakers of the Crimea, such as Pavel Shvets and Alexey Akchurin. Now they can in the current circumstances, continue to produce, but sell it on the territory of Russia,” he says.

“In connection with the loss of Crimea in Ukraine has stopped processing these unique grapes as “Sersial”, “verdello”, “Semillon”, “Pedro”, “Kokur white”, “what car”, “javac-Kara”, “kapasia”, “Sary pandas”. These varieties can be grown only in the climatic conditions of the Crimea”, — said the General Director of Corporation “Ukrvinprom” Vladimir Kucherenko.

The total area of the Crimean vineyards amounted to 25 thousand hectares without taking into account their development potential. This makes the region the second largest resource base wine in Ukraine. The palm of championship of the traditionally — in the Odessa region with its over 30 thousand hectares of vineyards. In addition, it is worth reminding that wine regions were, and remain, Mykolaiv, Kherson and Transcarpathian region.

French national?

Positive dynamics in the industry began to occur only this year. According to the Association of “Winegrowers and winemakers of Ukraine”, in the first quarter, the total output of still and sparkling wines increased by 38% — from 2.3 million to 3.1 million gave gave. “We hope that this trend will continue and at the end of the year the market will grow by 5-7%,” says Gorman.

Ukrainians in their preferences for alcohol are increasingly turning to domestic wines

Ukrainians in their preferences for alcohol are increasingly turning to domestic wines. “Recently, the popularity of Ukrainian wines is growing, be a worthy and exciting brands from the “Colonist”, “Wineries of Prince P. N. Trubetskoy”, “CISA”, “Shabo” — says about the situation in the wine retail Svetlana Zozulya, image and marketing Director of network PAST. Gorman, confirms that the ratio of domestic and imported products in the sales structure is changing in favour of the former. The main reason is economic.

“Ukrainian consumers have always been susceptible to imported wines: at equal prices of our compatriots are inclined to give preference to the foreign product, often even at the expense of quality. Fortunately, for objective reasons, the share of imports in the last two years has been declining” — describes the characteristic trends of gorkon.

Consumption of domestic wines increases proportionally with the timid growth of welfare and in parallel with the intensity of nervousness in society, explain the market players themselves.

“The increased level of anxiety associated with economic instability in the country and the world, war, lack of trust in the government, international corporations and brands, encourages people to eat and drink this anxiety,” adds touch to the overall picture of the market Zozulya.

Ironically, the increase in production occurs for the same reasons that previously led to its reduction: the difficult economic situation and low purchasing power. Winemakers explain that in the conditions when the bottle of vodka with a volume of 0.7 l is more than 70 USD, and the same size bottle of wine — from 35 UAH, consumers have changed their preferences in favor of wine.

Wine buyers switched to products with more affordable prices. Changes in range have occurred not only price, but quality — Ukrainians began to gravitate towards dry wines

According to the observations of zozuli, the majority of wine buyers switched to products with more affordable prices. It is noteworthy that changes in range have occurred not only price, but also quality. According to Sidorenko, the Ukrainians began to gravitate towards dry wines, in line with global tastes and trends.

Manufacturers caught on to this trend. “For many years we have produced a simple, sweet and semi-sweet wines, but now switched to varietal dry varieties. Thus we respond to market demand”, — says Director for marketing and promotion of the company “Cotnari” Olga Toichkina.

Do not miss the chance

However, to rejoice early. “Results for the first quarter are not indicative of output of the wine industry from the crisis. Beautiful dynamic is formed only through comparison with the most disastrous years in the history of winemaking independent Ukraine,” hampers of hope winemakers Mihaylechko.

By the way, by the middle of this year, “hooked” import again began to gain momentum. And here for the domestic producers let us not lose time and use suddenly opened due to the crisis opportunities.

According to the Association of “Winegrowers and winemakers of Ukraine”, in the first quarter the volume of imports of wine increased by 43%. with 296,7 thousand (in the corresponding period of 2015 to 423,9 thousand dal.

“In respect of imports, we are seeing a situation similar to the crisis period of 2008-2009. Then arose the tendency to replace imported Ukrainian wine has not been fully developed. After a brief lull buyers psychologically accustomed to and exchange rate differences, and to order prices, allowing importers to slowly increase the number of imported products. Today this contributes to a very aggressive expansion of the foreign manufacturers in the foreign market: they need somewhere to sell their wine”, explains the trend Mihaylechko.

An interesting trend shows export. According to Mihaylechko in the first quarter of 2016, the exports of still and sparkling wines amounted to 69.3 thousand, which is three times more than in the same period of 2015. “However, the figure suggests that overall the direction is ineffective, because the specified volume is not more than 500 thousand bottles of wine. For comparison: in 2013, only a quiet group of wines we exported about 10 million bottles”, — the expert explains.

Excise trap

For a year or two to solve the problem of restoring the volume and quality of winemaking in Ukraine is almost impossible, say industry experts. Need more time and a lot of money. According to estimates, gorkun to compensate for the loss of the Crimean vineyards, it is necessary to attract investments in the amount of over 600 million euros. And that’s not all.

“If to take into account the raw material base of Ukrainian wine in General, it should be recognized that almost half of existing vineyards on the mainland of Ukraine needs to be updated. Therefore, the total amount of investments that can provide the country with superior raw materials, is committed to 1 billion euros. Without support from the state for existing players in the market is unaffordable budget,” explains the winemaker.

But the state in this situation, the industry is not an assistant, say market experts. “Winemakers have to contend not only with the weather conditions and the economic crisis, but with the missing and invalid legislation. The state has no industry any support,” says Sidorenko.

The biggest problem for a sommelier calls the lack of opportunities for small producers to obtain necessary licenses. And business not only and not so much that the process of obtaining them requires considerable expenses. “License to manufacture is ridiculous 800 USD. Retail license — the possibility of selling its products through own shop is worth 2 thousand UAH per year for rural areas and 8 thousand UAH for Kiev — lists Sidorenko. Since wine is an excise product for sale needs a cash register, which costs about 5 thousand USD. These costs winemakers ready to go, but to get all these licenses officially and honestly is unreal.”

Even more unpredictable is the situation with excise taxes. “In 2010, excise duty rate on fortified wines was increased four times — from 50 kopecks to two hryvnia. This immediately struck a ricochet on manufacturers: the rate of decline of production in this group for two years was 74%. In 2014, there was increase of excise rate by 43%, and we lost 48% of production” — gives the example Mihaylechko.

Now the position of the State fiscal service in relation to the alcohol industry, according to him, remains with the manufacturers, no one leads the dialogue, they do not make known about the plans for the next raising excise taxes, it is difficult to predict what changes in rates can be expected in 2016.

“The excise policy of our state for the majority of participants of the alcoholic market is without exaggeration a mystery. Especially in the part of the sequence of actions of the regulator” — agrees with him, gorkon.

She is convinced that the Ukrainian wine has potential: it can take its rightful place in the global market. But without real support from the state to expect it not to happen.


This article was published in No. 23 of the magazine Reporter June 17, 2016. Reprinting of publications of magazine Correspondent in full is prohibited. The rules of use of the magazine Reporter published on the website Корреспондент.net can be found here.