Armenia’s largest brandy company said on Tuesday that it will cut back on purchases of grapes from thousands of local farmers by about 10 percent this fall despite its rallying sales in and outside the country.
The French-owned Yerevan Brandy Company (YBC) said it will buy 29,000 metric tons of grapes from some 5,000 farmers mostly concentrated in the wine-growing Ararat Valley.
“The price will be kept at 130 drams ($36 U.S. cents) per kilogram in the Ararat Valley and 120 drams in [the northern province of] Tavush,” its chief executive, Ara Grigorian, told journalists.
The purchase level announced by the company is equivalent to roughly 15 percent of Armenia’s grape output anticipated by the Ministry of Agriculture this year. It is down from 32,000 tons reported by it last year.
The YBC slightly boosted grape purchases last fall despite a global recession which hit hard Armenia’s export-oriented wine-making industry. Armenian brandy sales, the bulk of them carried out in Russia, have steadily risen this year after a sharp fall registered in 2009.
Grigorian said his company has stockpiled large amounts of alcohol in recent years and would need only 6,000 tons of fresh grapes this year to keep up its current production levels. He claimed that it will buy much more than that for mainly socioeconomic reasons.
YBC suppliers will hardly be convinced by this explanation. “I have grown 10 tons of grapes but they want to buy only 2.8 tons from me,” complained one grape farmer in Jrashen village. “What am I going to do with the rest?”
“Their grape output keeps growing every year, while our buying capacity is not unlimited,” countered Grigorian. “We can’t buy up all of the country’s grapes. We can’t produce 20 percent of Armenian cognac and buy 100 percent of grapes.”
The YBC’s purchasing price is another source of controversy. Many local winegrowers believe that it is set too low, even though the Armenian subsidiary of the French group Pernod Ricard pays them more than other local brandy producers. “They should have at least paid 180-200 drams,” one Jrashen farmer told RFE/RL’s Armenian service.
“The purchasing price is not good but have to accept it,” said another “I have no choice.”