VinIntell MAY 2016, ISSUE 28 Photo: Nicole Melancon

SURPRISING ENCOUNTERS The Emergence of “Old-New” Producing Regions: Ethiopia, & Turkey CONTENTS ETHIOPIA MOLDOVA TURKEY

Brief background...... 3 Brief background...... 10 Brief background...... 22

Area under vines...... 4 Area under vines...... 12 Area under vines...... 23

Cultivars...... 5 Cultivars...... 12 Cultivars...... 24

Certification systems...... 5 Certification systems...... 13 Certification systems...... 25

Production...... 5 Production...... 14 Production...... 26

Stock status...... 6 Stock status...... 15 Domestic Consumption...... 27

Domestic Consumption...... 6 Domestic Consumption...... 16 Exports...... 27

Exports...... 7 Exports...... 17 Imports...... 29

Imports...... 8 Imports...... 19 Genetic Manipulation and

...... International position...... 9 International position...... 20 Biotechnology 31 Genetic Manipulation and Genetic Manipulation and Taxes and Prices...... 32

Biotechnology...... 9 Biotechnology...... 20 Producer income and state Producer income and state Producer income and state revenue...... 32 revenue...... 9 revenue...... 21 Forecasts...... 33

Forecasts...... 9 Forecasts...... 21 ETHIOPIA

BRIEF BACKGROUND Ethiopia is among the lesser known non-tradi- Vineyards established near Addis Ababa and in tional wine producing counties. It is rare to the south-east by Italian troops who occupied open a wine bottle and reading on the label part of the country from 1936 to 1941 were later produced in Ethiopia. Yet Ethiopia has a tradi- nationalised, then privatised and a few large tion of wine making that stretches unbroken to producers have entered the scene producing INTRODUCTION the reign of the Queen of Sheba. Traditionally, serious wine. It has a great climate and it is not Top of mind when one thinks of wine regions driver. The following few editions of VinIntell will Ethiopia has been making a local wine called too hot. Wine experts say parts of Ethiopia's or countries a few usual names arise: , attempt to describe some of the lesser-known tedj, a type of honey-wine flavoured with ger- diverse landscape, which includes high plateaux Chile, Germany, Spain, Italy, California, wine producing countries or areas in the sho leaves, that are similar to hops. However, and verdant valleys as well as six climatic zones, Argentina, Australia, and New Zealand… world. Various factors are leading to new areas this ancient wine-making tradition is gradually are perfect for growing . There are only However, globally, new, rediscovered and opening up as producing regions including being taken over by the modern form of wine- two local producers, Castel, the French bever- emerging wine regions are becoming more climate change, emerging markets and foreign making, and some high-quality are being age player and Awash Winery, which has Live than just blips on the radar. Think Moravia, investment. For this the first edition, VinIntell produced in the country. Ethiopia is growing its Aid founder Bob Geldof as a director. The Tasmania, Mongolia, the UK and even looks at Ethiopia, Moldova and Turkey as “old- own and producing its own signature Castel Group is one of the world's biggest pro- , Ethiopia, Moldova and Turkey. New new” wine producing and consuming regions. wine. Due to the proximity to the equator, it is ducers of wines and beers and in 2014 pro- wine discoveries are also a new competitive even possible to make two harvests per year. duced its first Ethiopian Rift Valley wine.

2 3 CASTEL WINERY founder and President of the Castel Group, at CULTIVARS CERTIFICATION SYSTEMS Meles’s Palace in 2007. Meles understood a Castel, which was founded in Bordeaux, CASTEL The organic farming method introduced and France in 1949 by a family of nine brothers and combination of mild climate, limited rainfall, and employed in the development of Ziway , and grapes sisters, has been operating for more than 60 volcanic soils could make his country an ideal Vineyard is conducted within the boundaries were chosen for the reds that make up 90% years. Group Castel is the 3rd largest wine location for wine growing. The construction of of the new Environmental Management of Castel's Rift Valley production, and the modern winery was completed in 2012. System (EMS), through other internationally producer in the world and the 2nd largest beer grapes for the white wines. The recognized accreditations such as Terra Vitis and soft drinks business in Africa. The idea of AWASH WINERY wine produced is aromatic and fruity. . The and local standards and laws. establishing a Castel winery in Ethiopia was Established in 1956, Awash Wines is Ethiopia’s Castel Group has launched a new super-pre- born during a meeting between Ethiopia’s late longest established wine maker. The winery mium wine brand, Rift Valley Cuvee (Cabernet PRODUCTION president, Meles Zenawi, and Pierre Castel, has a 500 ha farm in Merti Jirsu and a 42 ha Sauvignon) and Acacia Cuvee Prestige Currently, the two wineries in the country com- plot in Ziway, about 163 km south of Addis (Chardonnay). Acacia Wine Collection will include two wines: medium sweet red and dry bined produce almost 12 million bottles of Ababa. Significant investments have been wine per year. made to upgrade facilities and further improve white blend. The collection has been five years in the making with on-going planning and quality. It still dominates the country’s wine CASTEL taste testing to make sure the brand was right. market. Like its local competitor Castel, Awash Castel has seven different types of products, has plans to quench the wine thirst of AWASH two white wines and five red wines: Acacia Ethiopians by expanding their production. The Upper Awash Valley is situated 180 km Dry Red, Acacia Medium Sweet Red, Acacia south-east of Addis Ababa. From this location, Medium Sweet White and Rift Valley Merlot, AREA UNDER VINES the grape harvest is brought to its two winer- Rift Valley Cabernet Sauvignon, Rift Valley Table 1: Summary ies, Lideta and Mekanisa, where they make a Syrah and Rift Valley Chardonnay. The range of 8 table wines. The grapes that are Company plans to export roughly 50% of its Vineyard size (planted) 258 Hectares grown are Petit Syrah, Barbera, Nebiollo, product mainly to Ethiopians abroad. Since Investment 520 Million Birr (US$24m) Chenin blanc and the native, Dodoma. They putting its products on the market in 2014, Employees Number 256 Permanent, 588 Casual have plans to further expand the vineyard. The there has been positive market acceptance. vineyard also grows a variety of food crops Castel hopes to more than double production CASTEL AWASH such as maize and teff (a local staple) for its to 3 million bottles a year. Planting 750 000 vine seedlings of French Awash Wineries, the only other producer, has community of workers. Awash also makes a AWASH varieties, Merlot, Cabernet Sauvignon, Syrah 542 ha of prime land with 133 ha of vines range of wines that are renowned throughout Awash says the terroir where it grows its vines for red wine (90%), and Chardonnay for white growing a variety of Ethiopia. Awash and Kemila, its white wines, in the Awash Valley is perfect for wine and wine (10%) in the Ziway Vineyards (125 ha), grapes in the Upper and Gouder and Axumit, its reds, are four “uniquely we enjoy two harvests a year.” Castel decided to take advantage of the Awash Valley, with classic wine. It recently launched its Gebeta Awash has two wineries: Mekanisa, the older potential domestic market. Ziway, situated two harvests in range of premium wines to enhance the fla- of its two wineries, produces about 30% of around 1 600 metres above sea level, with November and May vours. Awash’s wine. The other winery Lideta, the sub-humid to sub- arid climate, Sandy Loam yielding a total of 3 hub of Awash's administration and wine pro- type of soil variety, mean annual precipitation 300 tons of grapes a duction produces about 70% of Awash’s wine, of 650 to 700 mm and its all year average year. It is also planting including all of its Axumit red and Kemila white temperature of 25oC is deemed suitable for on an additional 36 ha wines. The company, which has 555 employ- the grape varieties imported from Bordeaux. plot.

4 5 ees, currently produces four core brands i.e. Its priorities are expanding the farm and company Axumit, Camilla, Saris (Awash) and Gouder. has brought eight wine experts from the interna- Its Gouder is a national brand. The application of tional wine industry, for better management of the new technology and an irrigation system have farm and the factory, but also for the transfer of proven conducive to the effectiveness of the farm. skills to empower the local experts.

STOCK STATUS Local production is insufficient to serve local demand.

DOMESTIC CONSUMPTION at hand is switching between bottled beer and World per capita wine consumption lists draught beer, and between Sprite, 7Up and Ethiopia among the countries that use a small one of the cola drinks. The Awash Wine (Vino) amount of wine, below one litre per year (0.09 is a must have ingredient. litres per individual). The annual wine con- According to Country Trading, a liquor importing sumption in Ethiopia is expected to grow to company, local wines are growing in popularity more than 8.5 million litres per year. Imported over imported wines. The reason for this popu- wines are expected to fill the remaining demand larity may be due, in part, to cost. The selling not supplied by local producers. Local busi- price of this imported wines falls between ness people say the demand for locally pro- ETB259 (US$12) and ETB914 (US$42) while EXPORTS duced wines is high, but the wineries cannot locally produced Castel products are between It is estimated that about half the industry’s export target will be sold in China, the USA and EU provide enough. Local demand is comple- ETB190 (US$9) and ETB160 (US$7). Though countries. Key exports markets are China, Saudi Arabia, the and the US (see table 2). mented by imports from South Africa, Italy and Castel is gaining acceptance among Ethiopians, France. Wines that are fruity, easy to drink and the locally produced wines have yet to gain Table 2: exports ranked per importing country: 2015 aromatic are preferred by Ethiopian consumers. traction among foreigners and more affluent - Though the first winery in Ethiopia has been in Ethiopians. Speaking from experience, those operation since the 1950s, the wine drinking groups are more inclined to purchase imported habits of Ethiopians is infrequent. Most food wines from South Africa and France. and drink on Ethiopian tables ends up becom- Destination Exported value 2015 (US$ thou - sand) bal - Trade ance 2015 (US$ thou - sand) in Share Ethiopia's exports (%) Exported quantity 2015 Quantity unit Unit value (US$/unit) Ranking of partner coun tries in world imports (esti - Tariff mated) faced by Ethiopia (%) Demand for wine in Ethiopia is projected to be ing mixed into one. Coffee with tea or coffee World 316 -6,549 100 85 Tons 3,718 8.5 million litres by 2017 and tea with milk and Coca Cola or Pepsi with China 120 -69 38 32 Tons 3,750 4 0.1 Current latent demand for wine in Ethiopia is mineral water or even wine are common. estimated at 5.1 million litres (2011 figures from Saudi Arabia 68 68 21.5 16 Tons 4,250 Increasingly popular for alcoholic beverages Data Monitor) Netherlands 62 -20 19.6 19 Tons 3,263 10 2 drinkers is the mixture known in Amharic as USA 54 19 17.1 16 Tons 3,375 1 0.5 “ande be ande” (one to one), where you mix a However, the demand for wine in Ethiopia is Uganda 8 8 2.5 3 Tons 2,667 128 22.4 bottle of wine with a bottle of beer and a bottle projected to grow. Some analysts say the rise of Sprite in a large jug. Ande be ande is now in imports does not bode well for local produc- Kenya 3 3 0.9 1 Tons 3,000 82 2.5 popular at most places in Addis Ababa and it ers as they are hoping to fill a void in the market, Philippines 1 1 0.3 0 Tons 53 6.2 seems the only alternative ingredient one has one they hope will not be filled by importers. Trademap, 2016

6 7 IMPORTS INTERNATIONAL POSITION GENETIC MANIPULATION AND BIO- Data from the Ethiopian Revenue and imports from South Africa, Italy and France Ethiopia ranked last in the world in per capita TECHNOLOGY Customs Authority (ERCA) shows that the (see table 3). The volume of imported wine in consumption of wine in 2014. In terms of With a wine industry commercially still in its import of wine is increasing significantly year 2015 was 1.4 million litres. exports and imports it does not reach any infancy, issues such as GM and biotechnology on year. Local demand is complemented by rankings. are not yet mainstream.

Table 3: Ethiopian wine imports ranked per exporting country: 2015 TAXES, PRODUCER INCOME AND STATE REVENUE

- Local producers are still battling to become profitable.

FORECASTS

Exporters Imported value 2015 (US$ thou - sand) bal - Trade ance 2015 (US$ thou - sand) in Share Ethiopia's imports (%) Imported quantity 2015 Quantity unit Unit value (US$/unit) Ranking of partner coun tries in world exports (esti - Tariff mated) applied by Ethiopia (%) Local producers cannot fulfil local demand. of attracting foreign investment, key to its World 6,865 -6,549 100 1,860 Tons 3,691 Challenges however remain of which some are plans to reach middle income status by 2025. Area Nes 2,887 -2,887 42.1 845 Tons 3,417 quite some exotic. Castel's Ethiopian vine- The country's growth rates are already among South Africa 1,957 -1,957 28.5 639 Tons 3,063 11 35 yards are surrounded by a two-metre-wide the highest in Africa, reaching 11.2% in 2013 France 1,208 -1,208 17.6 195 Tons 6,195 1 35 trench to deter pythons, hippopotamuses and according to the government, although the International Monetary Fund (IMF) puts the Italy 295 -295 4.3 81 Tons 3,642 2 35 hyenas. Also, the absence of packaging com- panies locally (for the labels, bottles etc.), the figure at 8.2%. Western private equity firms are China 189 -69 2.8 21 Tons 9,000 15 35 lack of infrastructure and mechanical support, starting to invest in roses, wine and power Netherlands 82 -20 1.2 14 Tons 5,857 16 35 as well as continuous power blackouts in the plants, as Ethiopia opens to trade with the Denmark 80 -80 1.2 12 Tons 6,667 19 35 area remain challenges for wine producers and world. Ethiopia still receives more aid than USA 35 19 0.5 18 Tons 1,944 6 35 effective production processes. investment, but that should change in the next few years if private equity firms and other Spain 31 -31 0.5 22 Tons 1,409 3 35 Raw material shortage is another reason why companies keep investing. Business chal- Argentina 29 -29 0.4 3 Tons 9,667 10 35 producers fail to meet demand and then there lenges will improve: For now, the World Bank Portugal 25 -25 0.4 3 Tons 8,333 9 35 is price sensitivity of the consumer. They seek ranks Ethiopia 125th out of 189 on its Ease of high quality with lower prices and this is the 15 -15 0.2 3 Tons 5,000 25 35 Doing Business index, with bureaucracy, major challenge for the producers. New Zealand 12 -12 0.2 1 Tons 12,000 8 35 access to key infrastructure and investment Australia 10 -10 0.1 2 Tons 5,000 5 35 The lengthy process in accessing foreign cur- protection rated poorly. rency and having a Letter of Credit issued are Trademap, 2016 Overall, given the wine production situation in further reasons affecting production. This Ethiopia, the latter will have very little impact causes a delay in the delivery of imported bot- on the global wine trade. tles, corks and chemicals for production. Local wines will grow in stature and compete favour- ably with imported wines. This is despite the unusual manner in which Ethiopians drink wine On the positive side, foreign investment is helping change the way outsiders view the country. It is also boosting government hopes

8 9 KEY INDICATORS – WINE INDUSTRY

Estimated 3.2% of GDP (it was 9% before the Russian ban of 2006)

Accounts for 7% of total exports (by value), or 6% of industrial production

Grape growers contribute 14% toward total agricultural production

Provides direct and indirect employment for approximately 250,000 people, mostly from rural areas in the centre and the south of the country

80% of the wines produced in Moldova are exported MOLDOVA

BRIEF BACKGROUND Shaped as a bunch of grapes, Moldova is Dacian times. The first grape vines were here Bulgarian, Greek, and Turkish varieties. In this In 2006, set up an embargo on situated in the South-East of Europe, between around 7 000 BC and for 5 000 years wine period the wine production reached 12 million Moldovan wine due to a diplomatic conflict. In and Romania, in the Black Sea basin, has been made. Fossils of Vitis teutonica vine liters. The second half of the 19th century saw 2013, Russia instituted a similar ban due to where the vine is said to have originated. leaves in Moldova indicate that grapes grew an intensive planting of newly introduced Moldova’s decision to sign a draft association Moldova’s relief includes low hills, sunny pla- here approximately 6 to 25 million years ago. French varieties, such as , Pinot treaty with the . This had detri- teaus and plains and streams that flow into the The grape growing and wine-making in the noir, , Aligote, Cabernet Sauvignon, mental effects on the country’s economy two big rivers i.e. the and Dniester. The area between the Nistru and Prut Rivers had , , and Blanc. because Russia has always been the biggest climate is moderately-continental with influ- periods of rises and falls, but has survived It was at this time that wines like Negru de importer of its wine. It became apparent to the ences from the Black Sea. Located at 46-47 through all the changing social and economic Purcari and Romanesti, which have made national government that they needed to try to latitude, the vineyards have a terroir suited for conditions. Moldova famous as a fine wine producer, open up to markets other than Russia. Moldova the production of quality red wine in the south- During the 300 years of Ottoman rule, began to be produced. therefore had to reinvent its wine culture once ern regions and mainly white wine in the cen- Moldova saw a decline in grape-growing but The damage at the end of the 19th it gained independence in August 1991. New tral part of the country. after the Treaty of Bucharest in 1812, when the century and both World Wars damaged the initiatives are assisting in getting Moldova on The wine industry accounts for 3.2% of the region became a province of the Russian Moldovan vineyards and the wine industry the international wine map once more. Gross Domestic Product (GDP) and 7.5% Empire, the wine industry flourished. The main considerably. The re-establishment of of Moldova’s total exports, employing over varieties were the traditional ones: Rară Neagră, Moldavian vineyards began during Soviet 250 000 people at the 140 wine companies. Plavai, Galbena, Zghiharda, Batuta Neagră, years, in the 1950s. Over 150 000 ha were Indeed, Moldova has a long and rich history of Fetească Albă, Fetească Neagră, Tămâioasa, planted in 10 years, and by 1960 the total grape and wine production dating back to the Cabasia and many other local, Hungarian, vineyard area had reached 220 000 ha.

10 11 AREA UNDER VINES low number indicates how much of the eco- the famous 18th century Negru de Purcari. As of January 2016, there are three officially nomic share is not going towards small grape • Fetească neagră, a red grape variety. registered protected geographical areas in and wine producers who tend to use more • Plavai: A rare white variety, popular in the Moldova i.e. Stefan Voda, Valul lui Traian, and traditional varieties. Only a few local varieties 19th century and at the beginning of the Codru. This distinction allows the wines to sell can still be found in Moldova today: 20th century and better in EU markets. Moldova has 137 000 • Fetească albă, an indigenous white variety. • Busuioacă albă: white aromatic variety. ha of vineyard planted with over 30 types of • Fetească regală, a white variety, a natural Recent varieties are Syrah, , Vitis Vinifera varieties. The largest area of vine- cross between Fetească albă and . , , , yards (about 105 000 ha) are used for com- • Rară Neagră, a red variety traditionally used Sémillon, Ugni Blanc and were mercial production. The remaining hectares mostly for blending with other varieties, e.g. conditionally registered for trial. are vineyards planted in villages around the Wine regions pre Jan 2016 houses used to make home-made wine, or CERTIFICATION SYSTEMS "vin de casa". The southern area is suitable for like Taraclia, Ciumai, , Ceadir-Lunga, red sweet and semi-sweet wines. White wines Baurci, Cazaiac, Tomai, Cimislia etc. are also To ensure that future improvements to the Vartely, DK-Intertrade, Dionysos-Mereni, Lion- have a high content of alcohol. Micro-regions in the southern region. sector would be consistent nationwide, the Gri, and Vinaria Purcari. Together, the wineries Moldovan government in November 2012 export more than one third of all Moldovan wine. amended the Vine and Wine Law. The new The member wineries aim to raise Moldova’s CULTIVARS regulations, facilitated by the USAID’s CEED II profile as a major European wine producing program , set up the National Office for Vine country. To accomplish this goal, the members in Moldova follows international Table 5: Local and foreign wines breakdown and Wine (ONVV) and the National Wine and work together to promote their wines on the trends and includes West European, Types Share Vine Fund, a public-private partnership sup- international market through joint marketing Caucasian and also indigenous grape varieties European 70% ported by national funding to promote the initiatives and to educate the international wine (see table 4). Domestic 16% country’s new brand: Wine of Moldova. Since trade and press about Moldova. Table 4: Varieties in Moldova Caucasian 14% the launch of Wine of Moldova in 2013 the NATIONAL OFFICE FOR VINE AND WINE ONVV has taken a lead role in implementing Varieties Share The uniqueness of Moldovan wines is repre- (ONVW) policies for the wine industry, establishing sented by the indigenous varieties, which White 70% Chardonnay, Sauvignon regulated quality standards and streamlining The public-private ONVW and the National blanc, Aligoté, Pinot Gris, account for only 16% of the vineyards. This Pinot blanc, , procedures around and licensing. Wine and Vine Fund valued at US$3.2m are Traminer, Muscat, primarily used for the campaign of the newly , Müller-Thurgau, For example, the 2015 Wine Law has helped launched national brand Wine of Moldova. The Moldovan wine regulations better align with inter- basic purpose of the Office is to promote qual- national standards. The Vine and Wine Register ity wines through the Wine of Moldova pro- Project has established geographic indicators for Red 24% Cabernet Sauvignon, gram, to manage the production of PGI and Merlot, , wine to meet EU “place of origin” requirements. , , Gamay PDO wines and to provide assistance and THE MOLDOVA WINE GUILD consultancy to the Moldovan wine industry. The Moldova Wine Guild is a non-profit asso- Moldova adopted a number of laws and made ciation established in August 2007 by several of amendments to encourage agricultural and Moldova’s leading private wineries, i.e. agro-industry growth and rural development of Table 6% Wine Holding, Vinaria Bostavan, Chateau which the wine law is the most relevant:

12 13 • The Vine and Wine Law (2013) dramatically • The Amendment on the Law on Production The Moldovan wine collection "Mileştii Mici", km. It is the second largest winery in Moldova reforms Moldova’s wine rules and regula- and Turnover of Ethyl Alcohol and Alcohol with almost 2 million bottles, is the largest wine and one of the largest in the world. It has 107 tions by bringing them in line with those of Goods (2009) which abolishes obligatory collection in the world, according to the 800 ha of vineyards that it uses for commercial the European Union and other international marking with a state trade mark of wine Guinness Book. It stretches for 250 km, of purposes. In addition, it has 120 km of under- standards and best practices. The new law goods of Moldavian origin . which only 120 km are currently in use. The ground galleries some of which are used for creates a legal regime for wine production • The Regulation on beverages and the Cricova winery also has an extensive network wine production. and trade separate from that for hard alco- Regulation on Sanative Water (2007). of underground tunnels that stretch for 120 hol. The law eliminates the licensing proce- • The Law on grapes and wine (2006). dure and conditions for wineries (excluding • The Law on foodstuffs safety (2006). STOCK STATUS label approval procedure and the discretion- • The Law on the Organisation and Activity on Milestii Mici is a construction in the style of become an emblem of the Moldovan wine- ary authority of the Central Tasting the Agricultural and Agri-food Products Moldova’s old feudal fortresses. One may making, the underground wine city Cricova Commission), introduces more transparent market (2006) providing a general frame- travel through the galleries by car, by bicycle has galleries stretching on 70 km, with streets material and procedural norms related to work for the quality system. or walk on the streets called Feteasca. Tasting named symbolically. The limestone under- entrepreneurial activity (i.e. transparent qual- • The Law on Organic Food Production rooms are set up here, which are cool in hot grounds located at 35-80 m depth house 30 ity requirements, predictable rules for wine- (2005) that harmonized with EU require- summer and warm in the cold period of the million litres of wine at a constant temperature making, clear conformity assessment pro- ments. year. The cellars secure an ideal microclimate of 12-14˚C and 97-98% humidity. Founded in cedures, and defined competencies of the • The Law on uniform tax in agriculture (2004). for wine ageing, keeping a constant tempera- 1952, Cricova is the biggest Moldovan pro- controlling authorities), and creates a legal • The Law on foodstuffs (2004). ture and humidity. The wines are exported to ducer of using the traditional framework for the production of wines with • The Law on Ratification of the Agreement amongst others, Japan, China, Taiwan, method; the wine ageing is done fully in the Geographical Indication and Denomination Establishing the International Organisation Netherlands, Cyprus, Denmark, Finland and underground cellars. of Origin, supported by a vineyards cadastre of Vine and Wine (2002). Malaysia. The National Vinothèque is kept at Cricova currently being developed by ONVV. In the Cricova Underground City there are including a collection of legendary wines both PRODUCTION private wine collections of many current and local and foreign, which originate from the former heads of state like Vladimir Putin and Goering’s wine collection, among which the Moldova has 137 000 vine ha and produces 150 million litres of wine and cognacs per annum Angela Merkel or other famous people. Having well-known wines Moselle, Bourgogne, at 193 enterprises, 97% of which are privately owned. The wine-making production was export- ed to 55 countries of the world accounting about US$ 0.2 bn. The fund for supporting planting of grapes was increased by 20% during 2010-2012.

14 15 Bordeaux, and Porto. The oldest wine in the • Branesti Cellars is located at 60 metres depth collection and the only one of its kind in the in the stony hills of the touristic complex world is the wine Easter Jerusalem, produced Orheiul Vechi, the cellars cover approximately in just one batch in 1902. Cricova cellars are 58 km. an attraction for the thousands of tourists. • Chateau Cojusna has underground galleries Cricova has been declared a national cultural in medieval style, with small streets full of patrimony by law. collection wines, particularly liqueurs but also wines kept for ageing. Besides these two institutions, most wineries • Chateau Vartely is a modern winery with a have their own cellars, built in a traditional way. cellar built according to local traditions. Some of these cellars carry the legends of the Finally there are the traditional cellars. According Wine of Moldova. to the Moldovan tradition, every householder • Purcari Winery has cellars which were built must have a cellar to keep the wine made by at the end of the 19th century in the style of the householder. Being a nation with patriarchal a manor house, where the temperature and origins, for Moldovans the house has an impor- EXPORTS humidity are constant. The Purcari tant value. Moldovans’ houses are composed Whereas traditionally Moldovan Wines were position on the Polish, Czech, Romanian, Vinothèque houses the best wines, the price of two basic elements: the “casa mare” – the appreciated by consumers in the East it Chinese and American markets. Moldova of which start from US$100 per bottle. The room where guests are received, and the cellar, recently enticed the Western palate and exported 7.6 per cent of its wines on the US oldest wine in the collection dates back in where food and wine is stored. Traditionally, Moldovan wine continues to expand on the market, while and are 1951. Oak barrels and bottles of wine are peasants’ cellars are dug at 5-7 meters depth international market, exporting 85.1 million the largest EU importers of Moldovan alco- placed for maturation here, before getting under or near the home, having 10-15 stairs litres in 2015. The vast majority of production holic beverages. Moldova has expanded its on the market. and the walls are whitewashed. (70%) is exported in over 50 countries mainly portfolio to the West to include larger exports DOMESTIC CONSUMPTION Belarus, Kazakhstan, Russian Federation, to countries in the EU like the Czech Republic, Ukraine, Czech Republic, Poland, Romania, Poland and Romania. Belarus, Russia and According to a report by the World Health enhancement activities. The first 33 profes- Slovak Republic, the US, and China. It was Kazakhstan were in 2015 still the main import- Organisation (WHO, 2010) the citizens of sional Moldovan sommeliers have been forced to look at non-traditional markets after ers of Moldovan wines (see table 6). Moldova are the world's biggest drinkers, con- trained by French experts, 13 of whom have diplomatic conflicts suming the equivalent of 18.22 litres of alcohol been accredited and achieved a European with Russia. EXPORT OR BOTTLED WINE per year (global average: 6.1 litres per person Sommelier Diploma. The project succeeded in per year). Much of the consumption was made EAST WEST formalising the sommelier profession in There is a focused The CIS states have been traditional markets for A stategic objective of the Maldovan wine up by the unrecorded drinking of bootleg alco- Moldova, which did not exist until 2012, and drive for quality and the Maldovan wine for centuries, currently industry is to diversify its exports by expanding hol. The relatively poor country is a major wine wine culture has been spread to some 1 000 production and accounting for 68% of the total exports, its presence on the Western and the emerging producer, with many people drinking cheap wine amateurs. Moldova also now has a export readiness. compared to 90% in 2004. markets. homemade wine, vodka and other spirits. National Wine Day and several new initiatives, Looking forward, a Belarus USA Besides the drive to increase exports in a including a Wine School, and a Wine Road. 2016 report by the Ukraine Romania number of manners, there is nationally a drive ONVW, states that Kazakhstan Czech Rep. to upgrade the wine culture and domestic Moldovan wines Russian Federation Poland market. Local market assistance was provided have real chances to through wine culture events and trade consolidate their Figure 1: Exporters to CIS versus New Markets

16 17 Table 6: List of leading import markets for wines from Moldova, 2015 sector, with a focus on attracting business of the European Union, it would benefit great- keen to export to the EU. A Moldovan govern- ly from the CAP funding for agritourism and ment subsidy fund provides a list of financial eno-tourism, alternative food networks and incentives to invest in the industry. small enterprises focused on education and Share in Share tity 2015 Importers (US$/unit) Unit value thousand)

2015 (US$ knowledge exchange for young farmers. Moldova's Total import Total

2015 (%, pa) If Moldova does at some point become a part exports (%) Quantity unit between 2011- Exported value partner countries Exported quan - growth in value of growth IMPORTS World 97,719 100 113,444 Tons 861 0 Wines of mainly Italy, France, Chile and the Ukraine find their way to Moldova (see table 8). Belarus 25,441 26 42,791 Tons 595 -2 Moldova imported 830 000 litres in 2015. Russian Federation 9,125 9.3 11,305 Tons 807 -7 Table 8: Leading supplying markets for wines to Moldova, 2015 Kazakhstan 8,230 8.4 4,401 Tons 1,870 2 unit)

Czech 8,007 8.2 7,248 Tons 1,105 -3 sand)

Republic ty 2015 Share in Share Exporters Moldova's Total export Total Poland 7,477 7.7 4,880 Tons 1,532 3 imports (%) 2015 (%, pa) Quantity unit between 2011- Georgia 7,129 7.3 12,721 Tons 560 28 Imported value Unit value (US$/ partner countries Imported quanti - 2015 (US$ thou - growth in value of growth Romania 5,984 6.1 7,996 Tons 748 -9 World 1,578 100 1,011 Tons 1,561 0 China 5,916 6.1 2,599 Tons 2,276 7 Italy 579 36.7 76 Tons 7,618 1 Ukraine 4,886 5 8,260 Tons 592 -12 Area Nes 571 36.2 712 Tons 802 Germany 2,285 2.3 2,685 Tons 851 -3 France 263 16.7 20 Tons 13,150 -2 1,981 2 1,636 Tons 1,211 -3 Ukraine 57 3.6 146 Tons 390 -19 USA 1,794 1.8 864 Tons 2,076 3 Chile 44 2.8 49 Tons 898 2 Latvia 1,418 1.5 822 Tons 1,725 15 Georgia 32 2 5 Tons 6,400 24 Sources: ITC calculations based on UN COMTRADE statistics Croatia 5 0.3 0 Tons -1 Table 7: Moldova's wine exports to South Africa New 5 0.3 1 Tons 5,000 5 Zealand HS Code Description Value in 2015, Annual growth in Share in Australia 4 0.3 1 Tons 4,000 -5 US$ thousand value between Moldova's 2011-2015, %, pa exports, % Romania 4 0.3 1 Tons 4,000 6 2204 Wine of fresh 25 0 25 Spain 3 0.2 0 Tons -1 grapes Germany 2 0.1 0 Tons -4 Sources: ITC calculations based on UN COMTRADE statistics Portugal 2 0.1 0 Tons -2 Moldova’s national wine strategy is to be less brands such as Purcari want to position them- Sources: ITC calculations based on UN COMTRADE statistics dependent on eastern markets. Like many selves as an exotic option for drinkers keen to regions looking to expand in the crowded explore undiscovered wines. Investors are European market, Moldovan growers started taking note. A European Investment Bank in the value segment, aiming to simulate the programme provides up to 50% of financing rise of Chilean and Australian wines. Today for investments in the country’s agricultural

18 19 Table 9: Moldova’s imports from South Africa PRODUCER INCOME AND STATE REVENUE The agricultural sector contributed with 10% the cultural and economic importance of wine, of value added to GDP and employed around the industry struggles to sell more at higher value %, pa Annual Value in Value

Share in Share one-third of the total labour force in 2009. The prices, diversify export markets, and portray between HS Code Moldova, growth in growth thousand 2015, US$ imports, % 2011-2015,

Description economy remains non-diversified, with almost an image of quality wines from a traditional 40% of exports deriving from agriculture or wine country. Overcoming these challenges 2208 Spirits, liqueurs, 56 -3 0.4 agro-processing and more than one-third of will earn increased revenues for small and other spirit bever- ages, alcoholic exports directed towards Russia and the west- large scale producers, increase tourism, foster preparations ern CIS countries. Wine is of significant impor- sustainable business development, and create 2204 Wine of fresh 1 -17 0.1 tance to the Moldovan economy because it is new job. Wine production has since 2012 grapes one of the only products exported with its full been excise exempted. Sources: ITC calculations based on UN COMTRADE statistics value chain completed in country. Even with

INTERNATIONAL POSITION FORECASTS Moldova is the 22nd largest wine-producing country in the world. The Moldovan wine sector has opened new Despite recent progress however, Moldova markets and reoriented exports to the EU, however remains one of the poorest countries GENETIC MANIPULATION AND BIOTECHNOLOGY China, and the US. The Wine of Moldova pro- in Europe with an over reliance on its agricul- There are several research and education insti- framework of the Academy of Sciences of gram and creation of the ONVV are keys to ture sector. Furthermore, the Moldovan tutes in Moldova with activities in plant breeding. Moldova (public sector). It has been involved future success. Moldova has succeeded to Government is notorious for corruption, lack Wine relevant research institutes are the following: in plant breeding research for about 20 rethink the wine industry strategic develop- of transparency and solid support for industri- • The National Institute of Wine and Viticulture years, and 15 years in plant biotechnology. ment, ease regulatory system, establish a new al-scale grape and wine production. Currently, Research (NIWVR) was founded in 1910 and It is composed of 11 laboratories. Among industry management model and repositioned there is an anti-corruption campaign going on is the main scientific institute which carries out them two are dedicated to plant breeding market focus. One valuable result was to form raising hope that the general business environ- research on grape breeding. It has been activities. The research focuses on the unique voice of the wine sector, which con- ment will improve over time. involved in plant breeding research for 90 years genetic and molecular control of traits of ducted to establishing a public-private partner- Despite the aforementioned negative situation, and in plant biotechnology for 5. At present the importance (yield, resistance, and quality), ship (PPP), throughout the creation of the the long-term impact of Moldova on the glob- Institute is a public organization with the man- protection of genetic resources, and ONVV. Competitiveness in the sector will al wine trade, especially Western Europe, date of conserving grape genetic resources, advanced technologies and methods of probably continue to develop by deepening should not be underestimated. This will developing new varieties and clones of grapes, breeding, including biotechnologies. regulatory reforms, streamlining controls, and increase competition in the fairly stagnant development and improvement of technologi- • The Centre of Scientific Research ensuring a sustainable quality framework European consumer markets. cal procedures in plant breeding, viticulture and “Magroselect” is a private institution founded which will transform Wine of Moldova into a wine production, creation of new types of wine, in 1999 by the agriculture company with the growing brand in quality markets. This in turn sparkling wines, divines, and other strong same name. It is involved in plant breeding will continue attracting foreign investment. drinks. As a result of the long-term activity of since its foundation. The principal objective the institute, they have developed 250 new of activities of the Centre is to develop new forms and varieties of grapes. plant varieties and hybrids of agricultural • The Genetic Research Institute (GRI) was plants, including sunflower, sugar beet, for- launched in 1985. It was created in the age beet and buckwheat. There are 22 scientific researchers engaged in the Centre.

20 21 • The region of Central Anatolia is the most climatically difficult region to produce wine, TURKEY with most vineyards being located at alti- tudes near 1 250 meters above sea level. BRIEF BACKGROUND Turkey’s size and geography give rise to a The vineyards of Eastern Anatolia around wide climatic variation in its wine regions: Turkey is a transcontinental Eurasian country Elazığ, Malatya and Diyarbakır produce in the Caucasus region where Georgia and • Thrace along the Sea of Marmara has slight amongst others Buzbağ and are located in Iran are and which, according to literature, Mediterranean climates that resemble those the Euphrates valley. This is one of the played a pivotal role in the early history of wine. of neighbouring southwest Bulgaria and world's oldest wine regions and the anec- Turkey began producing wine six thousand northeast Greece. Thrace is where 40% of dotal location of Noah's vineyards from the years ago when it was still known as Anatolia. is made and the vast majority 9th chapter of Genesis. The biblical accounts There are signs of this early wine industry dat- of its top quality wine, carrying the growing of Noah after the flood has him planting a ing back to 4 000 B.C. in the Museum of region name of Marmara (for the Sea of vineyard near the area where the ark landed. Anatolian Civilizations in Ankara. The ancient Marmara). This area is responsible for near- This area is presumed to be Mt. Ararat where word for wine by this pre-Hittite civilization was ly 40% of Turkey's wine production. Kirklareli Buzbağ is still being produced today by the actually Vino. Mustafa Kemal Atatürk, Turkey's is a sub region of Thrace and known for state run vineyards of Tekel near the town of first president, established Turkey’s first com- crisp white wines and fine reds. Elazığ by the Euphrates River. Mustafa Kemal Atatürk mercial winery in 1925. Today, Turkish wines • The wine regions along the Aegean coast, are still among the more obscure wines glob- near İzmir and accounts for 20% of the AREA UNDER VINES ally albeit emergent. Furthermore, Turkey as a country's wine production. It has a With 497 000 ha planted under vine, Turkey is the fifth largest country in terms of vineyard acreage favoured tourist destination has started explor- Mediterranean climate with mild winters and and almost twentieth in terms of wine production. It has about 7% of the global area of vineyards. ing the development of eno-tourism. warm, dry summers. With more than 5 300 ha of vineyards, Kavaklidere Winery is the largest winery in Turkey.

22 23 CULTIVARS There are numerous options that Turkish wine- popular red wine grapes are Kalecik Karasi makers can pursue to make wine. Some of the perhaps the best red known for its figs, roses There is 1 250 different grape varietals in Turkey and only about 32 of these grape varietals are native Turkish varieties include the Yapıncak and strawberry notes, Karasakiz a simple wine used for wine (22 of them being indigenous) (see table 10). The rest is used for raisins. and Papazkarası grown in Thrace; the that adds some body, Çalkarasi which pro- Table 10: Grape varieties Sultaniye of the Aegean coast; the duces fruity wines, and Öküzgözü is Öküzgözü and Boğazkere (used to known for strong acidity and fruity floral Region White grapes Red grapes make Buzbağ) of Eastern Anatolia; the wines. The most well-liked white Marmara (Thracian) Region Sauvignon blanc Cabernet Sauvignon Çalkarası of the Denizli Province in grapes include Emir which produces Clairette blanche Merlot Western Anatolia and the Kalecik dry unique wines, Narince, possibly the Chardonnay Cabernet Franc Karası, Narince and Emir of Central Anatolia. best white as it turns out rich wines capable of Riesling Pinot Noir Sauvignon Gris Adakarası Buzbağ is a full flavoured red wine made from ageing and Sultaniye a low acid easy to drink Pinot Gris Papazkarası Boğazkere grapes with high tannin levels. It is fruity wine. In recent years, some of the inter- Sémillon Sémillon sometimes produced in an ice wine fashion national grape varieties have increased their Beylerce Kuntra with the grapes allowed to hang on the vine till presence, including Sémillon (known as Trakya) Yapıncak Gamay and Karalahna the first frost and then crushed while the Riesling, Muscat, Gamay, Cinsault, Grenache, Vasilaki, Viognier, Alvarinho, Narince Cinsault, Malbec, Petit Verdot grapes are still frozen. Some of the most Carignan, Cabernet Sauvignon and Merlot. Aegean Region Sémillon Carignan Sauvignon blanc Çal Karası Chardonnay Merlot CERTIFICATION SYSTEMS Chenin blanc Cabernet Sauvignon Turkey is a bureaucratic challenge in terms of some impetus as well. Mey/Diageo Turkey has Viognier Alicante Bouschet certification, registration, licenses and taxes. A opened a facility in Istanbul called IWSA, for Muscat blanc à petits grains Shiraz Bornova Misketi Kalecik Karası secular, but mainly Muslim country has a low International Wine and Spirits Academy. It is Pinot noir consumption of alcohol and in keeping with its the only location in Turkey where interested Sangiovese Islamist roots, Turkey’s ruling Justice and students can pursue WSET certification (Wine Montepulciano Development Party (AKP) has been focused & Spirit Education Trust, the leading London- Grenache on curbing the industry. Turks are urged to based organization for educating both profes- Tannat Petit Verdot stop drinking or at least do so only at home. sionals and amateurs). LA Wines, an organic Cabernet Franc Significant tax rises since 2004 have more winery has Turkey’s largest single parcel vine- Black Sea Region Narince Öküzgözü than trebled in real terms. Sales of counterfeit yard of 116 ha and is the first Turkish organic Boğazkere alcohol, some of it deadly, is rising. According vineyard that received the Ecocert Certificate. Central Anatolia Region Emir Kalecik Karası to the OECD, perhaps 29% of the liquor con- Despite strict regulation curbing production Hasandede Papazkarası sumed in Turkey is sold illegally. The tax rises and consumption, the good news for Turkish Dimrit on wine have not been so drastic, but wine- wines is that quality has improved markedly in Mediterranean Region Kabarcık Sergi Karası makers are suffering from the same strong Dökülgen Burdur Dimriti the past decade. Producers, having invested curbs on marketing as other producers of in new technology and outside consultants, Eastern Anatolia Region Narince Öküzgözü alcohol. Kabarcı Boğazkere have begun to win awards in international As exports increase and the industry grows in competitions. Upstarts have prised a share of Southeastern Anatolia Region Dökülgen Horoz Karası Kabarcık Öküzgözü quality, the number of vineyards under the the market from the country’s five leading wine- Rumi Boğazkere certification of Good Agriculture Practice (GAP) makers. The new boutique companies have Sergi Karası is increasing. Foreign investment provided pushed the big ones to make better wine.

24 25 PRODUCTION DOMESTIC CONSUMPTION Only about 3% of grape production is used to Doluca is one of the most common wines In Turkey, the typical wine consumer is young, new curbs on domestic sales. Ironically, the make wine, the rest are table grapes (52%), for displayed. Doluca produces over 40 products, very interested in western custom and willing stricter rules are happening just as its wines raisin (38%) and fruit juice (7%). Grape growing with a 14 million bottle annual capacity. Arcadia to try new things. Consumption is almost are getting better. Those made from indige- is the largest commercially grown fruit industry Vineyards and Chamlija Wine are also notable. occasional; wine is consumed mainly in spe- nous grapes like okuzgozu and bogazkere are in Turkey. Raisins and table grape productions In Izmir, Urlice Winery released their first vintage cial circumstances. Selling wines DTC (Direct igniting international interest and many bou- are the largest and predominant of the two in 2008. They are also involved in the Slow to Consumer) is an increasingly important and tique producers were established over the viticulture industries. A feature of recent indus- Food movement, which compliments their popular strategy for wineries. Urla Winery sells past 15 years. try expansion has been the increased planting winery efforts. Mozaik Winery, a family owned 40% of its production DTC, and Barbare Law prohibits any sort of promotion of alcohol, of varieties specific to the region. Sultana is the winery uses organically grown grapes. The 14 Winery counts more than 1,500 subscribers to including ads, sponsorship deals, product most important variety for raisin and table ha vineyard was planted in 2008, with its first its wine club. Though the government justified placement or even wine tastings. The regula- grape. New varieties have been developing in vintage in 2010. The winery uses an Italian a strict law as a way to reduce alcohol con- tions make it illegal for shops to sell alcohol last two decades and there is innovative devel- agronomist and oenologist in the production of sumption, Turks drink only 1.6 liters per per- between 10 p.m. and 6 a.m. and to display opment of modernisation in the vineyards, their wines. Urla Winery vineyards of 40 ha are son annually, compared to 10.7 in the bottles where they can be seen from the street. particularly in the table grape and raisin indus- bio dynamically farmed. A part of the vineyards European Union, according to a 2012 New restaurants and shops near schools or tries through modern production practices. includes an ancient terrace where evidence of Organization for Economic Co-operation and mosques can’t offer wine at all. The most Development (OECD) health study. A 2011 According to the OIV, the total wine production early wine production was found. sweeping -- and vague -- part of the law is its Turkish Statistical Institute survey found 83% in 2005 was 28.7 million litres. Due to strict In the Aegean, LA Organik is fairly new and prohibition on advertising and promotion. If do not drink at all. Turkey’s revived wine indus- regulations, production, having more than makes wine from organic grapes and has in someone comes to a winery they may not be try is looking to exports to grow it. doubled between 2006 and 2010 to 58 million their first year won international acclaim in offered a glass of wine. For new wines, it is litres, has since stalled, as has domestic con- Decanter magazine. Büyülüag winery pro- According to Euromonitor International wine near impossible to create brand awareness. As consumption in Turkey reached 67 000 000 a result, a wine industry that had seemed on sumption. Some firms have given up on wine- duces mostly international varietals while the litres in 2015. Its more than 100 wineries face the verge of a breakthrough is now plateauing. making turning instead to grape juice. Pamukkale is a winery that began in the There are five main wine producing regions, 1960’s as a bulk winery but made a commit- Marmara and Thrace, Aegean, Central ment to quality in the 1970’s. They also pro- Anatolian, Mediterranean, and the South East. duce mostly international varietals. Finally there The diverse climate means that the main wine is a former state-run winery now co-owned by growing areas have warm summers while the Diageo originally called Tekel and now winters tend to be mild. Likewise the soils are renamed as Mey/Diageo. quite diverse but include areas with volcanic EXPORTS and sandstone soils. Some of the better Reined in at home due to regulations and strict Although the government has banned all mar- known wineries are in Thrace and Izmir and the controls, wine companies are seeking a bigger keting to domestic customers, it subsidises Aegean. Gülor Winery, founded in 1993 by share of foreign markets. About 30 of them the promotion of wine to foreigners. The top Güler Sananci, was the first Turkish boutique have grouped as Wines of Turkey, a group that destinations for Turkish wine include Belgium, wine producer. Gülor Winery has also been promotes exports. Having slipped from about Germany and Britain, each of which has size- credited with introducing international grapes 3 million litres in 2004 to 2.2 million litres in able Turkish minorities and numerous Turkish into the country. Doluca Winery, a third gen- 2010, Turkey’s wine exports revived to 3.4 restaurants (see table 11, next page). eration family winery, was established in 1926. million litres in 2015.

26 27 Table 11: Importing markets for wine from Turkey in 2015 IMPORTS Imports are heavily taxed: from 70% duties on imports from the US to 50% on imports from the EU. The leading exporters of wine to Turkey are Italy, Chile and France (see table 12). Turkey imported 1.7 million litres in 2015. Table 12: List of wine exporters to Turkey in 2015 Importer Exported value 2015 (US$ thousand) balance 2015 (US$ Trade thousand) Exported quantity 2015 Quantity unit Unit value (US$/unit) in value Exported growth between 2011-2015 (%, pa) in Exported growth quantity between 2011- 2015 (%, pa) in value Exported growth between 2014-2015 (%, pa) in import growth Total value of partner countries between 2011-2015 (%, pa) World 10,543 -843 4,472 Tons 2,358 6 4 -6 0 Free Zones 2,578 2,578 1,331 Tons 1,937 20 23 -49 20 Cyprus 1,881 1,881 811 Tons 2,319 -54 -1 2 Exporter Imported value 2015 (US$ thousand) balance 2015 (US$ Trade thousand) Imported quantity 2015 Quantity unit Unit value (US$/unit) in value Imported growth between2011-2015 (%, pa.) in quan - Imported growth tity between 2011-2015 (%, pa) in value Imported growth between 2014-2015 (%, pa in )export growth Total value of partner countries between 2011-2015 (%, Belgium 1,460 1,460 870 Tons 1,678 -8 -7 -28 -3 World 11,386 -843 2,201 Tons 5,173 16 6 -27 0 UK 1,188 1,188 331 Tons 3,589 24 12 16 -4 France 6,151 -6,102 534 Tons 11,519 22 4 -23 -2 Germany 1,081 902 455 Tons 2,376 4 -1 -21 -3 Italy 2,703 -2,703 767 Tons 3,524 11 7 -29 1 USA 863 682 230 Tons 3,752 13 7 1 3 Chile 1,351 -1,351 527 Tons 2,564 14 11 -15 2 China 733 733 183 Tons 4,005 49 52 186 7 Spain 230 -230 52 Tons 4,423 20 9 -40 -1 Canada 154 154 62 Tons 2,484 53 65 152 -1 USA 181 682 43 Tons 4,209 -1 0 -43 3 Brazil 106 106 32 Tons 3,313 1 Ger- 179 902 57 Tons 3,140 40 40 -67 -4 Japan 74 74 33 Tons 2,242 -24 -22 -60 3 many Poland 52 52 12 Tons 4,333 3 Portu- 149 -149 66 Tons 2,258 34 19 19 -2 France 49 -6,102 18 Tons 2,722 -16 -20 -26 -2 gal Hong Argen- 131 -131 29 Tons 4,517 16 1 -28 -2 Kong/ 45 45 7 Tons 6,429 81 70 -4 2 tina China Georgia 79 -79 31 Tons 2,548 -6 -17 -22 24 Denmark 41 41 6 Tons 6,833 56 46 58 -2 Mol- 74 -74 54 Tons 1,370 -8 Sources: ITC calculations based on Turkish Statistical Institute (TURKSTAT) statistics dova New 58 -58 7 Tons 8,286 -1 1 29 5 Zealand South 56 -56 20 Tons 2,800 18 20 -45 -3 Africa

Sources: ITC calculations based on Turkish Statistical Institute (TURKSTAT) statistics

28 29 Imported wine and alcoholic beverages must the product was produced in accordance GENETIC MANIPULATION AND BIOTECHNOLOGY have a Turkish label put on to the bottle during with local laws and regulations, is “fit for According to the Research Institute of Organic have been studied for evaluation. production or prior to arrival to Turkey. The human consumption” and is “freely mar- Agriculture (FiBL, 2016), Spain now wears the • 104 grape varieties registered since 1990 by Ministry of Agriculture (MARA) will not accept keted in the country origin”) international organic crown with around 80 different institutions. bottles with stickers. Labeling Specific to Wine: • Commercial Activity Certificate (must only be 000 ha now organically farmed. In the next • Almost all local important varieties under- • Name of winery presented for the first application; not places come France (61 055 ha), Italy (52 812 clonal selection. • Vintage year required for subsequent applications) ha), the USA (11 448 ha), Turkey (8 871 ha) • New table and raisin varieties, and resistant • Colour • Trade Registry Gazette (this is required only and Germany (7 500 ha). A substantial to powdery mildew and downy mildew vari- • Variety if the Commercial Activity Certificate does research, development and extension effort in • Volume of the bottle not indicate specific commercial activities of eties have been developing by cross breed- Turkey continues to generate practices that • Percentage of alcohol the importing firm and does not cover the ing studies. improve production efficiency and grape qual- • Name and percentage of ingredients imported item in question) • Mutant breeding studies concentrated on • Importers name and address The following documents may also be required ity and bio wineries are increasing in number. some quality parameters of local table Regarding GM (Genetically Modified) Food by customs upon entry to Turkey: The Turkish Ministry of Food Agriculture and grapes. Labelling, there is currently no legislation regu- • Bill of Lading and/or Airway Bill Livestock (MFAL) has basic research programs • Some globally important table and wine lating the import of agricultural biotech prod- • Commercial Invoice such as breeding, local adaptation and quality grape varieties tested in some locations. ucts for food. However, there have been • Packing List proofing. MFAL has one central agricultural • Organic management practices have been problems importing products that have been • Certificate of Insurance research institute that is Yalova Atatürk improving. labelled as containing GMOs. The report cites In order to import any foodstuff, an importer Horticultural Research Institute (YAHRI) and 11 • Early production have been promoting in that “There are no labelling requirements for must first submit a written application to the specified Research Institute and/or stations. greenhouses by new varieties. foods or feeds”; however, if it is labelled, it will relevant Provincial Directorate Authority. No The Manisa Viticulture Research Station (MVRS) • Different management practices tested. likely be rejected at customs on the basis that products may be imported until the directorate and the Tekirdağ Viticulture Research Station • Quality retention of table grapes has been a lack of regulations on biotech products is has issued an import license (Kontrol Belgesi). (TVRS) are in this category. There are also 11 tested with some organic extracts, physical grounds for refusing them. The importer will normally receive written regional research institutes and/or stations. The treatments and pre-harvest applications. The following documents are needed in order to approval along with an approved import license Scientific and Technological Research Council The YAHRI registered 8 varieties i.e. Ata obtain an Import License for alcohol products: from the Provincial Directorate Authority. of Turkey (TUBITAK) has been contributing to Sarısı, Yalova İncisi, Yalova Beyazı, Yalova • Cover letter to application Upon entry of the product at customs, the agricultural R&D by projects given to universi- Çekirdeksizi, Ergin Çekirdeksizi, Samancı • Control Certificate form importer should be prepared to present the ties, research institutes and private sector Çekirdeksizi (white); Uslu (purple red), Yalova • Pro-forma Invoice import license obtained from the Provincial actors. The Industry and Technology Misketi (black). TVRS registered 10 varieties • Specification Document Directorate Authority, as well as other normal Department and the Ministry of Science, and these are Barış, 261, Tekirdağ Sultanı, • Component List import documentation such as the bill of lading, some private sector investors are the other original invoice and certificate of origin. In addi- Bozbey, Tekirdağ Misketi (white); • Distribution Certificate (provided by the pro- authorities involved in viticulture R&D programs. ducer’s company to the importer and/or tion, the importer should be prepared to present Trakyaİlkeren, 56, Özer Karası (black), Indeed at present, there is a new focus on distributor indicating that the Turkish com- the exporting company’s analysis report and a Tekirdağ Çekirdeksizi (purple red, Güz Gülü viticulture R&D studies and achievements: pany is authorized to market and deliver the Certificate of Free Sale. Officials take samples of (pink). The MVRS registered 5 Sultani clones product in Turkey) the imported product to government laborato- • 1 250 local grape varieties collected in these are Altın Sultani (raisin), Manisa Sultanı • Certificate of Origin (also required by Customs) ries for analysis. The product is allowed for National Grape Collection Vineyard at the (table grape), Saruhan Bey (raisin),Sultan1 • Label importation if the results of the analysis are TVRS. (table grape & raisin), Sultan7 (raisin). • Certificate of Free Sale (usually issued by a found to be acceptable, and if the imports have • 900 of them described. State or local authority and indicates that been approved by the Ministry of Agriculture. • Local and performance of selected varieties

30 31 TAXES AND PRICES (GRAPES, PACKAGED WINE, BULK WINE, SPIRITS) In other words, Turkey is among the countries with free trade agreements between a number Turkey imposes some of the highest taxes on The main recent tax-imposing years were which impose the highest taxes on wine sales of countries, Turkey charges a predetermined wine sales in Europe due to the political 2002, 2005 and 2011. Figure 3 clearly shows in Europe. When considered in terms of GDP, tax according to the origin of wines to be approach of government and a VAT of 18% is the last decade’s wine production and sales in Turkey has the highest taxes in Europe. The imported. For example, they impose a tax of alsos the quantity of wine production and Turkey. enterprises in Turkish wine sector state that 50% for Croatia, Macedonia and Tunisia, 35% sales declines, the sales value (including taxes) the high tax systems are due to the political for Syria, 29% for Israel and 4% for Morocco Figure 3: Recent wine sales and production of wine increases. approach of the government and as for Value based on the tariff quotas valued by the CIF. in litres Added Tax, a general rate of 18% is imple- All other countries must pay a 70% customs Figure 2: Impact of high wine taxation on mented. % Customs Tax is imposed on the tax to Turkey for imported wines. prices after 2002 goods from the EU and EFTA. In accordance

FORECASTS Despite its 6 000 year winemaking tradition, Turkish or foreign brands). Already players like the Turkish wine industry is really at its infancy. Diageo have seen shares fall when Turkey’s As capital flows into the region, vineyards will parliament passed the alcohol ad ban. The be developed, better winemaking facilities will export market to Turkey is small and the be built and the indigenous varietals will be domestic consumption is highly limited and Source: Wine Economics developed. There is growing enthusiasm for concentrated making it a less lucrative market wine making in Turkey. than other non-traditional wine markets. Source: Wine Economics Turkey’s strict legislation re the advertising and With 1.7 million litres exported and keeping the promotion of alcohol on TV including scenes current domestic situation in mind, Turkey will PRODUCER INCOME AND STATE REVENUE that depict drinking, and the sale of alcohol hardly impact on the global wine trade over There are implicit negative incentives for wine mentation, the SCT rate has been changed for between 10pm and 6am will encourage the the short-term. production, such as the problematic institu- five times. Currently, there is a 63.3% SCT for counterfeit spirits market to grow and inhibit tional structure of tax collection. If a wine fresh grape wine and 275.6% SCT for spar- new comers to enter the market (be they producer, for instance, sells 100,000 litres of kling wines and other wines as well as an 18% wine, the producer has to pay almost 200,000 Value-Added Tax. Wine enterprises also suffer liras as private consumption tax within 15 from these high taxes, which increase the days. Wine producers are expected to subsi- share of unregistered economy in wine sector. dise this money in this case. Wine companies However, following the amendments, mini- have to take out bank loans to pay taxes, mum fixed prices, which were not included at which means paying constant interest to keep first, were determined. And it was stated that the business running. Implementation of spe- the value which would be determined accord- cial consumption tax (SCT)1 started to be ing to announced rates cannot be below 3.28 applied in Turkey in August 2002. At first, it YTL/Lt for fresh grape wine and 11 212 YTL/ was agreed that a tax rate of 48.7% would be Lt for sparkling wine and others. As these imposed on fresh grape wine, and a tax with taxes change continuously, it is advised that a rate of 212% would be imposed on sparkling potential exporters make sure that they have wine. Within the first three years of the imple- the most current tax tables at hand.

32 33 ENDNOTES ENDNOTES

The Guardian: www.theguardian.com/world/2014/ Carton: 6 bottles Colour: Red www.timeslive.co.za/lifestyle/2014/07/20/ethiopian- jul/23/first-bottles-ethiopian-wine-castel Colour and bouquet: Golden white colour wine with Bottle: 750ml Vintage with screw cap wine-raises-cheer-for-economy www.ethiopianembassy.be/blog/2015/05/12/the- aromas of peach and a slight hint of sweetness Carton: 6 bottles Cover photo: Artwork at Castel Winery; sourced from wine-sector-in-ethiopia/ www.thirdeyemom.com Wine Brand Line: Castel winery - Rift Valley Merlot Colour and bouquet: Brilliant deep red colour, intense Castel Product Portfolio Wine Type: Merlot aromas of green pepper and mixed spies with a The USAID’s Development Credit Authority (DCA) Wine Brand Line: Acacia Dry Red supple and well-rounded body. Activity supports the implementation of USAID’s Vineyard: Ziway, Ethiopia Competitiveness Enhancement and Enterprise Vineyard: Ziway, Ethiopia Grapes: Merlot variety grapes imported from Wine Brand Line: Castel winery - Rift Valley Development (CEED II) Project, by providing Grapes: Blended Grapes Imported from Bordeaux Bordeaux and grown in Ziway Chardonnay loan portfolio guarantees to selected financial and grown in Ziway Vineyard Vineyard Farming Method: Organic Farming and Vineyard: Ziway, Ethiopia institutions (Prime Capital, Comertbank and Vineyard Farming Method: Organic Farming and Sustainable Agriculture Method Grapes: Chardonnay variety grapes imported from Rural Finance Corporation) to encourage them to Sustainable Agriculture Method Maceration: Cold Skin Maceration Bordeaux and grown in Ziway increase financing for local small and medium size enterprises (MSMEs) engaged in target industry Fermentation: In stainless steel tank with thermo Fermentation: In stainless steel tank with thermo Vineyard Farming Method: Organic Farming and regulated temperature Sustainable Agriculture Method clusters/value chains and emerging export regulated temperature industries. The (DCA) Activity in Moldova aims to Ageing: Stainless steel tanks Ageing: Stainless steel tanks Harvest: Picking and sorting manually improve access to credit for SMEs operating in Bottle: 750ml with screw cap Colour: Red Maceration: Cold Skin Maceration selected sectors in Moldova through providing Carton: 6 bottles Bottle: 750ml Vintage with screw cap Fermentation: In stainless steel tank with thermo loan guarantees to Moldovan financial institutions. regulated temperature Colour and bouquet: A deep ruby red colour with Carton: 6 bottles www.fao.org/fileadmin/user_upload/Europe/ warm spicy notes. Ageing: Stainless steel tanks documents/Publications/AI_briefs/Moldova_ai_ Colour and bouquet: Deep red colour with intense en.pdf Wine Brand Line: Castel winery - aromas of fruits and spices. Colour: White Acacia Medium Sweet Red http://wineofmoldova.com/en/ Wine Brand Line: Castel winery - Rift Valley Syrah Bottle: 750ml Vintage with screw cap Wine Type: Medium Sweet Red Visiting the Vine and Wine World of Moldova Vineyard: Ziway, Ethiopia Carton: 6 bottle Vineyard: Ziway, Ethiopia October, 2015 www.arc2020.eu/2015/10/visiting- Grapes: Syrah variety grapes imported from Colour and bouquet: White wine with a touch of vine-wine-world-moldova/ Grapes: Blended Grapes Imported from Bordeaux Bordeaux and grown in Ziway golden colour. Flavours of peach and apricot. and grown in Ziway Vineyard Crisp and refreshing with dominant aromas of http://pdf.usaid.gov/pdf_docs/PA00KHSJ.pdf Vineyard Farming Method: Organic Farming and honey. www.fao.org/fileadmin/user_upload/Europe/ Vineyard Farming Method: Organic Farming and Sustainable Agriculture Method Sustainable Agriculture Method https://arefe.wordpress.com/2014/02/25/ethiopias- documents/Publications/AI_briefs/Moldova_ai_ Harvest: Picking and sorting manually en.pdf Fermentation: In stainless steel tank with thermo new-wine-brand-to-go-on-sale/ Maceration: Cold Skin Maceration regulated temperature www.awashwines.com/#our_wines http://www.chemonics.com/OurImpact/ Fermentation: In stainless steel tank with thermo SharingImpact/ImpactStories/Pages/ Ageing: Stainless steel tanks https://addisfortune.net/articles/bob-geldof-gives- regulated temperature Strengthening-the-Moldovan-Wine-Sector-from- Bottle: 75 cl with screw cap ethiopian-wine-a-boost/ Ageing: Stainless steel tanks Grape-to-Glass.aspx Carton: 6 bottles http://addisfortune.net/columns/a-less-wining- www.intowine.com/wine-turkey-turkish-wine- Colour: Red nation/ Colour and bouquet: Fruity notes with a touch of regions-history-varietals-and-producers Bottle: 750ml Vintage with screw cap sweetness that can be enjoyed any time with any http://ethiopianbusinessreview.net/index.php/ www.thespiritsbusiness.com/2013/06/ company Carton: 6 bottles focuss/item/317-can-castel-emerge-as-a-top- turkish-alcohol-ad-ban-will-encourage-illicit- wine-producer-in-ethiopia-what-the-french- Wine Brand Line: Castel winery - Acacia Medium Colour and bouquet: Full bodied ruby red wine with booze/?article-source=newsletter&source= company%E2%80%99s-presence-in-ethiopia- Sweet White a rounded palate and with notes of dark roasted 67&date=2013-06-20 means-for-the-local-wine-sector-importers Wine Type: Medium Sweet White Coffee. www.ttb.gov/itd/turkey.shtml www.timeslive.co.za/lifestyle/2014/07/20/ethiopian- Vineyard: Ziway, Ethiopia Wine Brand Line: Castel winery - Rift Valley www.fas.usda.gov/gainfiles/200507/146130406. Cabernet Sauvignon wine-raises-cheer-for-economy Grapes: Blended Grapes Imported from Bordeaux pdf. Vineyard: Ziway, Ethiopia http://ethiopianbusinessreview.net/index.php/ and grown in Ziway Vineyard focuss/item/317-can-castel-emerge-as-a-top- www.prowein.com Vineyard Farming Method: Organic Farming and Grapes: Cabernet Sauvignon variety grapes imported wine-producer-in-ethiopia-what-the-french- Turkey Wine Industry Investment and Business Sustainable Agriculture Method from Bordeaux and grown in Ziway company%E2%80%99s-presence-in-ethiopia- Opportunities Handbook, 2009 Maceration: Cold Skin Maceration Vineyard Farming Method: Organic Farming and means-for-the-local-wine-sector-importers www.wine-economics.org/aawe/wp-content/ sustainable Agriculture Method Fermentation: In stainless steel tank with thermo www.timeslive.co.za/lifestyle/2014/07/20/ethiopian- uploads/2013/10/AAWE_WP143.pdf regulated temperature Maceration: Cold Skin Maceration wine-raises-cheer-for-economy www.wineecoreports.com Ageing: Stainless steel tanks Fermentation: In stainless steel tank with thermo http://blogs.wsj.com/briefly/2015/03/30/why- regulated temperature private-equity-is-moving-into-ethiopia-at-a- Bottle: 750ml with screw cap Ageing: Stainless steel tanks glance/

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