FT.com / By industry / Consumer industries - Georgians reap grapes of Russian wrathSkip to main content, accesskey 's' Homepage, accesskey '1' Wednesday Apr 26 2006 . All times are London time. Roger Bove Edit Profile Take a Tour Log out By industry / Consumer industriesPrint article | Email article Main page content: Georgians reap grapes of Russian wrath By Arkady Ostrovsky in Tbilisi Published: April 26 2006 03:00 | Last updated: April 26 2006 03:00 Merab Piranishvili, a weather-beaten farmer who grows black Saperavi grapes in the wine-making region of Kakhetia in east Georgia, speaks almost no Russian. But he is quick off the mark with one word when asked about the reasons for a three-week-old Russian ban on Georgian wine: politika. ADVERTISEMENT It's a word that has been heard a lot in Georgia's wine cellars and government offices since Russian authorities claimed they found dangerous pesticides in some samples of wine from both Georgia and Moldova, another former Soviet Republic. Instead of banning particular producers, however, Russia banned all wine imports from both countries. On Friday, Russian officials were even moving towards banning Borjomi and Nabeglavi - the best-known Georgian brands of mineral water - before announcing this week they would wait to see whether seized consignments were genuine Borjomi. Georgian wine producers are the first to admit that fakes are their biggest headache as they try to revitalise the country's ancient traditions of winemaking. But the dispute, which Georgians see as mainly political, offers a telling insight into relations between two countries that are effectively in a state of cold war. Georgia accuses Russia of doing everything it can to undermine the attempts of its reformist government to reintegrate two breakaway regions and revive its shattered economy. The ban by Russia, which accounts for 80 per cent of Georgian wine sales, has struck at one of the most sensitive areas of Georgia's economy. Kakhetia, the region where vines have been cultivated for thousands of years and where most of the population depends on the industry, has been one of the drivers of Georgia's recent growth. Kakha Bendukidze, the minister for structural reform, says the decision was purely political: "[From the Russian point of view] Georgia is guilty all around: it wants to join Nato, it does not want Russian military bases on its territory - so let's bar their wine exports." Gennady Onishchenko, the chief sanitary doctor of Russia, said recently: "We have only one, innocent, demand - that all supplied products should be of [high] quality. We will simply bar their exports until the time when we can work out what is going on." Trying to work out precisely that, Mikheil Svimonishvili, the youthful Georgian minister of agriculture, wrote letters and made telephone calls to his Russian counterparts asking for detailed information about the tests and their results. But his letters and calls went unanswered. "Every time I called Mr Onishchenko, his secretary would say that he is in a meeting or busy," he reports. Last week Mr Svimonishvili flew to Moscow where he spent two days hoping to see his Russian counterpart, to no avail. Sceptical Russian consumers have not taken Mr Onishchenko's warnings too seriously. Badri Japaridze, vice-president of Borjomi, says rumours of a possible a ban on mineral water have even prompted an increase in sales as Russians have stocked up on this popular fizzy and slightly salty water. But wine producers, including the most reputable ones, are already suffering from the ban. "It is a wrong thing to do. Falsification exists; it is a problem of the whole world. But you can't punish the whole country," says Kakha Zukakishvili, one of the co-owners of Telavi Wine Cellar, a premium wine producer in Georgia that has won several international awards, including in Russia. The company has recently invested $1.2m (€969,000, £673,000) to build an extension to a small factory with gleaming Italian equipment. If Russia does not lift its ban, the construction will have to be frozen. It has already laid off 45 workers as a result of this dispute. "It is a big blow for all of us," says Archil Gegenava, head of Teliani Valley, one of the fastest growing wine companies in Georgia. "We were counting on Russia sales and buying equipment, bottles, land. Now we are trying to cancel whatever contracts we can." Georgia exports 50m bottles of wine to Russia a year. But Georgian wine is so popular among Russians that many bottles of alcohol sold under Georgian labels are in fact made in Russia, in some cases a cocktail of pure spirit, dyes and sugar, says Mr Svimonishvili. As part of efforts to stamp out counterfeit wine, the government has in the past year closed down testing laboratories which were giving out fake certificates and has made several companies dump their wine. In the meantime, Georgian winemakers are keeping up their spirits. "In the longer term we may benefit from this crisis. The weaker companies and dishonest producers will disappear. We will emerge stronger, although of course it is going to be a painful process," says Zurab Margvelashvili, director of Tbilvino, a leading winery. Mr Bendukidze says the wine ban will have a minimal impact on the economy but will give companies a strong impulse to diversify away from Russia. "It shows that Russia is not a reliable trading partner and we just have topretend that instead of Russia, there is an ice ocean behind the Caucasus mountains." 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