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08/12/2005

Protecting Georgian wine appellations against counterfeits

On 1 December 2005, FAO's Investment Centre organized a workshop in Tbilisi, in cooperation with the Ministry of Agriculture of Georgia and wine agency SAMTREST, to formulate a series of concrete actions to combat wine counterfeiting in Georgia.

Georgia has a long tradition in winemaking. Today, wine is the third export earning sector, generating more than US$80 million a year. Some Georgian wines, such as Kindzmarauli or Khvanchkara, are well known in Russia and Ukraine. Although the wine sector has grown considerably in recent years, counterfeiting of Georgian wine appellations has hampered its development. Georgian authorities are trying to solve the problem by setting up better control systems. For the 2005 harvest, they have been very successful in limiting wine counterfeiting within Georgia. However, on foreign markets, the situation is not really improving.

"In Georgia's main export market, almost 9 out of 10 bottles of wine bearing Georgian appellations are counterfeits. This has a tremendously negative impact on the Georgian wine industry. Some action must be taken," said Frederic Julia, an international wine expert who participated in the workshop. The workshop was commissioned by the European Bank for Reconstruction and Development (EBRD) and financed by FAO and Canada. Key players in the wine sector, from government officials to representatives of the private industry and the donor community participated. The main difficulty identified was that Georgian wine appellations are collective marks. Contrary to brands owned by individuals or companies, appellations are the common property of the people of a region. To defend the appellations, collective action is needed, involving both the private wine companies, as they are the direct victims and have the financial resources to fight against counterfeiting, and the Government authorities, as they are the custodian of wine appellations.

Participants agreed that FAO would help the wine sector set up a public-private body, similar to ones existing in other wine exporting countries, to protect Georgian wine appellations. FAO will also assist with training government officials in multilateral and bilateral negotiations, improving traceability of bulk wine and transferring international know-how on protection of appellations. The actions are expected to be implemented in 2006.

"Government authorities welcome FAO support. We need a neutral partner to help bridge differences of views between public actors and wine industry representatives. Some level of mistrust has prevented us to take effective collective action so far," declared Teimuraz Gegeshidze, Chairman of the Supervisory Board of SAMTREST, the Georgian wine agency under the authority of the Ministry of Agriculture.

In its cooperation programme with EBRD, the FAO Investment Centre acts as a facilitator of public-private dialogue to help foster investment in agriculture and agribusiness. FAO has been supporting the development of the Georgian wine sector since 2000 when, at the request of the Government, FAO provided assistance through its Technical Cooperation Programme in drafting Georgia's first law on vine and wine. EBRD is the largest single investor in this sector in transition countries. In Georgia, EBRD has already invested in prominent agribusinesses, from famous mineral water producers to successful winemakers.

The donor community is keen to support the wine industry, identified as a national priority and a source of much needed export earnings for Georgia. Active donors include Canada which supports the FAO/EBRD intervention and Germany (through GTZ). Other participants included representatives from the International Finance Corporation, USAID and the French Government. Activities undertaken by FAO/EBRD are expected to raise additional support from donors for the Georgian wine industry.

For more information see: www.eastagri.org/meetings/index.asp?id=19