By Emil Danielyan
The French-owned Yerevan Brandy Company (YBC), Armenia’s largest spirits distillery, announced Thursday that it has nearly met its 2003 target for wholesale grape purchases, despite a record-low harvest that hit hard the country’s wine-growers. In a statement, the company said it had to expand the geography of its traditional suppliers and almost double the purchasing price to stockpile some 13,500 metric tons of grapes, keeping it on track to further boost sales of its main product, Armenian cognac. YBC planned to buy 15,000 tons of grapes before the last, unusually cold winter wreaked havoc on the southern Ararat Valley where most of Armenia’s vineyards are located.
At least half of them were damaged or destroyed altogether in a matter of days last December as air temperatures tumbled to sub-zero levels not seen there in several decades. The cold snap not only stripped local farmers of a large part of their modest income, but also led to a shortage of grapes used by the country’s growing wine industry.
The Armenian Agriculture Ministry estimates that the aggregate grape output will shrink by half to 50,000 tons this year. The YBC management, however, has come up with a much lower figure: 26,000 tons. The company, which is owned by the French group Pernod Ricard, one of the world’s top alcohol producers, said it was forced to start buying grapes from the northeastern Tavush province and Nagorno-Karabakh for 145 drams ($0.25) per kilogram. It paid farmers only 80 drams last year.
The wine-growers, most of them low-income villagers, have long complained that the price set by YBC and other distilleries is too low and barely allows them to make their ends meet. Some of them told RFE/RL last spring that they will cut down their vines and grow vegetables or wheat in their place.
It only took a severe natural calamity to raise the grape prices to a level more acceptable for them. YBC, apparently fearing that they will not fall back dramatically, is calling for an expansion of Armenian vineyards. Its statement said the Pernod Ricard subsidiary will seek to attract local and foreign investors for achieving that.
Still, the poor harvest does not seem to have had a serious impact on YBC. The company said earlier that its overall brandy sales will exceed the 2003 target of 3.65 million liters. They were up 24 percent in the first nine months of the year compared with the same period in 2002.
YBC sold 3.49 million liters of Armenian cognac last year, or twice as much as in 2000. Over 90 percent of the liquor, still very popular in the former Soviet Union, is exported abroad, mainly to Russia. Another big ex-Soviet republic, Ukraine, has replaced Armenia as YBC’s second most important market this year.
The French-owned company’s Armenian competitors, notably the Great Valley group, have also reported rising sales in recent years.