PRESS RELEASE
U.S. Senator Barbara Boxer
Washington D.C.
112 Hart Senate Office Building
Washington, D.C. 20510
(202) 224-3553
Sacramento
501 I Street, Suite 7-600
Sacramento, CA 95814
(916) 448-2787
(916) 448-2563 fax
SENATOR BOXER INTRODUCES ARMENIAN VICTIMS INSURANCE FAIRNESS ACT
Dear Friend:
Between 1915 and 1923, the Ottoman Empire conducted the first
Genocide of the 20th Century, killing an estimated 1.5 million
Armenians and displacing thousands more. The campaign was so
devastating that at the beginning of World War I, there were
2.1 million Armenians living in the Ottoman Empire; following
the Genocide, fewer than 100,000 Armenians remained.
Survivors and descendants of the Armenian Genocide–even after
all of these years–are still trying to recoup the benefits
owed to them from insurance policies that were issued prior to
the Genocide. Insurance policy documents held by the victims
were often destroyed during the Genocide, and death
certificates were not issued to those Armenians who lost their
lives. Therefore, survivors and descendants can only rely on
the documents held by insurance companies as proof that they
are owed benefits. Unfortunately, insurance companies have
offered little cooperation in disclosing the documents and
opening up their records. As a result, I recently introduced
S. 2344 which gives states the authority to require insurance
companies to disclose records of policies that were issued in
areas controlled by the Ottoman Empire between 1875 and 1923.
It is absolutely critical that survivors of the Armenian
Genocide, and their decedents, receive full disclosure of the
insurance records that demonstrate their rightful claim to
insurance policies obtained during this frightful period of
world history. The horror of this international tragedy
continues to resonate strongly in the hearts and minds of
Armenian-Americans, and it is the responsibility of the U.S.
government to step in where insurance companies have not to
bring some measure of peace and resolution to this aspect of
the suffering so cruelly imposed on an entire generation of
people.
If you have questions or concerns about this or any other
matter, I encourage you to contact me at
.
Sincerely,
Barbara Boxer
United States Senator

Los Angeles Daily News, CA
April 30 2004
Reopening of state trade office in Israel proposed
By Harrison Sheppard
Sacramento Bureau
As Gov. Arnold Schwarzenegger visits Israel this weekend, back on the
home front Assemblyman Keith Richman, R-Granada Hills, is pushing for
California to reopen its trade office in that country.
The office was closed, along with 10 in other countries, during last
year’s budget crunch. Richman argued the Israel office cost very
little compared with the trade it generated.
“The Israeli trade office has been in place for more than a decade
now and in fact it has provided a large amount of trade opportunities
for companies in the state of California and has generated a lot of
jobs,” said Richman.
Opened in 1993, the office cost about $64,000 a year to maintain on a
contract basis with a private firm and also got involved with trade
to other Middle Eastern countries. The state closed its foreign trade
offices last fall in six Asian countries, Mexico, Europe and South
Africa.
California imported more than $1.1 billion of goods from Israel last
year and exported $320 million in goods, with the bulk of that trade
coming through the Los Angeles area, according to the Los Angeles
Economic Development Corp.
Still, that is a relatively small amount compared with the trade
California did with the larger Asian nations, noted LAEDC economist
Jack Kyser.
“It sounds good to open the office in Israel, but if you’re going to
start opening the offices, wouldn’t you want to go to countries where
we have bigger potential?” Kyser asked. “You’d have to say, OK, the
largest source of exports out of the L.A. district is Japan. No. 2 is
China. No. 3 is South Korea. (Israel) is quite a ways down.”
Schwarzenegger is visiting Israel this weekend to attend the
groundbreaking for a new Simon Wiesenthal Center museum — a
commitment he made long before he ran for governor — and to look for
new business opportunities for California companies. He is expected
to meet with leaders in the Israeli government, including Prime
Minister Ariel Sharon.
On his way back, he will also stop at the Ramstein Air Base, a U.S.
military facility in Germany, to visit California troops.
A Schwarzenegger spokesman said the governor has not taken a position
on Richman’s bill but will be looking to expand trade opportunities
for California while he is in Israel.
The administration is also working on a separate bill, SB1665 by Sen.
Dennis Hollingsworth, R-Temecula, that would encourage the
establishment of trade and investment offices in other countries. The
bill does not name the countries, other than Armenia.
A spokesman for the Israeli government welcomed the effort to bolster
ties between Israel and California.
“If we put our two heads together, I think we can achieve great
things, and this is a step in that direction,” spokesman Daniel
Seaman said, adding that it could “benefit both the people of the
state of California and the people of the state of Israel.” Daily
News correspondent Erik N. Nelson in Tel Aviv contributed to this
report.

Baku Today, Azerbaijan
April 30 2004
Former FA Aide Warns Not To Recognize Turkish Cypriots
Baku Today 30/04/2004 12:38
Azerbaijan’s recognition of Turkish Republic of North Cyprus (TRNC)
would lead to its losing Nagorno-Karabakh, a former presidential aide
on foreign affairs, told the Baku Today on Thursday.
Vafa Guluzade, who now heads Caspian Political Researches Center,
said the statement President Ilham Aliyev made while in Turkey on
April 15 was an `emotional’ one.
President Aliyev promised that his country would recognize the
Turkish Cypriot side if the latter approves and Greeks reject UN
Secretary General Kofi Annan’s reunification plan. Aliyev said if the
latter happens, a new situation would emerge over the Cyprus problem.
But Guluzade believes that in no way should Azerbaijan go for
recognition of TRNC under the current circumstances.
Guluzade pointed out that although Armenia is occupying
Nagorno-Karabakh for more than past ten years, even Yerevan has not
recognized the self-proclaimed republic of Karabakh. He believes that
if Baku were to recognize TRNC now, Armenia would immediately
recognize Karabakh. Greece, Russia and even some countries that are
under Moscow’s influence would also follow.
`Azerbaijan’s recognition of Turkish Cypriots would mean that the
country itself signs down to give up Nagorno-Karabakh,’ Guluzade
stressed.
Final results of the referendum that was held on both sides of the
divided Mediterranean island said 76 percent of Greek Cypriots said
`no’ and 24 percent `yes’ to Annan’s plan. The Turkish Cypriot vote
was 65 percent `yes’ and 35 percent `no.’
The plan stipulated that should both sides failed to agree to
reunification, only Greek Cypriots would join the European Union on
May 1. All EU laws and benefits now will apply only to the Greek side
of the island.
The Greeks’ `no’ vote caused wide international criticism.
The UN Security Council expressed disappointment on Thursday that
Cypriots missed “an extraordinary and historic opportunity” to
reunify their divided island and reiterated its strong support for a
political settlement.
Council members said they respected the outcome of Saturday’s
referendums, which saw Turkish Cypriots approving a UN reunification
and Greek Cypriots
rejecting it.
U.S. State Department spokesman Richard Boucher `blasted’ Greek
Cypriot leaders while praising the Turkish Cypriots, according to the
Associated Press.
Cyprus has been divided since 1974 when Turkish troops invaded the
island in the wake of an abortive coup by supporters of union with
Greece.

Press-Enterprise, CA
April 30 2004
Inland Armenian services scheduled
By BETTYE WELLS MILLER / The Press-Enterprise
Armenian Apostolic Church
What: Church service
When: 3 p.m. Sunday
Where: All Saints Episcopal Church, 3847 Terracina Drive, Riverside

It’s been 60 years since Norma Cosby worshipped in an Armenian
Apostolic Church, a lifetime since she heard the language of her
grandparents.
Now the 67-year-old Catholic is eager to attend an Armenian service
Sunday in Riverside, the first of what Inland Armenians intend to
become monthly events in a parish created in February.
“I’m a practicing Catholic, but this is a culturally intimate thing
with the Armenian church. Your culture is a part of your religion,”
the San Bernardino resident said in a telephone interview.
Inland Armenians who want to attend services of the Eastern Orthodox
Church must drive to Los Angeles or Orange counties, or the Coachella
Valley, said Betty Kalpakian Bown of Riverside. An Armenian
congregation in Palm Desert is completing a building this year.
Services there have been held monthly. Riverside services were held
once each in 1998, 2000 and 2002.
“If we want to go to church, we drive,” Bown said by phone. “We don’t
go every Sunday. It’s too far. This has been my dream from the
beginning.”
As a mission parish of the Western Diocese of the Armenian Church of
North America, there will be monthly services in May and June, and
again in the fall, said the Rev. Stepanos Dingilian, who will conduct
the Divine Liturgy, or Badarak, as it is known in Armenian.
“The service we have goes back 1,700 years,” Dingilian said in a
phone interview. The hymns and much of the service will be in
Armenian, with English translations, the priest said.
Cosby said Armenian services are long, ornate, and full of ritual and
symbolism.
“It’s going to bring back a lot of nice memories of going with my
grandparents,” said Cosby, who is president of the Inland Empire
Armenian Club. The club has more than 60 families on its mailing
list, with members from Banning, Beaumont, Blythe, Corona, Hemet,
Loma Linda, Redlands, Riverside, Temecula and Yucaipa. There are
about 4,150 people of Armenian ancestry living in the Inland area,
according to the 2000 census.
More than 90 percent of the approximately 10 million Armenians
worldwide belong to the Armenian Apostolic Church, Dingilian said.
There are about 1.4 million Armenians in the United States, most of
them residing in Southern California.
With Sunday’s service coming a week before Mother’s Day, the priest
said his sermon will emphasize the importance of womanhood. In June,
when many students graduate from high school and college, the service
will focus on education, a central element of the Armenian church.
“The church itself embodies respecting the value of the individual
person, and the importance of the family and the community,” he said.
Dingilian said that as visiting priest he will conduct seminars and
discussions regularly. He already has met with Armenian students at
UC Riverside.
In 301, Armenia became the first nation to declare Christianity the
state religion.
The head of the church, the Catholicos of All Armenians, lives in
Etchmiadzin, Armenia, and is elected by the National Ecclesiastical
Assembly, composed of lay leaders and clergy around the world.
The other three members of the church hierarchy are: the Armenian
Church Catholicos of Cilicia, in Antelias, Lebanon; the Patriarch of
Jerusalem, and the Patriarch of Constantinople, in Istanbul, Turkey.
The Council of Bishops is the highest religious authority in the
church. Some priests are celibate, and some are married.
The Armenian Church of America was created in 1898. The Western
Diocese, which includes California, Washington, Arizona and Nevada,
was established in 1928.
The church is central to the lives of many Armenians in a way that
differs from many denominations, Dingilian said.
“It brings all of the edification of the Bible, the meaning of
Armenian civilization and history,” he said. “They find a sense of
empowerment, fulfillment and growth.”
From: Emil Lazarian | Ararat NewsPress

Zaman, Turkey
April 30 2004
Chirac Supports Turkey’s E.U. Membership in the ‘Long Run’
French President, Jacques Chirac, said Thursday that Turkey was not
ready for full membership in the European Union (EU) under the
present circumstances, but said that he thinks positively about
Ankara’s membership in the long run.
The French leader said that the membership of Turkey, which he
defined as a ‘secular, strong and democratic country’, would be for
the good of the E.U. He stressed that this would end the clash of
civilizations theory, which pits the West against Islamic
civilization. Chirac noted that the Turkish government has passed
reform laws and said the E.U. would care about the implementation as
well as the reforms.
In a press conference held at the Elysee Palace to announce his
opinions on E.U.’s enlargement, Chirac noted that although talks with
Ankara start next year, the process could take a long time and said,
“talks will last for 10 years or more.”
Using England as an example, Chirac acknowledged that during the
membership period, the European public’s attitude towards Turkey
could change as well.
The French leader said if Turkey’s efforts to join the Union are
ignored for religious or ethnic reasons, then Ankara would be alone
and this would cause the feared clash of civilizations to occur. The
President stated that Turkey’s membership was not an issue of debate.
The E.U. state and government presidents accepted its candidacy at
the Helsinki Summit held in 1999.
When asked whether the recognition of the alleged Armenian genocide
would be taken as a precondition for Turkey’s E.U. membership, Chirac
said this was an issue between Turkey and Armenia and it would not be
a condition for E.U. membership.
Support for Enlargement
Chirac stressed May 1, 2004 is an important date in E.U. history and
said enlargement was a chance for both France and Europe. Noting the
significance of enlargement in providing democracy and stability to
Europe, Chirac acknowledged that the E.U. with its 450-million
population would emerge as the world’s most important economic power.
Chirac argued that the European Constitution, which will be taken up
at the European Council to be held in Brussels in June, was an
assertive and faithful text and said that for the E.U. to advance
effectively, a compromise should be reached on the Constitution.
04.30.2004
Ali Ihsan Aydin
Paris

ITAR-TASS, Russia
April 30 2004
Armenian villager contracts anthrax

YEREVAN, April 30 (Itar-Tass) – A case of anthrax has been
registered in Armenia, the republic’s chief state sanitary doctor
Vladimir Davidyants said.
Arutyun Khachatrian, 41, contracted the skin variant of the disease
while butchering a dead cow in the village of Aigabats, Shirak
region.
Doctors in the hospital in the regional administrative centre of
Gyumry, former Leninakan, where the patient is undergoing a course of
treatment see his condition as satisfactory.
Anthrax killed nearly 40 heads of cattle in the village of Aigabats
in the middle of April. According to preliminary data, the animals
had contracted the diseases as a result of injection of non-standard
vaccine made in Armenia.
The hotbed of disease has been localized, said an official at the
Chief veterinary inspectorate of Armenia.

Baku Sun, Azerbaijan
April 30 2004
Aliyev meets Kocharian
by Vanessa Gera

Photo: Presidents Robert Kocharian of
Armenia, left, Mikhail Saakashvili
of Georgia, center, and Ilham
Aliyev of Azerbaijan, during
the first day of the European
Economic Forum im Warsaw,
Poland, Wednesday. (AP)
WARSAW, Poland – Hundreds of business and political leaders opened a
summit amid heavy security in the Polish capital Wednesday to explore
the challenges facing the European Union after eight former Soviet
bloc countries join this week.
The European Economic Summit brings together dignitaries from across
the continent, including 20 presidents and prime ministers and
representatives from leading corporations.
The 650 participants will `scope out what the major challenges and
opportunities’ of EU enlargement are by focusing on Europe’s economic
competitiveness as well as social and environmental issues, said
World Economic Forum head Jose Maria Figueres.
`All of those are vital components of a better – of a more
sophisticated – Europe as we move forward with enlargement,’ Figueres
said.
Anti-globalization groups have mobilized against the meeting, viewing
the forum funded by many leading corporations as an exclusive club
for the rich. About 5,000 protesters are expected to march Thursday,
organizers say.
The three-day summit – organized by Figueres’ Geneva-based
organization, which is best known for its annual summit in Davos,
Switzerland – concludes Friday only hours before midnight
celebrations in Warsaw and other cities usher in the historic May 1
expansion to take in eight former communist and two other nations.
As a precaution for handling protests, police were visibly out in
force – a kind of presence they have generally avoided since the fall
of communism 15 years ago.
Downtown Warsaw shops – from elegant boutiques to fast-food chains –
boarded up their windows with slabs of wood, corrugated tin and
cardboard and police in riot gear guarded a barricaded perimeter of
several blocks around a hotel hosting the conference.
Government leaders also can expect criticism from other quarters.
Daniel Gros, director of the Center for European Policy Studies in
Brussels, said economic dialogue in Europe has been reduced to `a
charade’ as countries pay lip service to limiting their budget
deficits and economic reform, but then do little to measure up.
`In economic terms they don’t have to talk to each other a lot – they
just have to go home and do their homework,’ said Gros, who will also
be participating.
Alongside workshops on the benefits of adopting the euro currency and
the competitiveness of the EU countries, one-on-one talks between
political leaders also feature at the forum.
These include a planned meeting of the presidents of Azerbaijan and
Armenia, which have been locked in a dispute over Nagorno-Karabakh,
an ethnic Armenian enclave within Azerbaijan.
Ethnic Armenian forces drove out Azerbaijan’s army from the region in
the 1990s and ethnic Azeris fled. Though a cease-fire was established
in 1994, the two sides periodically exchange fire.
President Johannes Rau of Germany, President Ion Iliescu of Romania
and President Mikhail Saakashvili of Georgia also were expected to
address the meeting.
The 10 states joining the EU are Poland, Hungary, Czech Republic,
Slovakia, Slovenia, Estonia, Lithuania, Latvia, Malta and Cyprus.

Scotland on Sunday, UK
April 30 2004
Eu’s Outsiders Look in with Envy and Bitterness
“PA”
While new EU members celebrated, their left-out neighbours stood
outside the rope and watched the party today, wondering when – or if
– they will join Europe’s exclusive club of the stable and
prosperous.
An entire swathe of countries, from Belarus and Russia in the north
to Albania in southern Europe, are seeing their relative poverty and
outsider status reinforced with the eastward push of the union’s
borders at the stroke of midnight.
Some, like Croatia and Romania, have a chance to get in the next
several years. Others, burdened by shrivelled economies and
international concern about human rights, can only dream of meeting
the tough requirements for economic reform and democracy.
Ukraine’s president Leonid Kuchma, leader of one of the biggest
outsider nations, testily accused the EU of erecting a new wall to
replace the ones torn down at the end of the Cold War in the late
1980s and early 1990s.
`We regard it as historically unjust that we are outside this
system,’ he told a Warsaw conference this week. `We are not asking
for charity, we are simply announcing to Europe that there is such a
country as Ukraine.’
Kuchma’s emotional reproach was greeted with a bland thank-you from
EU enlargement commissioner Guenter Verheugen, sitting on stage a few
feet away at the European Economic Summit.
He left no doubt where Kuchma stands, however.
`For the time being, accession of the Eastern European countries –
Russia, Belarus, Moldova, Ukraine – is not on our agenda,’ Verheugen
said. `It makes no sense to make promises which are not realistic.’
The newcomers are Poland, Hungary, the Czech Republic Latvia,
Lithuania, Estonia, Slovakia, Slovenia, Malta, and Cyprus. And
there’s a clear pecking order for outsiders.
The former Yugoslav republics of Croatia and Macedonia and former
Soviet satellites Romania and Bulgaria have applied for EU membership
and could start getting in as early as 2007. Turkey is awaiting a
decision on whether it will be able to start negotiations with the
EU.
In the Balkans, Serbia and Montenegro – even impoverished Albania –
have a theoretical chance to get in years down the road.
Others have no real chance for now. Russia has dismissed the prospect
of getting in, and its view of Caucasus nations such as Georgia and
Armenia as belonging in its sphere of influence may place a long-term
lid on any faint hopes there.
Then there’s isolated, authoritarian Belarus, which refused
permission for an EU enlargement ceremony in the capital Minsk and
cancelled a visit to the Warsaw economic summit by Prime Minister
Sergei Sidorsky.
Ukraine, meanwhile, has struggled economically since becoming
independent with the break-up of the Soviet Union in 1991. European
officials have expressed concern about the pace of democratic
progress, most recently criticising local elections won by a
pro-presidential party this month amid accusations of widespread vote
fraud.
However, Ukraine and Belarus may be able to get more aid and sympathy
at the urging of Poland, which shares a border with both.

Interfax
April 30 2004
COGNAC AND WINEMAKING IN ARMENIA
Armenia is one of the oldest winemaking regions, but it is better
known for its cognac, which it began producing in the late 19th
century. Today cognac is a symbol of Armenia and an important export
product.
Armenian cognac has always been in high demand in Russia but it is
now becoming popular on new markets and is sold in 25 countries.
Armenian wine is not as popular. After the crisis in the industry
that followed the collapse of the Soviet Union Armenian producers
lost their key market – Russia, but in the wine later began appearing
on the Russian and international markets.
Armenia has 24 winemaking and cognac enterprises.
VINEYARDS SHRANK THREE TIMES IN 10 YEARS
Winemaking began in Armenia more than 3,000 years ago. The country is
located in the southern Caucasus in a subtropical region. Armenia’s
climate is defined by its mountains. Summers are hot and dry in the
valleys surrounded by mountains and winters are harsh with little
snow. Although Armenia is one of the few winemaking regions where
vines must be protected in the winter, its advantages are that the
air is dry and it has a large number of sunny days during the year
(300 on average). This lends special qualities to Armenian varietals.
The Armenian varietals have a high sugar content and thus high
alcohol, which facilitates the production of fortified wines and
cognac.
Armenia grows more than 200 kinds of grapes, most of them native to
the region. There are about 30 that are the most popular, including
Mskhali, Garan, Dmak, Voskeat, Muscat, Areni, Kahet, Rkatsiteli,
Adisi, Azateni, Anait, Karmrayut, Nerkeni, Tokun, and Megrabuir.
Armenia has six wine regions: Ararat Marz, Armavir, Tavush,
Aragotsoton, Syunik, and Vaiondzor.
The Ararat Valley is the main winegrowing region where up to 60% of
the country’s grapes are grown. The region is divided into the Ararat
and Armavir districts. Six varietals are grown here – five Armenian
grapes (Mskhali, Garan, Dmak, Voskeat, Kangun) and one Georgian grape
(Rkatsiteli) are grown here and are used to produce cognac and
dessert wines.
Tavush and Aragotsoton regions, where 25% of the vineyards are found,
produce wine materials for cognac production and for light table
wines and sparkling wines. Syunik region on the border with Iran also
produces these wines. Vaiots Dzor produces the traditional Areni
wines.
Armenia’s vineyards were largest in the mid-1980s when they covered
36,500 hectares, but this dropped to 22,000 hectares following the
collapse of the Soviet Union. Growers were forced to cut down the
vineyards to grow vegetables, since local wine and cognac makers
bought little raw material up until 1998 and vegetables brought high
profits.
As of the end of October 2003, vineyards covered 12,000 hectares.
Most are very old and in need of renewal. But this is a costly
process. It costs up to $2,000 a year to cultivate one hectare of
vineyards, and the new vines will produce a harvest only in the
fourth year.
Heavy freezes damaged 50% of Armenia’s grapes in the winter of 2002 –
2003 and as much as 70% in Ararat and Armavir regions. The
Agriculture Ministry and wineries were forced to pay higher prices
for grapes to prevent growers from cutting down the damaged vines.
Analysts said only about 10% of the damaged vines died and the rest
will produce a harvest again this year.
Deep freezes resulted in a smaller harvest of 75,180 tonnes of grapes
last year, compared with 103,000 tonnes in 2002. Producers were
forced to buy elsewhere. Winemakers bought grapes from Nagorny
Karabakh, whose grapes had never been used to produce cognac. Some
producers planned to buy from Azerbaijan, but many were opposed. They
said using imported grapes to produce Armenian cognac would go
against national standards and result in a lower quality product.
According to national standards, Armenian cognac (technically brandy)
must be produced from Armenian grapes using the prescribed method and
bottled exclusively in Armenia. But due to last year’s small harvest,
the list of grapes allowed for use in cognac was expanded to include
grapes grown in Nagorny Karabakh. Armenian cognac is normally
produced from indigenous white grapes, mostly Mskhali, Garan Dmak,
and Voskeat.
HISTORY OF COGNAC PRODUCTION
Armenia began producing cognac in 1887. Neress Tairian, a Yerevan
merchant, founded Armenia’s first winemaking enterprise in 1877 and
10 years later the plant began producing cognac. It initially
produced about 1,200 buckets (one bucket equals 12 liters) a year.
Russian industrialist Nikolai Shustov acquired the enterprise in 1898
and after reconstructing and expanding it, increased cognac
production.
Three more cognac plants were built in Yerevan in 1893 – 1894, and by
1914 there were 15 cognac plants. The Shustov plant was the largest,
however. Yerevan region produced 181,000 buckets of cognac in 1913,
including 81,500 at the Shustov plant. The Shustov cognac was sold in
Moscow, Odessa, Warsaw, Smolensk, and Nizhny Novgorod.
Armenia’s wineries and cognac plants were nationalized in 1920 and
the Ararat cognac plant was formed at the Shustov plant in 1922. When
the Yerevan winery was reorganized in 1948 the cognac and cognac
alcohol plants were merged to become an independent plant. A new
building was opened in 1954 and the Yerevan Cognac Plant was formed
within the Ararat trust.
Cognac production grew the fastest in Armenia during the Soviet
regime. Cognac production soared by 17 times from 1940 – 1985.
Armenia had 42 producers by the end of the 1980s with affiliates in
Moscow, Saratov, and Leningrad that produced a quarter of the cognac
consumed in the Soviet Union.
Tight restrictions on the production of Armenian cognac resulted in
numerous conflicts with Ararat plants in Moscow, Saratov, and St
Petersburg. The plant in Saratov was switched to joint production of
cognac drinks, the St Petersburg plant was sold for $300,000 on
condition it no longer produce cognac, and the Moscow plant was
transferred in trust to creditors, which it owed $1.3 million as of
the start of 2002.
The winemaking industry fell into decline after the collapse of the
Soviet Union. The grape harvest dropped from 270,000 tonnes to
105,000 tonnes and many wine and cognac plants stood idle.
The industry began to revive in 1998 when France’s Pernod Ricard
purchased the Yerevan Cognac Plant and formed the Great Valley joint
venture. These two enterprises are currently the biggest producers of
cognac in Armenia. The country has seven or eight cognac producers,
which in addition to the two mentioned are the Ararat Cognac Plant,
Proschian Cognac Plant, Avshar Winery, Aregak, and the Yegvard Winery
and Cognac Plant.
Armenian cognac has become popular in many countries and is exported
to 25 countries, but Russia remains its main market, accounting for
80% – 85% of sales. Analysts expect demand for the cognac in Russia
to continue growing.
Yerevan Cognac Plant and Great Valley are the biggest suppliers of
Armenian cognac, but other Armenian producers are also beginning to
sell in Russia.
Naturally, there are imitations in Russia and Armenia, but most
producers try to protect their product by using special bottles and
markings.
YEREVAN COGNAC PLANT
The Yerevan Cognac Plant is one of the biggest enterprises in the
food industry and a leading producer of Armenian cognac with the
exclusive right to use the Ararat name.
Pernod Ricard invested in the plant in 1998. The company paid $30
million for the plant, along with the Armavir and Aigevan plants.
This was the biggest privatization deal in Armenia and triggered
numerous disputes. Some parliamentarians argued the deal should be
contested because the plant was sold too cheap.
In addition to paying $30 million, Pernod Ricard agreed to invest 30
million francs over five years to develop the business.
The company accepted all of the conditions set by Armenia. It agreed
to maintain production at 425,000 decaliters a year and bottle only
in Armenia. The cognac must be produced from local grapes and Pernod
Ricard promised to maintain cognac alcohol reserves of at least 1.660
million decaliters.
In the five years since purchasing the plant Pernod Ricard has
invested about $50 million in the plant and will invest another $10
million this year. The money was used to buy new equipment, improve
technology, repair production facilities, train personnel, expand
product range, grow grapes, and for marketing.
The Yerevan Cognac Plant conducted the Legend of Ararat advertising
campaign in the CIS from September 1999 – 2003 to promote the cognac.
The company spent $2 million a year on the ad campaign.
It spent 44% of this in Russia, 13% in Ukraine, 16% in Armenia, and
11% in Belarus. About 45% was spent on advertising in the press, 20%
on working with consumers in stores, bars, and through distributors,
and 35% on exhibits and production of related products.
The aggressive ad campaign resulted in increased sales. The company
sold 1 million liters of cognac in 1999, 1.7 million in 2000, 3.085
million liters in 2001, 3.486 million liters in 2002, and 4.22
million liters in 2003. It expects a 5% sales increase this year.
Turnover last year totaled $31.4 million, up 17.16% from 2002.
The Yerevan Cognac Plant exports 91% of its product. It sells to 25
countries, with the CIS accounting for 97% of sales and Russian being
the biggest market. The company shipped 2.997 million liters of
cognac to Russia last year, up 10.26% from 2002. Ukraine was the
second biggest consumer at 490,000 liters, up 78.23% from 2002.
The plant sold 360,000 liters in Armenia last year, up 52.68% from
2002.
Yerevan Cognac Plant also wells to Belarus, Kazakhstan, Kyrgyzstan,
Germany, China, the United States, and other countries.
The company is working to strengthen its position on existing
markets. Further expansion is limited by production capacity, which
depends on the harvest.
Yerevan Cognac Plant does not have its own vineyards but works with
more than 5,000 growers in four regions – Ararat, Aragotsoton,
Armavir, and Tavush. The growers have 2,100 hectares of vineyards and
can produce 20,000 – 22,000 tonnes of grapes a year. The plant has
been buying $3 million – $4 million worth of grapes a year since
1998. It bought 18,768 tonnes at 146 drams per tonne last year.
Yerevan Cognac Plant offers free advice to farmers and helps them buy
pesticides and get loans from the ACBA bank. It also works with
growers on a long-term basis. The company signs five-year contracts
with growers and will sign contracts for 10 years with growers that
are planting new vineyards. The company said its purchase prices and
long-term contracts motivate growers to expand.
Yerevan Cognac Plant produces 19 exclusive brands and offers five
kinds of regular cognac (aged three to five years), three kinds of
Ararat (three, four, and five stars), Ani, and Aik, 14 fine cognacs –
a seven-year cognac, 10-year (Armenia, Akhtamar, Dvin, Yerevan, and
Yubileiny), a 15-year cognac (Prazdnichny, Urartu), and 18-year
(Vaspurakan), a 20-year cognac (Nairi), a 25-year cognac (Erebuni), a
30-year (Kilikiya), a 40-year cognac (Sparanet), and a 70-year cognac
(Noah’s Ark).
Sales of fine cognacs grew nearly 24% last year. The plant plans to
expand sales of fine cognac this year while maintaining sales of
lower-end products.
GREAT VALLEY
Great Valley, an Armenian-Cyprus joint venture, is the main
competitor for Yerevan Cognac Plant. The company was formed in 1998
by local businessman Tigran Arzakantsian and Cyprus-based Domeravo
Trading.
Competition for the market escalated into a serious conflict in 2000.
After signing a deal with major Russian distributor Rusimport, Great
Valley began working on the Russian market. Great Ararat was its main
product on the Russian market and during its first year the joint
venture captured 3.5% of the Russian cognac market.
But Yerevan Cognac Plant in August 2000 accused Great Valley of
illegally using the Great Ararat brand and said when the deal for the
Yerevan plant was signed, it included its trademarks, one of which is
Ararat. Yerevan Cognac Plant filed a complaint with the Armenian
patent bureau Armpatent in September 2000, and the Great Ararat brand
was cancelled. The decision to give Yerevan Cognac Plant the
exclusive right to the Ararat name cost Great Valley $1 million.
Great Valley is one of the biggest producers of wine products in
Armenia and has six enterprises, including the Yerevan winery Ararat,
the Artashat Wine and Cognac Plant, the Ashtarak Winery, and a winery
in Karmir Shuka (Nagorny Karabakh). It formed the Great Artsakh
subsidiary in Stepanakert in 2000. Great Valley has several growing
centers, one of which is in southern Nagorny Karabakh.
Great Valley exports all of its product, selling mostly to Russia and
the CIS, which accounts for 80% of sales. The company is the second
biggest seller of Armenian cognac in Russia and has a 3.4% market
share there (Yerevan Cognac Plant has 11.4%).
Beverages & Trading, owned by Bacardi-Martini Group, became the
exclusive importer and distributor for Great Valley in Russia in
September 2003.
Great Valley produces three-five year cognac (Armenian three, four
and five star), Great Valley (six years), Kars (seven years), Gavar
(eight years), Sevan (10 years), Akhtanak (12 years), Yerevan (15
years), Collectors (18 years), Arin Verd (25 years), and premium
cognac Tsar Tigran (12 – 30 years or more).
Like the Yerevan Cognac Plant, Great Valley buys grapes from growers.
It bought 5,272 tonnes of grapes last year, but plans to grow its own
as well. Chairman of the Board Tigran Arzakatsian said a group of
private investors representing the Armenian community in France
bought 24% of the company last year. The company will use the
proceeds to plant 2,000 hectares of vineyards.
WINEMAKING
Winemaking dates back further in Armenia than cognac production, but
Armenian wines are far less popular than its cognac. Georgia and
Moldova were the biggest wine producing regions in the Soviet Union,
but Armenian wineries were at their peak under the Soviet Union. Wine
production soared by nine times in 1940 – 1985 and champagne
production grew 10 times in 1960 – 1986. The wine business generated
about 37.4% of earnings in the food industry in the 1980s. about 3%
of the wine produced in the Soviet Union came from Armenia during
this time and three quarters of Armenia’s wine was exported to
Russia.
The crisis that followed the collapse of the Soviet Union took with
it large vineyards and winemaking traditions. Wineries stood idle and
gradually deteriorated and the loss of the Russian market was also a
problem.
But winemaking has begun to pick up again in recent years. Foreign
and local investors have committed large sums to the industry. Small
producers have been formed, mostly in Yekhegnadzor region where the
Areni grape is grown.
Armenian wines are gradually returning to Russia, but faced with
competition from the more popular French, Georgian, and Moldovan
wines, and wines from Argentina and Chile, they are having a hard
time finding a niche on the Russian market. The USDA marketing
assistance program (MAP) has helped promote Armenian wines and gave
five producers the opportunity to conduct an aggressive marketing
campaign on the Russian and foreign markets.
Armenia’s climate enables it to produce a full range of wines, but
the country has long been known for its fortified and dessert wines
similar to Heres, Madeira or port. Armenian wineries expanded their
product range to accommodate the consumer preference for dry or
semi-dry wines and offer a large assortment of table and fine wines.
Areni, the exclusive distributor in Russia for Armenia’s Areni,
Ginetas, Kimle, Maran, Van-777, and Idzhevan wineries, offers more
than 25 Armenian wines, including the dry reds Gandzak, Vaiots Dzor,
and Areni Marani.
Other producers include Vedi-Alko, Yegvard Wine and Cognac Plant,
Aigezard Wine and Cognac Plant, Avshar Winery, Ararat Winery, and
other companies.
Vedi-Alko is one of the biggest producers of wine and vodka in
Armenia. Annual sales total 4 million – 5 million liters of vodka and
about 1 million liters of wine. The company includes the Getap and
Vedi wineries and Vedi Company. Vedi Alko produces 70 products, 30 –
35 different wines, vodka, and champagne. It exports to Russia, the
United States, the Baltic countries, Belarus, and Europe.
The Idzhevan Winery was founded in 1976 and produces nine wines and
one sparkling wine. It has its own vineyards.
Van-777 was formed in 1996 with the support of the USDA MAP program.
It produces five different wines – sweet, Muscat, semi-dry,
semi-sweet, and dry and sells domestically and in Russia and Belarus.
Ginetas was formed in 1998 also with the support of the USDA marking
program. It produces the Gandzak dry red wine and has its own
vineyards. The plant has facilities to process 20 tonnes of grapes
per hour and produces 60,000 – 80,000 bottles of wine a year that it
ages in oak barrels for one to three years.
Areni Winery specializes in the production of premium dry red Vaiots
Dzor wines from the Areni grape. It produces 80,000 – 100,000 bottles
of wine a year and also ages its wines in oak barrels for one to
three years.
This article was written by the Interfax Center for Economic
Analysis.

Pan Armenian Network, Armenia
April 30 2004
ILHAM ALIYEV ASSURES ARMENIAN MILITARY OFFICERS WILL ARRIVE IN BAKU
President of Azerbaijan secures the participation of Armenian
soldiers in NATO trainings.
The Deputy Commander of the European Commandership of the U.S. armed
forces Charles Wold, while in Yerevan said on April 26 that nothing
will impede the Armenian military officers to participate in the
”Cooperative Best Effort 2004” trainings to be held in autumn 2004
in Azerbaijan within the frames of the ”Partnership for Peace” NATO
Program.
/PanARMENIAN.Net/ The General said this was guaranteed by President
Aliyev personally. In Baku, however, the ”Organization of Karabakh
liberation” radical group declared it would not allow the Armenian
officers to enter the territory of Azerbaijan. The guarantees of
Ilham Aliyev became the result of the attempts of the U.S. Ambassador
to Baku Rino Harnish and Permanent representative of the Washington
administration in NATO Nikolas Berns. In Baku they understood that
Brussels might change the place of the upcoming trainings. Recent
statements of the head of the Defense Ministry’s press service Ramiz
Melikov prove it: ”If Armenians want they can participate in the
maneuvers,” the Azeri colonel said.
However, there is another viewpoint in the military circles of
Azerbaijan. Military expert, Colonel Uzeir Jafarov said that the
Azerbaijani government does not have to promise anything to anybody.
”It has to be taken into account that we are in a situation of war
with Armenia,” Jafarov says. But the harshest statements belong to
Akif Nagi, leader of the radical group ”Organization of Karabakh
Liberation”. He hints that he will organize terrorist acts in the
airport if the Armenians arrive in Baku.
No doubts that Nagi’s behavior is approved by the authorities.
According to the available information, Aliyev has agreed with
participation of Armenians only in case if Yerevan sends one or two
officers. So, it is evident that the Azerbaijani authorities want to
deprive Armenians of the real possibilities of cooperation with the
NATO partners. In this situation, participation of Armenia in a farce
to be used by the Azeris for propaganda goals seems extremely
doubtful.
29.04.2004, “PanARMENIAN Network” analytical department