The quality standards set by Russia half a year ago created serious problems for Armenian producers, the head of the Armenian Association of Winemakers Avag Harutiunyan expressed concerns in an interview with Lragir.am. According to him, the Russian side has changed the rules without warning the Armenian side. As a result, some quantity of Armenian brandy is sent back to Armenia.
“And they placed us in a difficult situation. They introduced quality standards but we here cannot understand if the brandy we export matches the standards. [The batch] gets there, turns out not to match and is sent back,” he says.
According to international rules, if one country changes standards, it notifies partner countries. Avag Harutiunyan says they normally give a three-year notice to match the production to standards.
“They should have given us 2.5 years and they applied the decision the next day. Three days later we will have no problems, our producers are currently making changes but a lot of problems occur at this stage,” the expert says.
Avag Harutiunyan did not specify what quantity of Armenian brandy was sent back from Russia, he said it is a commercial secret. He only said that a few trucks came back in the past half a year. The problem is that the Armenian producers are terrified by these standards. The Russian side may say any time that a product does not meet standards. This is quality which is not measured in Armenia, and the Armenian businessmen are in uncertainty.
“The problem is with partnership, they should have notified and given us time. The reason for this policy is to oust non-Russian production from the Russian market and support their own production. This is clear to some extent but their methods are not understandable,” Harutiunyan said.
Note that the Russian press has informed that this year the Russian ministry of agriculture will propose the ministry of finance to raise the minimum retail prices of brandy in 2018. Currently the minimum retail price in Russia is 371 rubles for half a liter. The price may rise by 35%.
According to Avag Harutiunyan, the rise in the retail price of brandy will produce a positive effect on the Armenian brandy.
“Today the prices of brandy on the Russian market are very low, the Armenian brandy cannot compete with prices, and they have to reduce prices. If the prices rise, the wholesale prices of brandy will rise too, and it will be better for us. If the minimum level increases, the Armenian brandies return to the level of prices in 2008,” the expert said.
Since the crisis in 2008 the rate of the Russian ruble fell, and contracts were signed in rubles. “As a result, the prices of Armenian brandy fell by almost 100%. Now they are trying to return but it has come back by 20% only. We are still 80% below the prices. Now if the price rises 35%, it is a positive tendency for Armenia,” he said.