Armenia’s wine and brandy companies will likely increase grape purchases from local farmers by 28 percent this year after posting sharp production gains in the last 18 months, Agriculture Minister Ignati Arakelian said on Friday.
Arakelian spoke at a meeting with senior executives of those companies held by Prime Minister Karen Karapetian. It focused on government support for a major sector of the Armenian economy providing income to tens of thousands of grape farmers.
According to Agriculture Ministry projections cited by Arakelian, the country’s 2017 grape harvest is on track to shrink by 10 percent due to an unusually cold winter that severely damaged many vineyards. Nevertheless, the ministry expects wholesale grape purchases by Armenian distilleries to rise to 141,000 metric tons from 110,000 tons in 2016.
Arakelian implicitly attributed that to a nearly 30 percent rise in exports of Armenian brandy which he said was registered so far this year. Russia is the main export market for the alcoholic beverage.
According to the National Statistical Service (NSS), brandy and wine production in Armenia soared, in physical terms, by 61 percent and 30 percent respectively in the first half of 2017. The NSS reported less drastic but still double-digit production increases in 2016.
Output in the sector contracted in 2015 primarily because of a sharp depreciation of the Russian ruble. Many local firms struggled to pay grape farmers as a result. Some small manufactures also delayed payments for grapes purchased from mostly subsistence farmers last fall. Hundreds of such villagers staged angry protests this winter and spring.
Arakelian, who managed Armenia’s largest brandy producer until being named agriculture minister last October, was reported to urge all liquor firms to sign contracts with their grape suppliers “in order to avoid problems.”
Karapetian, for his part, promised continued government support for the winemaking industry. He said his government is already subsidizing loans extended to brandy and wine companies for grape purchases. It also engineered late last year a significant cut in the price of natural gas used by them, the premier said.
“I don’t know of many other governments that provide so much financial and other assistance to the agriculture sector,” Karapetian added, according to the government statement.
The statement said the industry executives presented their “problems, proposals and observations” during the meeting.