Crimea and Punishment

Ok, first things first. Crimea is legally part of Ukraine and Ukraine is not part of Russia. And, speaking as someone who has both just read Sebastian Haffner’s Defying Hitler, a brilliant, blood-chilling contemporary account of the apparently inexorable rise of the Nazis in the 1930s, and had a number of very worrying illiberal conversations with Russians today, I think we really do live in frightening times. 



Vladimir Putin (a popularly elected leader, one should remember, just as Adolf Hitler was a member of a democratically elected government) is a truly dangerous character, especially when confronted by a fast reducing asset in the shape of his oil reserves and – for the moment at least – potentially highly damaging sanctions. The general economic and civil rights appeal for Russia’s neighbours of leaning towards Europe rather than Moscow is convincingly described in this Forbes post by Vasil Jaiani.


But… as I discovered after talking to a fair few of them, there are plenty of Crimean winemakers who can see a lot of advantages to being part of Russia today rather than a European-focused Ukraine. 

Before waxing too lyrical about the prospects being part of the EU have to offer to producers in Eastern Europe, just look at the flood of premium Bulgarian, Hungarian and Romanian imports that have (not) made their way onto UK shelves for example. Conversely read this considered Academy of Wine Business report on Romania, a 2007 EU entrant, by Cheryl Nakata and Erin Antalis of the University of Illinois at Chicago. Membership of the EU has, the authors say, “provided funds for promoting Romanian wines abroad, and introduced regulations so more of the wines are safe to consume and exportable… and [ferreted out] questionable producers or practices”. But they also talk of the remaining “negative image” of Romanian wine in Western Europe, this country’s chief export market. They quote a producer saying “…Romania is selling, like I said, a bad image… We are in the bottom of the list, we are from the edge—we and Bulgaria”. For Nakata and Antalis, Romania’s wine industry needs to “Enter into export markets where [it] has a positive to neutral country image, and move away from countries where it has a country of origin liability, notably Western Europe”.

Most wine writers happily overlook the ‘bad image’ described by that producer. They fly into countries like Moldova, Georgia, Turkey, and Ukraine, accept some lavish hospitality, meet some charming producers and snap a few shots of the lovely landscape, taste a range of samples, say and write a few nice things, and move on, like movie critics heading off to the next screening. A week or two after their visit and the appearance of their words, the dust settles, much of it on stacks of unsold bottles. What few of the writers trouble their little heads over is the difficulties that the producers in these places have in finding consumers outside their own markets (and often even there) who are actually going to buy their bottles and pay their bills. (Just think of all the thousands of words that were devoted to Turkey’s wines a few years ago – and their relatively rare appearances on the international shelves today.)

So, whatever your feelings about the politics of the Russia/Ukraine situation (and I’ve laid mine out above), maybe you should try wearing the shoes of a winemaker in Crimea. The mood of the producers I met at a tasting in Abrau Durso in Anapa, Russia this weekend was very similar to the one Andrew Jefford described in his March 2014 Decanter piece after his visit to the region.

Despite the quality of many of its wines, Ukraine has actually been a very difficult place to produce and sell wine economically. One major reason for this is the requirement to pay an annual €50,000 for a wholesale licence. Another is the lack of readiness of Ukrainians (unlike Russians) to pay premium prices. Add to these, the survival of a cumbersome state-owned sector and high levels of bureaucracy and corruption and it is not hard to see why Russian-speaking Crimean winemakers might see some appeal in being part of what was already their biggest export market. 


The dice have already been further loaded by the promise of substantial investment into the industry from Russia. Roughly half of Crimean wineries are probably already owned by Russians and both that country’s wine producers’ association and government have now declared an ambition to move towards 80% self-sufficiency in wine production. 
Ironically this keenness to welcome Crimea (and possibly other Ukrainian vineyards) into a greater Russian industry is not entirely welcome in Russia itself. At Grand Vostock, a good French-Russian joint venture started in 2003, director Elena Denisova openly questioned why the adopted children (the Crimean winemakers) would be getting better treatment than longer-established producers in undeniably Russian regions like Krasnodar. Ms Denisova also raised the question of how much ‘Ukranian’ wine is actually produced from grapes grown elsewhere (an interesting subject to raise in Russia which has its own traditions of this kind).

And then there are Russia’s other neighbours, some of which currently rely on Russia for their sales. Georgia, while selling more bottles to Russia than ever since the reopening by Putin of the market to their wines, is sensibly making efforts to build other export markets (efforts with which – to declare an interest, I am beginning to help). But there is no denying the challenge this represents. Georgia’s task, however, looks positively tiny when compared to Moldova’s. This ancient wine region has great winemaking potential but today it’s impoverished and struggling. Like Georgia, it has lived through a boycott of its wines and knows that if Vlad the Imposer gets out of bed on the wrong side, that door could slam closed again. 

As Jaiani says in his Forbes piece, it may well be preferable in many ways for Moldova to achieve its aim of becoming part of Europe, but I’ll bet that there are a few winemakers in that country who might well be looking at the short term prospects enjoyed by their Crimean neighbours with at least a note of envy.


4 comments

  1. Anonymous · ·

    Robert, I do agree with many things you speak about here, but there are few things I would like to add to it.
    Happy Crimean winemakers were very cheerful at the beginning, but by now some of them have lost their optimism. Yes, there is a very expensive license for wine wholesale in Ukraine, but there is an alternative in Russia, which is not much better. Each bottle that is produced and sold should have an identity number, to apply which you need to get costly equipment and to hire at least one person who will do the paperwork, plus to that you need a license for production and a license for the sales of the wine produced. I know that for this year the producers in Crimea were granted permission to work without this equipment and licenses, but some of them have already experienced bureaucratic problems trying to sell their wines. Believe me, bureaucracy in Russia is even worth then in Ukraine…
    Crimea used to be a part of Russia and the majority of the people leaving there just loves it to be a part of Russia once again. I have never supported the annexation, but let's leave politics aside. Most of the people in Crimea think they will benefit of what has happened. In the short term they will, certainly. The pensions have already become higher now, BUT look what all that has done to Russian economy! Euro used to be 38 Rubles and now it's 52! Most of the people I know in Moscow have cut their budget for wine with 50%. They are not buying less expensive wine, they are buying less wine. So it will not help cheap wine producers, because real wine lovers wouldn't switch to the not-so-good-wines. They are drinking less of what they think is good quality wine.
    This is to say that I very much doubt the possibility of a positive turnout from the grand expectations of Crimean wine producers about becoming “Russian”. They will soon face the consequences and I doubt they'll enjoy them as they think they would… Can’t tell you how much do I want to be mistaken!
    Ekaterina Zakharova

  2. Thank you very much for your long, considered comment. And, even as an outsider armed with much less than hOlding the necessary information, I agree with all of it. I think that what is happening in Russia and Ukraine today is very dangerous. And yes you ate right about the existence of a Russian licence system that's similar to the one in Ukraine.

    Russia and Ukraine both have their own collections of unlicensed “garagiste” producers. I doubt the Crimeans will necessarily fare better within the Russian system.

    All I was trying to do was attract some attention to a situation that I'm sure noone understands.

  3. Anonymous · ·

    During the last 4 years I have been quite often in Moscow, and in 2001 I have been in Novosibirsk. In Ukraine I have been only once. Can't say I know much about Ukraine, but much more about Russia.
    Bureaucracy is a nightmare and corruption in business and state authorities is SOP.
    Putin continued to act just like his Stalinist forefathers did, and like Jelzin did in Moldava/Transnistria.
    Not that politicians of Moldova are much better or less corrupt than Ukrainians or Russians, but due to the fact that they are close to Romania, and have access to the Danube river as a means of transport, there is at least a chance for Moldavian wines in the EU. For Crimean wines the prospects have been worse from the very beginning.
    For those who are able to read German:
    http://vinositas.com/moldawiens-goldener-schatz/

  4. Thank you for that comment. Your point about the Danube is well made.

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