Armenia – The Cognac Republic


Feb. 27, 2005 12:42 PM (GMT +0300) Moscow


Little Armenia has a whole set of brands that have become symbols of the
country: brandy, Ararat, Radio Armenia, and finally Armenians themselves.
Ironically, cognac recently turned out to be brandy, Ararat is outside the
country, and so are most Armenians. And it turns out there never was a Radio

Three Great Nations


This cask is laid down in honor of Boris Yeltsin. He could ask to have it
sent to his home at any time, but it keeps better here
Here is a Radio Armenia joke: ” How many great nations are there in the
world?” Answer: “Just three-Russians, non-Russians, and Armenians.” It’s
true that Armenians never hesitate to talk about themselves in superlatives.
Residents of Yerevan invariably remind visitors to the capital that their
city is 300 years older than Rome. They also do not forget to mention that
Armenians became Christians before Byzantium; two years ago (2001), the
republic celebrated the 1700th anniversary of the adoption of Christianity
as the national religion. Armenia was not always so small either. Under
Tigran the Great, its possessions stretched from the Caspian Sea to the
Mediterranean Sea and the country was called Greater Armenia.

Then Armenia endured several difficult centuries and shrank dramatically in
size. Today, twin-peaked Ararat (Sis and Masis in Armenian), Armenia’s
national symbol, which literally hangs over Yerevan in clear weather, is
located in Turkish territory, just like Armenia’s ancient capital, Ani.

However, none of this affects Armenians’ national pride. They have recently
taken to calling their capital “little Paris”; and Armenians actually have
warm feelings toward France. This may be because they resemble the French in
their lively nature, but it is more likely because France is home to the
world’s second-largest Armenian community, which has given the world such
celebrities as Charles Aznavour and Cher.

The world’s largest Armenian community lives in California and is no less of
a market for Armenian goods than Russia. Armenians are weighed down by their
isolation from the rest of the world, which is the result of a closed border
with Azerbaijan, difficult relations with Turkey, and deteriorating
relations with Russia and Georgia. Armenians resent the inaccessibility of
the Russian market, especially since Armenia is Russia’s main partner in the
Transcaucasus: the country’s entire antiaircraft defense system, as well as
protection of the border with Turkey, the power industry, and many large
companies (in repayment of debts to Russia), have been turned over to

At the same time, the worldwide Armenian diaspora helps Armenia; for
example, billionaire Kirk Kirkorian has given $180 million for road
reconstruction. Yerevan is probably the only capital whose roads resemble
the aftermath of a bombardment: holes half a wheel diameter deep lie in wait
everywhere and there is no way around them. Yerevan residents compare
driving around the city to figure skating.

One of the worst road incidents is connected with a romantic story. One day,
they brought a female elephant to Vova, a male elephant living in the
Yerevan zoo. Vova was charmed by the lady, and when the time came to part,
he was deeply distressed. In his confusion, Vova broke out of the zoo,
overturned several trolleybuses, trampled a large number of cars, and headed
resolutely for the city center to let them have it. As he approached the
center, he got into a battle with a police detachment that tried
unsuccessfully to shoot him; he was finally killed by an armored troop
carrier. As experts in amorous affairs, Yerevanites still recall Vova’s
tragedy with sympathy.


The Dengi correspondents were lucky enough to be able to photograph the
president of Armenia while he was skiing at Tsakhadzor. Despite the dark
glasses, the president was easy to recognize by the size of his entourage
For Russians, Armenia remains a set of stereotypes. Two hundred years ago, a
great poet expressively described a scene thus: “The Armenian kissed the
young Greek woman.” However, the story ended badly. Later, Armenians, like
Georgians, were identified with market vendors, although it is not they –
Azerbaijanis who control Moscow’s markets.

Without a doubt, the most outstanding Armenian brand is cognac. The
appearance of a bottle of Ararat, Ani, Nairi, Akhtamar, or Vaspourakan on a
holiday table added prestige to the occasion. Doubts about the legitimacy of
the expression “Armenian cognac” have arisen only in the last ten years.
However, even after French owners arrived at the Yerevan Cognac Factory, its
products continued to be called cognac in Russia, and not brandy.

Another important brand is also called Ararat, but it is not cognac but
rather a football team that was champion of the USSR in 1973. It is no
longer a very important team; the Grand Tobacco Co. Ltd. Factory team has
become the leader of the Armenian football championship instead. There were
also Yerevan cigarettes with a black filter that were called Akhtamar, like
the cognac.

What else comes to mind? Tsakhadzor, a mountain resort and the USSR’s main
Olympic center, of course. Then there are mineral waters like Bjni, Jermuk,
and Arzni. And shoes. In the time of the famous “Soviet quality”, shoes made
by the Masis and Nairi factories in Yerevan were in great demand, although
these factories are no longer in operation. On the other hand, many small
companies in Armenia successfully make “real Italian-style” shoes and
Armenians take pride in their high quality.

Jewelry is another ancient Armenian specialty. Foreign sales of cut diamonds
that Armenia obtains through an agreement with Diamonds of Russia-Sakha
(ALROSA) are an important source of income. Specialists of the old Soviet
school remember the “mailboxes”, the local radioelectronics industry [called
“mailboxes” because the factories or offices were secret and were identified
only by a mailbox address] that labored hard and long for the good of the
Soviet defense industry and ordinary citizens.

There is also no forgetting YerAZ minibuses, Armenia’s answer to the Latvian
RAF model. Unlike RAF, the Yerevan Automobile Plant (YerAZ) is still in
operation. If this is still not enough, let’s return to the brand we started
with, Radio Armenia.

How Armenians Fired the Director of the CIA


Grand Tobacco has some unique equipment for testing cigarettes. This machine
lights up by itself and inhales
Radio Armenia was asked: “Why did they fire the director of the CIA.”
Answer: “Because he couldn’t give Kuzkin’s mother’s address or Radio
Armenia’s wavelength or figure out what the Voluntary Society for
Collaboration with the Army, Air Force, and Navy (DOSAAF) did.” On arriving
in Armenia, the Dengi correspondents conducted their own journalistic
investigation into Radio Armenia.

At first, it seemed fairly straightforward to locate a radio outlet where a
group of specially trained wits sat splitting their sides with their own
jokes and transmitting them around the world. However, in answer to our
questions about Radio Armenia, Armenians only shrugged their shoulders

After some in-depth intelligence work, we came up with several versions. The
first is obvious: “All our radio is Armenian.” In Armenia, as in Russia,
everyone listens to FM radio stations today; but there is no station called
Radio Armenia that is capable of broadcasting outside the republic. The
second version is that Radio Armenia is not located in Armenia at all, but
is an invention of Moscow wits. However, only one Moscow radio station in
the late 1980s ventured to call itself Radio Armenia and it did not last

The third version attributes the start of Radio Armenia to members of a
Joviality and Wit Club (KVN); but the Yerevan team called the New Armenians
clearly has nothing to do with it, because the name Radio Armenia was around
long before any of them were born.

In our search for the truth, we turned to the management of Armenian Public
Radio, who gave us a more conspiratorial version of the origin of Radio

Amasi Oganessian, deputy general director of Armenian Public Radio: This
invention has nothing to do with either Armenia or Russia. Radio Armenia
appeared in the 1960s during the Cold War as the creation of a special
section of the CIA. The jokes had a political nature, and their objectives
included anti-Soviet propaganda and undermining the political regime of the
USSR. The first collection of Radio Armenia jokes was published in West
Germany in 1980.

Incidentally, the version of the secret-service origin of Radio Armenia is
discussed on the Internet as well. In one of these forums, they talk about
the reasons why the special Armenian joke sections in Western secret service
agencies were eliminated. Once, at a congress of All-Union Broadcasting
workers the chairman announced, ” I now give the floor to the
representatives of Radio Armenia…”, and the whole room roared with laughter.
The spies realized that the weapon of special propaganda had turned into a
means of amusement for the whole country and turned the spies themselves
into clowns.

However, Radio Armenia itself gives a different reason on the Internet for
its closure: “It’s just that Jew who thought up all the jokes left for
Israel.” Today, Armenians listen with pleasure to Russian Radio, and not
Radio Armenia.

How Armenians Fought Against Aging in Iron


The management of the tobacco factory is trying to promote a healthy
lifestyle among its workers
Armenians were insulted when their cognac started being called brandy
following the example of the French. Anyone will tell you that “brandy is
made by another process, but we’ve always used the cognac process.” The
industrialist Nerses Tairiants brought the technology from France and
founded the Yerevan Cognac Factory in 1887. Twelve years later, his company
was bought by Nikolai Shustov’s trading house, purveyor to the court of His
Imperial Majesty. Shustov’s personal cask has been stored in the aging room
since 1902, and only three people have drunk from it: Marshal of the Soviet
Union Hovaness Bagramian, Boris Yeltsin, and President of Armenia Robert

Laying down personal casks has become a tradition at the factory. We saw
casks for Yeltsin, Ryzhkov, Putin, Kvasnevsky, and other well-known
politicians, each of whom (or their descendants) can send a courier for them
at any time. There is also a “peace cask”, which they promise to share when
there is peace between Armenia and Azerbaijan. Finally, there is a whole
lane of casks for Charles Aznavour, Armenia’s favorite Frenchman.

There is also another custom of weighing important guests on the factory
floor for the purpose of giving them a gift. The guest is seated on one pan
of the scale, while the other pan is piled with gift cases of cognac. They
say Boris Yeltsin weighed in at five cases. People at the factory have
noticed that Western guests usually immediately transfer the amount of the
gift to charitable funds, whereas guests from CIS countries instantly pack
the cases into their motorcades.

In June 1998, the factory passed to the hands of the French company Pernod
Ricard. According to Pierre Larretche, the factory’s president and general
director, Pernod Ricard wanted to strengthen its positions on CIS markets.
However, 1998 was the year of the Russian default and within a year, output
had decreased from 3.5 million bottles to 1 million. Production was restored
to previous volumes only last year. On the other hand, the French owners
took advantage of the time to redesign production processes and reorganize
the management structure and sales system. It is shameful to admit that the
cognac had formerly been aged in metal vessels with chips of oak bark thrown
in. Now the cognac is properly aged in natural oak casks. For this purpose,
the art of cooperage, lost in the 19th century, had to be revived in
Armenia. Under an agreement with the Armles company, Armles has committed to
planting two new Armenian oaks for every delivered tree.

Of course, the French are a long way from solving all local problems. For
example, up to 30% of the cognac on the Russian market (and even in Armenia)
is counterfeit. Russia accounts for 75% of the 93% of production going to
export, and another 10% goes to Ukraine and Belarus. There are plans to
increase exports by exporting to another 25 countries. However, expansion of
production is hampered by a shortage of grapes, because the vineyards cannot
satisfy market demand.

The Battle Against Smoking, Armenian Style


Producers of Bjni mineral water are getting ready to conquer the Russian
market once again
Here is a curious fact. Viticulture has started losing out to the rapidly
growing tobacco industry, all because a lot of people in Armenia smoke: more
than 50% of the population (the world norm is 40%). Grand Tobacco Co. Ltd.
Is the country’s largest taxpayer. The company has begun financing farmers
to grow tobacco, and today this occupation is five to six times more
profitable that any other agricultural sector. However, when peasants in the
Ararat Valley (which is where cognac grapes are grown) went so far as to
tear up their vineyards in order to expand the area under tobacco, the
tobacco company’s management took pity on cognac and stopped buying tobacco
from Ararat peasants.

Tobacco has been cultivated in Armenia since the 17th century, but cigarette
production began in 1938 when a fermentation plant and a workshop for
producing papirosy [Russian cigarettes with a cardboard mouthpiece] started
operating. In 1946, they were merged with the Armtabak company, which had
99% of the Armenian market and supplied cigarettes to the entire USSR.

After the collapse of the USSR, Armtabak completely lost its market and
imported cigarettes filled its place. At that time, Grant Vartanian, one of
Armtabak’s managers, emigrated to Canada. Then in 1997, he got in touch with
a former Armtabak colleague, Ruben Airapetian, and came to an agreement on
setting up a Canadian-Armenian tobacco company. The partners interested
farmers in growing tobacco, set up a fermentation plant, started marketing,
bought a unique laboratory, and within a short time managed to win back 75%
of the Armenian market. Today Grand Tobacco produces about 60 name brand
cigarettes with a volume of 4 billion cigarettes per year, some of which are
exported to the United States, Russia, and Arab countries. The factory’s
management is convinced that the quality of their cigarettes is as good as
that of international brands.

David Galumian, executive director of Grand Tobacco Co.: We used to produce
five or six name brands. Think of Kosmos and Salyut in soft packages without
cellophane or foil, Prima, Astra… But these cigarettes differed only in
their packages; the blends were all the same. Now about half of our
production consists of elite cigarettes made of fine tobacco that we buy

The factory still produces those very same Akhtamar cigarettes with the
black filter. The name comes from an Armenian legend poetically recreated by
the writer Hovhannes Toumanian: Once upon a time on an island there lived a
beautiful girl named Tamar, and every evening she would light a fire to
guide her lover who swam to her from the mainland. One day, some wicked
people put out the fire. The youth lost his way in the sea and began to cry
“Akhtamar! Akhtamar!” (Ah! Tamara, Tamara!). The young man drowned, but the
Akhtamar cigarette and cognac brands live on.

If You Like Bjni, You’ll Love Noi

Any Armenian will tell you that Armenia has the best-tasting water in the
world. The stony, treeless mountains of Armenia heated by the hot sun
provide ideal conditions for keeping water pure and fresh. “You always want
‘Evian’,” argued an acquaintance. “Fine, just so you don’t think I’m
boasting, even if our water is no better it’s no worse. But it’s really even

In the USSR, water from the Armenian Bjni, Jermuk, Dilijan, and Arzni
springs competed with Georgian Borjomi and Narzan from Kislovodsk. Today,
water production is only one-tenth of what it was in Soviet times and it
competes only with itself. About ten companies produce only Jermuk (the
leader in sales volumes) and their product varies in quality (products with
dark blue and black labels were recommended). Bjni is in second place in
sales volumes; it belongs to one of Armenia’s largest companies, the SIL
group owned by the Soukiassian family.

Khachatur Soukiassian, president of SIL group: When there are a lot of
producers of one brand, that’s bad. One starts to advertise Jermuk and the
others profit from its advertising without investing a single kopeck. And
vice versa, if one produces a poor-quality product the rest suffer.

Khachatur Soukiassian is a parliamentary deputy and one of the richest
people in Armenia. He founded his empire in 1989 with a car wash, a service
station, and a parts business. For a short time, he was an owner of the
Kotayk Brewery, one of the country’s largest. Today more than 25 companies
belong to the SIL group, including Armekonombank, Hotel SIL, the Pizza di
Roma fast food chain, a construction company, and eight factories producing
furniture, wood products, lemonade, corrugated packaging, etc. Soukiassian
bought the Charynsavan Bjni plant in 1997 with the right to lease the spring
for 25 years. Today the plant has 150 employees who produce more than 5
million bottles per year. America is the main export market, because they
began working with it earlier, but Russia will soon catch up in sales
volumes. In addition to Bjni, the factory has started producing a successful
new brand of noncarbonated drinking water called Noi (Noah; Armenians
believe that Noah was Armenian).

Khachatur Soukiassian: Along with water, we’ve started delivering juices to
Russia-mango, guava, rosehip-and even we’re surprised at how successful we
are. It’s too bad that deliveries to your country are complicated by
problems with transportation services and the rigid dictates of sales

Businessman and deputy Soukiassian sees some novel political approaches to
cooperation with Russia. “Imagine how easily Russia could solve its problems
with Georgia,” he says. “They show a meeting with Putin on TV, and on the
table you have Bjni instead of Borjomi! Then how Borjomi producers would
start cursing their president!”

by Vladimir Gendlin and Dmitry Lebedev (photos)