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On 24 June 2012 Professor Kym Anderson spoke at the AAWEICABR workshop in Avellino, Italy, entitled Technology and Innovation in the Wine Industry. Professor Anderson talked about the Georgian wine industry in a presentation entitled: ‘Is Georgia the next ‘new’ wine-exporting country? The roles of traditional vs. new technologies and trade alliances’.

Georgia has been producing and exporting wine for thousands of years, and until the trade embargo in 2006, the lion’s share went to Russia. Advantages include low labour and viticultural land costs by Western standards and recognition of Georgian GIs by the EU. The Ukraine is currently the largest importer of Georgian wine but there is potential in the rest of the CIS countries and Europe as well as Asia.

Professor Anderson’s presentation offers great insights into Georgia’s place in the global history of wine markets and its potential. Yet another wine-producing country to watch with interest!

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Professor Kym Anderson examines the importance of the wine industry in Georgia and how it impacts on the country’s rural development in particular.

Despite having an open economy and well-educated labor force, Georgia is one of the poorest CIS countries, and has among the highest income inequality and poverty incidence. Almost half the workforce lives in farm households and are engaged in low-productivity activities, earning a small fraction of urban wages.

The wine industry is dominant in Georgia’s rural economy, some being for self-consumption, some for sale. Professor Anderson asks: How might the wine industry contribute more to Georgia’s economic growth, export earnings and poverty alleviation over the next decade or two?

Georgia has a comparative advantage in wine production. Domestic consumption is high relative to incomes so the obvious focus for growth is in wine exports.

With the dissolution of the Soviet Union and even more so Russia’s ban on imports of Georgian wine since 2006, Georgia suddenly has an unusually large degree of freedom to influence its comparative advantage in wine for the decades to come. A key question is: which market segments, in which destinations, to target?

Professor Anderson also considers the potential for wine tourism to contribute to wine export growth.

Access the full paper here: Rural Development in Georgia: What Role for Wine Export Growth?