Grape Shortage Pushes Armenia Cognac Exports Down 10% In 2006

GRAPE SHORTAGE PUSHES ARMENIA COGNAC EXPORTS DOWN 10% IN 2006

Interfax News Agency
Russia & CIS Business and Financial Newswire
February 19, 2007 Monday 7:07 PM MSK

Armenia reduced cognac exports 10% to 8.173 million liters in 2006,
Avag Arutyunian, chairman of the Armenian Winemakers Union, told
Interfax.

Armenian cognac is mainly exported to Russia, he said. The Russian
market was virtually closed for Armenian alcohol producers in March-
September 2006 due to the replacement of Russian excise labels,
however this was not the main reason for the reduction in exports,
he said. The main reason was a shortage of grapes, he said.

"Today, we are exporting as much as we can since we don’t have the
required amount of grapes to increase cognac production," he said.

Armenia produced 9.06 million liters of cognac in 2006, or about the
same as in 2005, he said. Cognac production in Armenia began falling
steadily in 1990 and yearly growth was only seen in 1999, although
growth rates tapered off last year, he said.

Cognac imports to Armenia have been increasing at very slight rates,
he said. Armenia imported 9,000 liters of cognac in 2006 compared to
6,000 liters in 2005. Mainly French cognac is delivered to Armenia.

New cognac producers appeared in Armenia in 2006 and they were more
active than the previous ones, Arutyunian said. As a result, the
share of the Yerevan Cognac Distillery in total production in the
country fell to 30% from 40%-50% in 2006. Nineteen distilleries are
currently producing cognac in Armenia, he said.

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