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Russian embargo still causing problems for Georgian exports

By M. Alkhazashvili
(Translated by Diana Dundua)
Friday, January 4
The embargo that Russia imposed on Georgian wine and mineral water in spring 2006 has altered the country’s export structure, the newspaper 24 Saati reports.

Moscow banned the import of Georgian wine in March 2006, after the head of Russia’s consumer rights watchdog alleged that traces of pesticides had been found in the Georgian product.

The move dealt a sharp blow to Georgian winemakers, as the Russian market bought up the majority of their product—in 2005 an estimated 74 percent of Georgian wine went to Russia—and wine has slipped down the list of Georgia’s biggest exports.

The problem was compounded in April 2006 when Moscow banned mineral water, another major Georgian export to Russia.

Estimates of the total losses for Georgia’s export trade since the embargo are put at USD 70 million by 24 Saati. Wine has slipped from third to ninth place on the list of Georgia’s biggest exports, while mineral water has disappeared from the top ten.

The government has sought alternative markets with mixed success. Wine export to Ukraine increased by 48 percent, to Belarus by 160 percent, Poland by 136 percent and Kazakhstan by 506 percent. Meanwhile Borjomi mineral water export to Ukraine increased by 50 percent, to Azerbaijan by 75 percent and Kazakhstan by 60 percent. However, Tbilisi has a long way to go to replace the Russian market.