Against the backdrop of the pandemic, the situation in the wine sector “is not simple but it is not catastrophic either”. The absolute majority of wine production (85%) is aimed for exports, and during June there has already been a slight increase in bottled wine exports (especially to Romania, where they have gained a firm position on the market). The situation is somewhat worse with regard to bulk wines, which account for 70% of exports and which are down compared to the previous year. In particular, exports to Belarus and Georgia (Abkhazia) suffered.

At the same time, the pandemic reviled a systemic problem related to the export of bulk wines. Selling those on the EU and CIS markets erodes the image of Moldovan wines which are trying to position themselves as high quality wines. At the same time, in the Republic of Moldova there is a constant surplus of grape production, and low-quality bulk wines are the only option available to grape producers who want to market their production. Even so, wine stocks in a volume of about 24 million decalitres are putting pressure on the market and distort prices. Such a volume represents the equivalent of two years of harvest compared to an acceptable level of one year of harvest. Respectively, these excessive stocks threaten the harvest of 2020.

The medium-term solution is to create capacity for wine distillation and processing waste resulting from wine production. A public-private partnership based on industrial platforms could stimulate investment in this area. Distilling low-quality wine is a sustainable alternative for grape producers, who could market their product at prices of around 30 euro cents per liter of wine, thus helping to eliminate stocks and lessen pressure on the emerging sector of wine for export. At the same time, the distillation of wines and the processing of waste products resulting from wine production will allow the development of local production of medicinal alcohol, grape seed oil, natural dyes, fertilizers for farmers. All of these, are currently imported.

The level of indebtedness of the sector is quite high – the volume of attracted loans accounts for about 65% of assets, which limits the sector’s ability to make additional investments. Instead of attracting credits, the sector would like to benefit from additional shares issuance, the positive experience of Purcari winery is considered a success story. At the same time, export guarantees from the Guarantee Fund managed by ODIMM are required for the active promotion of production on new markets.

* This information is collected during the discussions conducted by the experts who elaborate the Impact Study of the COVID-19 pandemic on the sectors of the economy. The data can be taken from the website www.consecon.gov.md only with the obligatory mention of the source “Economic Council under the Prime Minister of the Republic of Moldova” and the specification that “The impact study of the COVID-19 pandemic on the economic sectors is carried out by The Economic Council jointly with the Ministry of Economy and Infrastructure, with the support of the European Bank for Reconstruction and Development and the United Kingdom Government Fund for Good Governance. ”

The Secretariat of the Economic Council to the Prime Minister is supported by the European Bank for Reconstruction and Development, funded by the UK Government’s Good Governance Fund, and the International Finance Corporation’s Investment Climate Reform Project funded by the Government of Sweden’s International Development Agency.

The Secretariat of the Economic Council to the Prime Minister is supported by the European Bank for Reconstruction and Development, funded by the UK Government’s Good Governance Fund.