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News 23 November 2015, at 11:00

Moldovan winemakers turn their eyes to the west

Marime Font

Moldovan winemaker Purcari’s Freedom Blend was created in 2011 to commemorate Moldova, Georgia and Ukraine’s 20 years of independence from the Soviet Union. But it took on another meaning when Russian tanks rolled into Crimea last year.

Purcari’s creation is a blend of wines from all three countries. However, in Moldova’s capital Chisinau, wine enthusiasts joke that instead it represents lands partially invaded by Russia, including not just Ukraine’s Crimea peninsula but the occupied territories of South Ossetia in Georgia and Moldova’s own disputed Transnistria region.

In recent centuries Moldova’s wine industry has relied heavily on custom from its eastern neighbours, none more so than Russia. But that is now starting to change. Strained by geopolitics and hurt by periodic import bans imposed by Moscow in retaliation for Moldova’s friendship with the EU, the country’s vineyards are turning west for investment and new export markets, keen to project themselves as a modern region with a rich history.
“There is a regional crisis and these traditional markets do not work for us any longer,” says Dumitru Munteanu, director of the National Office for Vine and Wine, the industry’s lobby group. “Our strategy is to be less dependent on eastern markets. We are trying to reorientate our exports to find more opportunity and more reliable partners.”



In 2004, 90 per cent of Moldova’s wine exports went to other parts of the former Soviet Union, with almost 40 per cent going to Russia. Last year 68 per cent of the 67m bottles of wine exported from Moldova, worth $156m, went east. The industry’s aim, Mr Munteanu says, is to reduce that to 33 per cent before the end of the decade.
“Until 2006, major investments that came to the wine sector were Russian. But then the first Russian ban was imposed and since then more and more interest has come from Germany, the US and the west,” Mr Munteanu says. “Many growers understand that without a reliable partner outside the country, it is very hard to access markets.”

Wedged between Ukraine and Romania, Moldova’s geography plays an integral part in an industry that produces 15m decalitres of wine each year, according to Wine of Moldova, a government trade promotion body.

Rolling hills abound, with the slopes of valleys accounting for almost 60 per cent of the country’s surface area. A long summer also helps: Moldova’s latitude matches that of Bordeaux and Burgundy. The Moldovans say that they have wine in their blood. “For us, it is . . . a key element of our national identity,” says Victor Bostan, chief executive at Purcari Winery. Purcari sells 65 per cent of its wine in the EU, thanks to strong growth in countries such as Romania and Poland.

Like many regions looking to expand in the crowded European market, Moldovan growers started in the value segment, aiming to ape the rise of Chilean and Australian wines. Today brands such as Purcari want to position themselves as an exotic option for drinkers keen to explore undiscovered wines.

Investors are taking note. The past seven years have seen 30,000 hectares of vine plantations in the country, says Wine of Moldova, with €330m of investments in land, production equipment and technology over the past decade.

A European Investment Bank programme provides up to 50 per cent of financing for investments in the country’s agricultural sector, with a focus on attracting business keen to export to the EU. A Moldovan government subsidy fund provides a list of financial incentives to invest in the industry. Mr Munteanu says investors as far away as China, South Korea and Nigeria are taking an interest in his country.

ft.com


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