Crimea's Wine Industry Renaissance

Crimea's Wine Industry Renaissance

Photo: http://sudakskiy-dvorik.ru

The Crimean winemaking industry is now rather heterogeneous. There are large wine producers, well-known and famous enterprises such as Massandra, Inkerman, Novy Svet, Zolotaya Balka and Koktebel...

...and small private wineries such as Alma Valley located near the villages of Vilino and Peschanoye, Uppa Winery in the Rodnoe village, Dom Zakharynykh near Bakhchisaray, etc.

How Wine Production is Regulated

Russian wine production is regulated by the Law on Wine Trade, which came into force on 26 June 2020. This law introduces the concepts of wine, fortified wine, sparkling wine, drink made from grape, vine plantation and vineyard.

This clarification is significant. Wine shop shelves will no longer be loaded with cheap fortified wines made from low-quality imported wine stock. From now on, producers will be obliged to specify on labels that it is a “wine drink” but they are no longer allowed to call it “Russian wine.” This means that a certain percentage of Crimean wine will be relabeled to “wine drink.”

The law also regulates two other important concepts for Russian wine, namely protected geographical indication (PGI) and protected appellation of origin (PAO).

It is assumed that a PGI wine is a drink made from the grapes of the region where the wine is produced. PAO wine is more 'local', produced from the grapes of a particular small area. There are 15 PGIs and 23 PAOs in Russia. Crimean wines are included in the Crimean PGI.

Most importantly, the law clearly states that “Russian wine” must be 100% produced from grapes grown in the Russian Federation.

“The adopted law is rather harsh,” said Valeriy Zakharyin, a Crimean winemaker and owner of the Dom Zakharyin winery, “but it has stimulated the planting of grapes, even though the cost of wine material and grapes has increased. That is why everyone is now focused on planting grapes and developing domestic winemaking, even despite the controversial points of this law. The key change for the Crimea was that the Russian market is simply three times larger, and it is the market that dictates the rules of development of this industry.”

Grape Price is Skyrocketing

Predictably, the ban on the use of imported wine stock for making Russian wine caused a sharp increase in grape prices. In August this year, the wholesale prices for wine producers in Crimea went up from 60 rubles ($0.83) to 150 rubles ($2.07), and from 60-70 rubles to 100 rubles ($1.38) per 1 kg in the Krasnodar territory. Market players believe that the prices of raw materials might continue to rise due to a poor harvest while experts warn that the retail chain might stop offering discounts on Russian wine.

Aleksandr Stavtsev, head of the WineRetail information center, says that prices depend a lot on the variety and volume of purchases. For small wineries, raw materials are more expensive.

Winemaker Andrius Yucis whose plant in Crimea produces about 10,000 bottles a year, says that he still cannot agree the supply of 15 tonnes of grapes, although the contract was signed last April.

According to Stavtsev, as a result, the demand has increased even for previously unclaimed varieties. For example, Dagestan’s grape variety Moldova usually sells at around 18 rubles ($0.25) per 1 kg, but at the moment, the prices can reach 35 rubles ($0.48), he said.

Further rise in the price of grapes in the peninsula is likely because of bad weather in the spring. Experts underline that enterprises that produce PGI and PAO wines must use only local varieties and cannot substitute grapes with raw materials from other regions.

Prices for grapes are determined by the seller and the buyer and depend on many factors, including quality characteristics, variety, purchase period, etc., say experts at the Agriculture Ministry. An increase in demand for Russian grapes was expected after a sectoral law was passed.

Crimean Vineyards

Since the beginning of the year, 115 hectares of vineyards have been planted in Crimea, and by the end of the year, the plantations are expected to increase by 800 hectares in total. “There are currently about 18,000 hectares of vineyards in the Crimea. There were 115,000 hectares before 1985, and even more before,” says Dmitry Kovalev-Fedosov, Head of the Wine Laboratory scientific-methodological center at the Sevastopol branch of Moscow State University.

The dynamics look optimistic. However, according to Leonid Popovich, President of the Union of Winegrowers and Winemakers of Russia, this indicator should reach at least 1,000 hectares a year.

“The Krasnodar Territory plants grapes on an area of 2,000 hectares annually,” Popovich said.

“This year we have planted 51 hectares of new vineyards. We planted merlot and Sangiovese bushes,” said Anna Kovalenko, Chief Executive of Koktebel Vintage Wines. “Merlot is a proven classic variety, while Sangiovese is a trendy one today. We also have decided to try it out.”

An acute shortage of high-quality planting material remains a major problem for winegrowers and winemakers. Crimean nursery-gardens cannot meet even half of the industry's needs, and most of the missing seedlings have to be bought abroad.

However, the law on wine trade in the Russian Federation provides for cost compensation only for buyers of domestic seedlings.

“Seedlings are imported from abroad. According to the law, their purchase cannot be reimbursed. The relevant changes are now being prepared, but the bans may simply freeze the industry due to a lack of seedlings. For example, France has international varieties and the quality of seedlings is high. Some peculiarities are unavoidable. However, such issues can be settled. The main thing is that there is a growing demand for Russian wine and grapes,” Zakharyin said.

The existing domestic nurseries provide primarily for the large farms where they were established. Only a small proportion of the seedlings gets to the market. Of course, demand far outstrips supply. The Koktebel winery has bought seedlings from Poland this year. Other producers import planting material from France or Serbia.

How to Choose Crimean Wine

There are several things on the label one should pay attention to when buying Crimean wine.

First, all Crimean wines must have the Crimean PGI mark from now on. If there is no such mark on the label, it means that there is a bottle of wine simply made from Russian grapes.

Secondly, the label has to feature the Wine of Russia inscription. This guarantees by law that no imported wine material was used in the production of the wine.

Thirdly, the year of the harvest must be indicated. This information is usually placed on the front of the label but can also be found on the other side of the bottle. If there is no information about the year, it could be a wine made from materials of different years.

In addition, the label must indicate whether the wine is red, white, or rosé. The names port, sherry, muscat, Madera, and others cannot now be put arbitrarily as preferred by the producer. Their characteristics are fixed by law. The grape variety must be appropriate to the type of wine. Dry wines must not contain more than 4 g/dm3 sugar, semi-dry from 4 to 18 g/dm3, semi-sweet from 18 to 45 g/dm3, and sweet more than 45 g/dm3.

Buyers should not be alarmed if sulfur dioxide is listed as a preservative. It is used everywhere, even in expensive French or Spanish wines. As a rule, its content is negligible and it has no impact on health.

There is also so-called ‘dioxide-free wine’ that is stored for a short time and is more likely to belong to the premium segment with a corresponding price category. There are private producers of such wine in Crimea.

“Investors have begun to put money in Crimean winemaking,” said champagne specialist Ilya Voloshin. Winemaking and viticulture is a business with rich pickings. It costs a lot to enter the market. There can be no powerful breakthrough without heavyweights. It is not only about investing money but also about protecting their capital and lobbying the interests of the industry in a good sense. Along with the large farms, there are many relatively small, but modern, European-level wineries that prioritize the quality of the wine over production volumes. These processes have begun, and they are unstoppable. One may say that the Crimean winemaking industry is experiencing a Renaissance.

Crimea has bright prospects. It has a large tourist flow, which implies some entertainment options, among which wine is not at the last place. Besides, wine culture is now forming with vineyards and wine production that are in synergy with restaurants, hotels, and health resorts. All this will develop in the republic, Crimean winemakers believe.

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