Guilty without ... wine

IPN analysis: The embargo imposed by Russia on the Moldovan wine most seriously affected Gagauzia – the autonomous region of Moldova – which is the most loyal to the Russian Federation. What is the current situation in the winemaking sector of the region and how do the region’s authorities see their future relations with Russia?

They found themselves among theirs

Russia announced a new embargo on the imports of Moldovan wine though its chief state sanitary doctor Gennady Onishchenko. The formal reason for such a measure is the detection in the Moldovan wine of the so-called dibutilftalat and of other unknown chemical substances with difficult names that disappeared from the public discussions practically immediately. Almost everyone in Chisinau believes that Moscow punishes us for out intentions to sign the Association Agreement with the EU. At the same time, the particularities of this situation resides in the fact that the drastic sanctions of Russia hit the hardest the winemakers of Gagauzia, whose population and authorities not only have a skeptical attitude towards Moldova’s European vector, but also have special sympathies for Russia. If considering the fact that many wine factories in Gagauzia were built with Russian investments, it means that Russia hits its own interests.

It is a matter of survival

Unlike in 2006, when Russia imposed the first embargo, the Moldovan politicians and representatives of civil society reacted calmly to this extreme action of the Kremlin. The statements of the authorities contain offense, confusion and condemnation. But nobody even mentioned the already historical threat of pouring the wine that will not be bought by Russia into the Nistru River.

The danger that the wine will not be sold is now indeed no so great. In 2006 Moldova’s wine exports to Russia represented about 85% of the total wine exports, but now this figure stands at about 1/3 of the total volume. The data of Gagauzia reveal a different situation.

By tradition, Moldova’s south deals with winemaking, which is the basic sector of the economy there. The Gagauz autonomous unit, which consists of 26 settlements, has 13 wine factories. The wine represents about 60% of the industrial production in Gagauzia. This is the highest figure on Moldova’s territory. Thousands of people work in this field – from farmers, who grow grapes, to workers and managers of wine factories.

After the crisis of 2006, many Gagauz winemakers took steps to find new export markets. However, Russia continues to account for a considerable part of the exports. According to the data for the first half of this year, this figure was about 45% (372.6 million lei). That’s why the new embargo is for the local wine producers a matter of survival.

Winemakers from all over Gagauzia, unite!

The executive committee of Gagauzia considers the fact that the conclusions about the Moldovan wine were drawn based on the analysis of only several consignments, without naming the factories that made the wine, is very strange. According to Vitalie Chiurcciu, head of Gagauzia’s General Division of Economic Development and Foreign Economic Relations, after 2006 many of the producers drew conclusions and diversified the export markets and started to show a much more serious attitude towards the quality of products.

In an interview for IPN, Chiurcciu set out four directions that, according to him, can contribute to overcoming the conflicts that arouse. “First of all, we must continue looking for new markets. Secondly, we can recycle the wine to make cognac. Thirdly, we can make juice concentrates from grapes and sell them on the markets of the Near East. This also refers to jams and other types of similar products. This is an alternative to making wine,” said the Gagauz official.

Speaking about the prospects of cognac production, the head of the Economic Development Division said the first steps in this direction were already taken by the company “Invinprom”, which is based in Chirsova, Comrat. In the near future, the company will start making cognac. In two years, it will also make brandy. The profitability of making maturated cognacs can be compared with the petroleum business.

Another step that can help overcome the crisis is the joining of the Gagauz winemakers under a common brand, considers Chiurcciu. Such an idea was formulated by members of the Gagauz administration when paying a visit to Tatarstan and when studying the work of the large local holdings specialized in alcohol making. After the first Russian embargo, the authorities of the Gagauz region tried to initiate the creation of the Association of Winemakers of Gagauzia and then to register the brand “Wines of Gagauzia”. The association was to include a common quality verification lab accredited in the EU and Russia. Such a system of work would have enabled to increase the transparency in activity and to minimize the non-economic factors in the commercial relations. But, euphemistically speaking, such a prospect didn’t enchant much the Gagauz producers. Now, after September 10, 2013, the authorities of the autonomous unit intend to return to this issue and hope that the wine businesses will show interest.

In knockout

According to the region’s administration, the embargo on wine imports is only a small aspect of the future relations with Russia. The Governor of Gagauzia Mihail Formuzal, in an interview for IPN, described the actions of Rospotrebnadzor-ului as minor stings that will be followed by other signals from Moscow. According to him, a number of local carriers transporting workers to Russia complained to him that the Russian customs authorities put the stamp ‘deported’ in the passports of their compatriots. “This shows that the Russian political elite decided to stop cooperating with Moldova. All those who speak about ‘Moscow’s hand’ are not right. Russia is not interested in Moldova. Russia is interested in Transnistria,” stated Formuzal.

The Gagauz leader noted that the image of Moldova as a country with wine traditions is seriously affected. “In 2006 our winemaking sector was in knockdown, but after the recent embargo we are in knockout. Nothing remained from our image. There is no use trying to restore something. We must design new brands and implement new technology. Russia, for its part, does not lose anything. It will buy wines of a better quality from Chile or Argentine at more reasonable prices,” said Formuzal.

Why Transnistria is allowed, while Gagauzia is not?

Several days after the official announcement of the embargo, Russia’s chief sanitary doctor specified that the embargo does not apply to Transnistria. He said that no consignment of wine or cognac from Transnistria has been sold to Russia this year. “Thus, their image before us is positive,” stated Onishchenko.

Understanding Russia’s special interest in Transnistria, in Gagauzia they cannot understand why Moscow ignores the same close relations with the Gagauz people. “We have had a common history for over two centuries and have the same faith. The Gagauz people consider Russian as their second language. What should we do with out relations? Russia does not act correctly when it hits everyone without discernment by the adopted decision. Indeed, in Moldova there are 7% of Romanian nationalists. Why should the other 93% of Moldovans, Gagauz people, Bulgarians and even Russians, who have friendly feelings towards Russia, suffer because of them?” asked Mihail Formuzal.

The Gagauz winemakers cannot probably count on the support of the Moldovan Government in the given situation. Considerable areas have been planted with vine in Gagauzia over the last few years, but the state budget does not include money for subsidizing their development. Thus, it seems that the Gagauz people will have to solve all the problems themselves.

Though the powers of Gagauzia to take steps at the level of foreign policy and foreign economic relations are substantially limited, the region’s authorities do not lose hope that a solution will be found at the local level. Mihail Formuzal said, among others, that he intends to pay a working visit to Moscow, where he will try to make use of his relations in the State Duma and the Government of Russia. Besides, there will be animated the autonomous unit’s relations with the regions of Russia.

This way or another, the administration of Gagauzia does not give up and says that life goes on after the embargo. “Though the political administration of Moldova orients itself to the West, a less pragmatic administration can come tomorrow, which would pursue a policy in the interests of the own state, building good relations with the neighbors and maintaining neutrality. They will have to change their attitude then,” said the Governor.

Veaceslav Craciun, IPN