Rus News Journal

Hang-over without "Borzhomi"

Closing six years ago border for Georgian wine and mineral water, in Russia expected to strike blow to the main branches of local economy. Left exactly to the contrary: embargo has given them powerful stimulus for search of new directions of sale and as a result of seriously them has strengthened. As to the Russian market it can fix only losses. The place of the forbidden Georgian wine was occupied for a long time with competitors from other countries, and here " Borzhomi " anybody, strangely enough, could not replace.

in the spring of 2006 from the Russian counters two main Georgian drinks and #150 were gone; wine and " Borzhomi ". Chronicle of events is that. In January the main health officer Gennady Onishchenko has declared that Georgian wine and " Borzhomi " do not correspond to the sanitary code and that is necessary " seriously and teleologically " to be engaged in their quality. The true share in words of the health officer was In the relation of wine it, in general - that, Georgians recognised also. Anyway, when Michael Saakashvili has charged to Minister of Defence Irakliju Okruashvili to head campaign for advancement of Georgian wines in other markets, last, having understood with a situation, has declared with soldier`s frankness that " many wine makers by muhlezha sent poor-quality wine which do not take in Europe " to Russia; also that they did it because " Russia it is such market on which it is possible to sell even faecal weights ".

Faecal weights of Onishchenko endure, of course, could not. In March, 2006 Rospotrebnadzor has entered an interdiction for import to Russia of Georgian wine, and in May the same fate has comprehended " Borzhomi " and other Georgian mineral waters.

the Georgian revenge
the Version about problems with quality of wine and especially waters from the very beginning sounded not quite convincingly, but the further events have proved presence in actions of the health officer of a political component. We will remind, simultaneously with the Georgian have been forbidden both Moldavian wines with the same argument. But in one and a half year Moldova has declared that with quality of wine has seriously worked, and deliveries have renewed. Georgia too spent similar work. So, after ministerial investigation it has been closed seven Georgian factories, especially caused a stir in export on the Russian market of those weights. However political relations all worsened. At first Georgia has acted from the veto on Russia`s accession to the World Trade Organization unique from all countries of the world. Then there was a 2008, Russian - the Georgian confrontation, and invitations to return to the Georgian wine makers and has not arrived.

it is necessary to tell that the Georgian economy has born this blow. Though, appear, blow was shattering: till 2006 in structure of export of the Georgian goods Russia occupied about 20 %, and its lion`s share had just on wine and mineral water. Nevertheless thanks to state economic policy, the total amount of export after an interdiction was not reduced, and from year to year dews: in 2005 it made $865,5 million, in 2006 - the m has passed for $900 million, and following the results of 2011 has almost reached $2,2 billion Share of the Georgian drinks has shrivelled in this stream to 4,6 % a title of the key export goods they have conceded to ferroalloys, easy metals, cars (otvertochnoj assemblages), the electric power. However total export of wine and water makes now $102 million almost as much, how much was before embargo. And in a greater degree mineral water is responsible for success. The basic Georgian player of this market, a mark " Borzhomi " from interdiction introduction only has won Has increased since then incomes and volumes of output by third.

wine we will drink
Wine makers have suffered from introduction of an interdiction most strongly as in their deliveries the Russian market occupied a share to 80 %. For example, in 2005 of wine it has been exported on $81 million, including to Russia In 2007 the general indicators of export of wine have decreased for $63 million twice, and the majority small vinodelen, delivering the goods to Russia, were simply ruined. It is necessary to give due to the Georgian government to rescue branch it tried in every way. First of all to wine makers have reduced taxes. In the end of 2006 there was a decision according to which vinodelcheskaja the company acquired the right not to pay the profit tax if will prove that the expected profit at it has decreased a minimum for 50 % in comparison with previous year that, actually, actually any manufacturer of wine easily could prove. President Saakashvili personally was engaged in marketing, tasted wines and urged to send them on the European markets. " many thanks to the mother of Russia for embargo, Saakashvili scoffed one year ago, having tried in one of Batumi vinodelen " Odzhaleshi " 20 - summer endurance. quality of our wine after embargo has strongly grown, and if Russia does not open the market, it doesn`t matter, as there are also other markets ". Besides, Michael Saakashvili was voiced in the sense that if other markets of Georgian wine do not take, we will drink, say, together with generous tourists. It, of course, bravado. On former volumes Georgian wine manufacture did not leave: in comparison with its peak 2005 is on sale abroad on a quarter less, and in the Georgia it is consumed approximately as much. Though there is a progress: following the results of last year the fault is exported on $54 million on $7 million more than a year before.

Key territories for sale there were CIS countries basically Ukraine. To accustom to Georgian wine Europe and America by and large did not leave. Braked advancement in the new markets and some small troubles. For example, the American businessman Evgenie Dozortsev has registered in the USA the well-known stamps " Hvanchkara " and " Kindzmarauli " and some years the Georgian patent department had legal proceedings, trying to return to their Georgia. Only last year the parties have come to the agreement on which Dozortsev refused the rights to trade marks in exchange for their distribution in the USA on special conditions.

Borzhomi of the world
In a case with " Borzhomi " to give thanks to Russia for embargo really costs, as sales of the owner of a brand companies IDS Borjomi International have grown since then considerably. Here only hardly probable this gratitude can proceed from Michael Saakashvili. The matter is that the company The owner of a brand " Borzhomi " it is registered in Holland. The head office settles down in Kiev both #150; and the basic taxes are paid too in Ukraine, as this market today for the company key. In Georgia IDS Borjomi the tax to extraction of the water with the same name pays mainly, the share of most this water on holding sales in the homeland makes only 7 %. Owners of the company have the indirect relation to Georgia also. The exact data about proprietors " Borzhomi " was never, but like shareholders owning IDS Borjomi investment companies Salford when - that were Badri Patarkatsishvili and Boris Berezovsky. And now chairman of board of directors IDS Borjomi and owner Salford who on behalf of investors operates the manufacturer of water, the citizen of the USA Evgenie Joffe is. One more interesting nuance: main, on our representations, the Georgian water in the Georgia drink a little the most sold water in the local market is " Nabeglavi ".

Thus, what country has salted Onishchenko, forbidding in Russia " Borzhomi " is a geopolitical riddle. It is precisely known only that IDS Borjomi from an interdiction has not suffered.

though it seemed that will recover from blow to this manufacturer even more difficult, than to wine makers. Suddenly the company has lost the market where 65 % of its production were realised. Some years it struggled for in the lead positions in Russia, and just on the eve of an interdiction this purpose has been reached. IDS Borjomi has achieved, apparently, the impossible: in the first quarter 2006 Georgian mineralshchiki have won victory over leaders of world market PepsiCo and Coca - Cola. Not in all Russia, truth, but only in Moscow but considering that the transnational companies sell potable water " from - under the crane " and Georgians mineral, victory literally the expensive cost. According to the research company " Business of the Analyst " in Moscow in the first quarter 2006 a share " Borzhomi " on sales made 27,5 %, at BonAqua (The Coca - Cola Company) there were 14,6 %, at Aqua Minerale (The Pepsi Bottling Group) 14,4 %.

what to forget the Secret of subsequent success IDS Borjomi about the Russian market after introduction of embargo the company and has not thought. Today she on - former sells 16 % of production in Russia. In 2006 - m IDS Borjomi has bought in the Lipetsk region the small manufacturer of mineral water " the Edelweiss " and in three years has got at Nestle factory in Kostroma and to the stamp " the Sacred source ". To play in the field of cheap water, truth, it has appeared not so interesting: the Russian 16 % of sales in litres give IDS only 5 % of a turn in money terms. Gets into Russia and water " Borzhomi " Or frank contraband, or through Belarus which with Russia is united by the Customs union, and delivery from Georgia thus did not forbid. Besides, presence reduction in the Russian market has liberated IDS energy for advancement in other markets. Having doubled for a year of sale in Ukraine, the company seriously was engaged in Baltic, Kazakhstan, Europe and America. As a result by 2010 sales volumes which were fixed to the Russian interdiction, have been restored, and then they managed to be surpassed.

hospital attendants of the market
in the Summer of last year Rospotrebnadzor has declared that considers possibility of returning to the market of the Georgian mineral water. There was it after Georgia eventually has agreed to start up Russia in the WTO.

wine makers, seeing such changes, to rejoice nevertheless do not hurry. The matter is that Georgian wines in the Russian market by and large already nobody waits. Their ambry have occupied vinomaterialy and wine from a New World Argentina, Chile and etc., playing the same price categories or even more cheaply. An ambry " Borzhomi " for six years of its absence in our market paradoxical image remained it is empty. In this time anybody and has not managed to create a similar brand on power, and new stamps, as a matter of fact, have not appeared. All the same weakened by a considerable quantity of variegated manufacturers " Essentuki " not having distinct marketing " Narzan " " New Tersky " and a little others. Love of Russians to waters of Transcaucasia have tried was to use known Armenian stamps " Ache " and " Bzhni " but they did not manage to receive and several percent of the market. The company " Business of the Analyst " has found out that have won from an interdiction " Borzhomi " mainly manufacturers not mineral, but potable water. Four largest profile stamps BonAqua, Aqua Minerale, " Shishkin wood " and " Sacred source " (belongs, we will remind, IDS Borjomi) have increased the share by 5,3 % to 43 %. Thus growth at four largest stamps of mineral water " Essentuki " " New Tersky " " Narzan " and " Arhyz " has made only 2,5 %, 25,5 % have turned out. Among the reasons the general mistrust of the consumer to the mineral waters, generated as a result of the massed propaganda campaign against " is marked; Borzhomi ".

However, last year negotiations with Gennady Onishchenko`s department about returning to Russia have entered and IDS Borjomi, and manufacturers of alcohol. Eight months the largest Georgian manufacturer of cognac the company " waits for the permission from Onishchenko; David Saradzhishvili and Eniseli ". On assurances of the co-owner of the enterprise George Pilieva already all formalities are settled and in the near future its company, and also IDS Borjomi will receive, at last, production import licence to Russia.

, however, so it not seemed to us. " Really, we confirm that there were about it conversations. We carried on negotiations with representatives " Borzhomi " about that they have returned not through any Dorogomilovsky market, and officially " has optimistically begun conversation with " Money " Gennady Onishchenko. But further already familiar formulations have gone that experts of Rospotrebnadzora should visit Georgia, make sure of normal functioning of sources and etc., and Georgia does not give them official guarantees of security. It filled with the same words an aether all six years of embargo, and the Georgian party persistently responded that official guarantees for sanitary officials in view of absence of a visa regime between the states are not present, and to speak here there is nothing. Despite losses, wine makers do not reproach the government with obstinacy. " why we should feel second-grade? And Chiles do not ask any especial inquiries the republic of South Africa, and we should give them! " the owner of one of the largest vinodelen Georgia has told to us, making comments on actions of Rospotrebnadzora.

" All it confirms once again my everyday supervision. In this quasistate the main enemy of business is its native government " so Gennady Onishchenko has finished the speech in favour of renewal of cooperation with Georgia. Such here, if one may say so, the invitation to be on friendly terms.