“Viticulturists Demand Grape Purchase Money. Grape Store Companies and State Response”
“There are around 89 wine and brandy companies engaged in the production, only 9 of them store grapes but all of them are producing brandy. It is not clear from what they produce the brandy if grape is the only raw material and they do not store,” Artak Sargsyan, President of the Union of Armenian Viticulturists, said this during the discussion on “Viticulturists Demand Grape Purchase Money. Grape Store Companies and State Response” at Media Center and emphasized there is need for control in the field.

According to his data, producing enterprises currently owe around 2.5 billion AMD to farmers. And this is when the agricultural season is already underway and farmers simply do not have working capital to conduct current agricultural activities and for effective cultivation of crop. “Up to now about 10 enterprises have not paid the money of grapes harvested in 2015, others have made partial payments. The viticulturists are in a very difficult financial situation. Many people have credit commitments, which are unable to perform; some are already in the courts and Compulsory Enforcement Service of Judicial Acts. Everything is paralyzed in these farmers' families, and they should do their best to pay their money as soon as possible. You know that they assured for numerous times by media that they will pay up to April 1, then until May 1, but now we are on the threshold of June 1 and that money has not been paid,” the speaker said.  

Robert Makaryan, RA Deputy Agriculture Minister, first clarified that producing enterprises currently owe 1.8 billion, not 2.5 billion AMD to farmers and presented the reasons why the debts were accumulated. “The main factors were the decline of the Russian ruble and the large volume of the crop. The task was that grape was fully supplied. At that time, it was clear that we could face such problems. In any case, last year was force majeure and there have been no such problems before,” Deputy Minister said. Media Center remarked that such problems, however, were also in previous years. He clarified that he meant primarily the general image. 

Talking about the debt not paid to the inhabitants of Kaghtsrashen Community of Ararat Region for already 8 months, the speaker said. “There was no supply of grapes in Kaghtsrashen as there was no demand. The Prime Minister urged "Vinar" company Kaghtsrashen to carry out supply and the processing company has financial problems today. I also spoke to the representatives of the bank, today they will conduct the notarial transaction, and they will receive their money at the latest on Wednesday.” 

Hayk Mirzoyan, Director of Export Development Fund of Armenia, referring to the difficult situation in the Russian market last year, noted that this year there is a positive trend in the first quarter there is 85 percent increase in exports. Mr. Mirzoyan could not present digital data about the percentage of the exports of wine and brandy in the markets of Russia and EEC member countries. However, he stressed that the main market is Russian. “In order to diversify the markets, our producers are encouraged to participate in various exhibitions in Germany and Poland. Soon, there will be exhibitions in Germany; we plan to participate in the exhibitions in China. Last year the export to other markets increased by 40 percent,” the speaker said and noted that the producers are used to the Russian market and they have difficulties in adapting the changes and the rules of other markets.

Samvel Shahnazaryan, General Director of “Shahnazaryan Wine Brandy House” Company, they paid 300 million AMD the day before, on May 26. “Now there is still a debt in the amount of 270 million and hope that we will pay the rest with the government's support in the coming one and a half months," he said and added that despite the figures, the growth of exports has recovered by 85%, the income of  exporters declined by half. “This is a terrible thing. I now expect income from 2.5 million bottles as much as from 800 thousand bottles before. Compared with last year, the income has decreased by 50% this year. We have obligations towards banks and farmers. The situation is complicated, and we should not blame anyone specific. Each one, businessman and farmer, should make precise calculations and know what to do," he said.  

Artak Sargsyan raised another important issue. “Three months has remained for the new supply season but now we are unable to offer to conclude contracts with processing and manufacturing enterprises. At this moment, contract is signed only with the Yerevan Brandy Company with the required amount. And if this continues in this way, we will once again face the same problem” the speaker said.  

In response, Deputy Minister of Agriculture said that there is still enough time to solve these problems.

Arevik Sahakyan, Program coordinator at “Media Center”

To contact the author please send an email to [email protected]

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