Last Easter with Ukrainian Cahors?

Kyiv, April 17, 2009 – This year may be the last when Ukrainian-produced Cahors wine will remain on Ukrainian Easter tables as the establishment of minimum retail prices for domestic wines, as proposed by the Ukrainian Economy Ministry, will make Ukrainian fortified and dessert wine too expensive for domestic consumers.

A bill amending the Ukrainian law on the state regulation of the production and sale of ethyl alcohol, cognac spirit, alcoholic drinks, and tobacco products, which was registered at the Cabinet of Ministers and could be passed next week, will seriously impact the Ukrainian winegrowing industry.

Today, upon its accession to the World Trade Organization, Ukraine has lost its right to regulate prices for imported products, and has the right to set minimum prices only on domestic products. In the opinion of Serhiy Petrenko, the director of the Association of Ukrainian Winegrowers and Winemakers, more favorable conditions for importing wine are currently being created in Ukraine. By passing this resolution, the Cabinet of Ministers of Ukraine, instead of supporting national commodity producers in its country amid the economic crisis, is instead supporting importers and creating favorable conditions for them on the Ukrainian market, Petrenko said. This opens the way to unfair competition in respect to national wine producers.

The lobbies of strong alcohol (vodka), which are pressing for the establishment of minimum retail prices for Ukrainian fortified and dessert wine, are trying to force Ukrainian producers to raise the prices of their products. These lobbies are seeking to equalize prices on the shelves in shops in order to impose vodka rather than wine on Ukrainian consumers.

A rise in wine prices will not boost budget revenues; quite the contrary, it will bring more job redundancies in the winegrowing industry (in which 1.2 million people are currently employed), as it may bring the bankruptcy, first and foremost, of wineries supplying raw materials to various wine producers.

"Any law should work for Ukrainian producers and consumers, helping both of them produce and choose the products they want. It turns out that Ukraine cares more about Moldova, other importers, and vodka producers, creating all of the conditions for them to gain our wine market," Petrenko said.