Oct 23, 2009

Georgian wine sells widely after Russian snub


TBILISI, Georgia | When Russia boycotted Georgian wine in 2006, Georgia lost 80 percent of its export market for wine overnight. Now, Georgian winemakers look back at the ban as a blessing in disguise.

Wine is a central element in Georgian culture, and for hundreds of years, Georgia was the primary supplier of wine to the Russian and Soviet empires. Owing to massive demand and Soviet production quotas, the volume of Georgian wine production soared while quality plummeted.

But, according to Shota Kobelia, commercial director of Georgian wine producer Teliani Valley, when relations between the Kremlin and Georgia's pro-Western government soured to the point of an embargo, many winemakers saw an opportunity.

"Sure, the ban hurt us because we lost our biggest customer. But during this time there was no competition. Now we have an opportunity to sell to more-profitable markets, and we have been pushed to create a much better product," Mr. Kobelia said.

Russia abruptly imposed the ban in March 2006, claiming that Georgian wines were contaminated with pesticides and impurities, and the Kremlin later extended the embargo to other Georgian products, such as bottled water. Experts and commentators roundly dismissed the move as a pretext for Russia to punish the pro-Western Georgian government, which came to power in the bloodless "Rose Revolution" in 2003.

Three years later, Teliani Valley wine is sold in 23 countries, and the company is Georgia's No. 1 wine exporter. As it has upgraded its winemaking equipment and techniques, the company has seen its revenue from exports grow by 13 percent to 17 percent annually, Mr. Kobelia said.

In the United States, Mamuka Tsereteli founded Georgian Wine House, a Maryland-based import company. Mr. Tsereteli was born in Soviet Georgia and originally came to the United States in 1994 as a diplomat. He now teaches international relations at American and George Washington universities.

Since its founding in 2006, Georgian Wine House has put Georgian wine - including Teliani Valley and Pheasant's Tears - on the shelves of more than 50 stores and restaurants in the Washington metropolitan area, and in five other states as well. Calling himself a "cultural promoter" rather than a wine merchant, Mr. Tsereteli holds lectures and wine tastings on weekends at various stores and at area Whole Foods supermarkets, which sell Georgian wines.

"I wanted to promote Georgia and wine in general. And, you know, I wanted to have good wine for myself," Mr. Tsereteli said with a laugh. "It's a good business: If you can't sell it, you can always drink it."

Although growth has been steady, Georgian wine companies still face difficulties being competitive on the open market.