Armenia’s grape output is projected rise by over 10 percent to at least 205,000 tons this year. Government officials have assured wine-growers that they will have no trouble selling their produce to over 40 wine and brandy distilleries operating in the country.
The latter bought an estimated two-thirds of the grapes grown last year. The global recession and its severe impact on Russia, the main market for Armenian alcoholic drinks, has called into question their ability to keep up the 2008 supply volumes. Brandy production in Armenia has fallen significantly percent this year.
Sarkisian discussed the unfolding grape purchases with top executives of liquor firms in the town of Armavir after visiting some of their production facilities located in the area south and west of Yerevan. Deputy Prime Minister Armen Gevorgian, Agriculture Minister Gerasim Alaverdian and the governors of three wine-growing provinces also took part in the meeting.
“All those producers who signed [supply] contracts with farmers must definitely honor their contractual obligations,” Sarkisian said in remarks made public by his press office. “True, this year’s harvest is slightly higher than last year’s and contracts were signed this spring and in previous years not with all wine-growers. But despite that, one has to find ways of buying up that portion of the harvest as well.”
According to Gevorgian, the Armenian government’s objective is to make sure that “not a single kilogram of grapes is left” unsold. “During the meeting, clear instructions were given to the effect that the entire grape harvest grown this year is stored,” Tert.am news service quoted him as telling journalists.
Armenia -- A grape storage facility in the Ararat Valley.
Sarkisian also stressed that the wine and brandy companies should not cut purchasing prices despite serious financial difficulties currently experienced by them. “I do realize that you are having problems with markets and transaction cash, but you should understand, for your part, the plight of the man who has spent a whole year growing grapes and now has trouble selling it,” he said.
The possibility of price cuts has already raised serious concerns among the mostly low-income farmers. More than a hundred of them demonstrated in another southern town, Artashat, on Tuesday to demand government intervention in the grape market. The protest was sparked by rumors that one of the liquor producer has slashed its prices by third. The company did not confirm the information.
The country’s single largest grape buyer, the French-owned Yerevan Brandy Company (YBC), has already announced that it will pay suppliers approximately 10 percent less than it did last year.