Ukraine's wine in­dus­try goes for new growth

Kyiv Post Legal Quarterly - - Contents - BY BER­MET TALANT BER­MET@KYIVPOST.COM

— In a small vil­lage near HIY­CHE, Ukraine’s wine­grower Ukraine border Vi­taliy with Malanchuk Poland, works Ukrainian in his gar­den-turned-vine­yard. Pale flow­ers on the tips of young vines have al­ready set fruit. The new grapes, vis­i­ble among the leaves, are smaller than peas. Vi­taly care­fully takes a ten­dril and fas­tens it to a wire with sticky tape so that the vine grows up­wards. “Peo­ple go wide-eyed (in amaze­ment) when they learn I grow wine grapes in Lviv re­gion,” Malanchuk says. “But you just have to know what va­ri­eties to plant, and how to plant them.” early cause so “Our Lviv we or have the is cli­mate mid­sea­son-ripen­ing not first to har­vest yet frosts al­lows on come Ukraine’s by only mid-septem­ber.” around the va­ri­eties, wine­mak­ing grow­ing Oc­to­ber, be- of map. ter­na­tion­ally The coun­try’s undis­cov­ered rel­a­tively small wine and in­dus- in­try has tra­di­tion­ally be con­cen­trated in the south, around Odesa and Kher­son, as well as on Crimean penin­sula, il­le­gally oc­cu­pied by Rus­sia since 2014. An­other boom­ing wine re­gion is Zakarpat­tia. This fall, a newly es­tab­lished com­mu­nity of over 40 Lviv vint­ners are hop­ing to change that. In Septem­ber, they’ll host the

first wines, lo­cal rag­iste small-scale, This re­gional wines. pro­mot­ing small move­ment fam­ily-run com­mu­nity wine lo­cal — fes­ti­val a winer­ies. grape French is part fea­tur­ing va­ri­eties The of term the move- Lviv and ga- for ment less-known Vin­nyt­sya, has sprouted Dnipro, for wine and in Kropy­vnyt­skyi. grow­ing, re­gions of like Ukraine Lviv, found Un­for­tu­nately, in stores. Due vins to de lim­ited garage pro­duc­tion can’t be vol­umes, around 1,000 bot­tles per year, and the ab­sence of li­censes, garage wine­mak­ers sell only to friends, at food fes­ti­vals, and to or­der. But many hope to turn their hobby into a busi­ness. And a new law passed in April will help them, sim­pli­fy­ing the reg­is­tra­tion pro­ce­dure for small- or medi­um­sized winer­ies.

Learn­ing the land

Malanchuk, 38, started grape cul­ti­va­tion by chance four years ago, and then be­came a self-taught wine pro­ducer. In May this year, he won the top prize at the Kyiv’s Uwine Awards with an aro­matic white wine fer­mented from Traminer, an early ripen­ing, cold-re­sis­tant va­ri­ety he grew in his lit­tle vine­yard of 0.2 hectares in Hiy­che. and “It mo­ti­va­tion,” gave me a huge he says, boost show­ing of con­fi­dence a shed in the back­yard of his house where he keeps 54-liter glass bot­tles filled with fer­ment­ing wines. His achieve­ments even helped him to land a job as a man­ager at a 1.5-hectare pri­vate vine­yard. But he hopes one day he’ll fully de­vote his time to his own prod­uct. Much of what Malanchuk learned about wine­mak­ing came from an­other Lviv wine­maker, he says: Bo­hdan Pavliy, one of the re­gion’s wine­mak­ing pi­o­neers. Pavliy, once a small Lviv wine­maker, has since ex­panded from his na­tive turf. Af­ter years of ex­per­i­ment­ing with dif­fer­ent grape va­ri­eties on Lviv soils, Pavliy, 61, de­cided to plant a half-hectare vine­yard on the banks of the Dni­ester River in Kh­mel­nit­sky Oblast, where the cli­mate and rich soil al­low him to grow grape va­ri­eties for red wines. Four years ago, he ex­panded, build­ing a small win­ery nearby on the ter­ri­tory of the pic­turesque Podil­skiye Tovtry na­tional re­serve. Now he hopes to at­tract tourists. “I’m still lim­ited in vol­umes but I don’t want to go into mass pro­duc­tion,” he says. “I want to de­velop wine tourism, bring peo­ple for tast­ings at my win­ery,” he says.

Do­mes­tic pro­duc­ers

Both bill um- pro­duce ally and es­sary ers to new of a re­ceipt The ob­tain their had — adopted sell law, and men to bill to to their up win­ery’s be wine­mak­ers small-scale do for a also sub­mit see to pro­duc­tion reg­is­tered this. in the wares. 100,000 re­duces an April, Hr Un­til 150 foun­da­tion op­por­tu­nity 780 winer­ies will dif­fer­ent which liters and the re­cently, li­cense. ($30) need pa­per­work legally of al­lows — doc­u­ments, wine li­cense doc­u­ments just Un­der wine­mak- in ones pro­duce a a annu- medi- copy nec- that new fee, the and or­a­tory spec­i­fi­ca­tions. abol­ished tain from Ear­lier, a an the sep­a­rate that of­fi­cial grapes a in re­quire­ment the 2016, they li­cense cer­ti­fi­ca­tion win­ery grow. the to that gov­ern­ment This meets sell from vint­ners li­cense wine tech­ni­cal a made used lab- also obto ly-run spoke The cost to wine Hr dozen-or-so wel­comed 500,000 pro­duc­ers ($19,120). the in­di­vid­ual whom new leg­is­la­tion, the and Kyiv fami- Post but said be clar­i­fied. they were wait­ing for the pro­ce­dures to yet,” “We Pavliy haven’t said. seen “The the li­cense dec­la­ra­tion was abol­ished form but more there’s in­for­ma­tion.” an ex­cise tax. We are wait­ing for Well-es­tab­lished large winer­ies, mean­while, don’t see le­gal­ized garage wine­mak­ers as com­pe­ti­tion. At the end of the day, the more good wine is pro­duced in Ukraine, the bet­ter for the in­dus­try, says CEO of Inker­man win­ery Anna Gorkun, adding “as long as there’s an ad­e­quate qual­ity con­trol.” “The next step for the gov­ern­ment should be align­ing Ukrainian leg­is­la­tion with Euro­pean laws, defin­ing ter­roirs (ar­eas for wine­grow­ing, their soil types and mi­cro-cli­mates), and de­vel­op­ing an over­ar­ch­ing pro­gram for the de­vel­op­ment of wine in­dus­try,” she says.

Re­cov­er­ing from war

Rus­sia’s 2014 in­va­sion of Crimea, the ma­jor wine grow­ing and pro­duc­ing re­gion in

Ukraine, Ukraine them grape plants, new Orig­i­nally com­pany Mas­san­dra, sup­ply. cel­lars, has has lost been es­tab­lished in and con­trol Kyiv a Novy 3,500 heavy to main­tain of Svit, in hectares blow not Crimea, Inker­man), only to the of the its Inker­man vine­yards brand. in­dus­try. finest but vin­tage also had be­hind, Ac­cord­ing al­most to winer­ies aban­don and to half reg­is­ter Gorkun, (among of three its a buys then To­day, fer­ments grapes Ukraine’s and and bulk bot­tles Inker­man wine wine from doesn’t at lo­cal the Tavriya farm­ers own any co­gnac in vine­yards. south­ern plant in Ukraine. In­stead, Kher­son It it Oblast. sells The only Sev­astopol-based to the Crimean and part Rus­sian of Inker­man mar­kets, re­mains ow­ing in to op­er­a­tion, sanc­tions that but ban im­ports from the oc­cu­pied ter­ri­tory. With­out ac­cess to its es­tate in Crimea and home­grown grapes, Inker­man had to change its prod­uct range, and suf­fered a drop in sales. But things are look­ing up, says Gorkun. Last year the com­pany sold 10 mil­lion bot­tles of still and sparkling wine. This spring, it pre­sented a new se­ries of its sig­na­ture oaked wine — a wine fer­mented in oak bar­rels to pro­duce a dis­tinc­tive color and fla­vor. “The most chal­leng­ing task was to pro­duce wine as good as be­fore, so that cus­tomers wouldn’t taste the dif­fer­ence,” Gorkun says. She adds that the evo­lu­tion of Ukraine’s wine in­dus­try is stalled, ow­ing to a lack of state sup­port, high ex­cise du­ties, and the dom­i­nance of cheap im­ports. Ukraine’s as­so­ci­a­tion agree­ment with the Euro­pean Union also puts the Ukrainian wine in­dus­try at a dis­ad­van­tage, as it waives im­port tar­iffs on for­eign wine and grapes. “We didn’t give the Ukrainian wine in­dus­try a chance to re­cover from the loss of Crimea, but opened the mar­ket for im­ports,” she said. Ac­cord­ing to her, the ca­pac­i­ties of Ukrainian winer­ies al­low an in­crease in the pro­duc­tion of wine, but with­out Crimea there’s short­age of grapes and bulk wine. It would be log­i­cal to make im­ports of th­ese start­ing ma­te­ri­als to Ukraine duty-free, rather than lift­ing duty on wine, she said. As a re­sult of the surge in de­mand, the cost of home­grown grapes has risen by 50 per­cent over the last three years. To stim­u­late do­mes­tic vine cul­ti­va­tion, Gorkun says, state sub­si­dies to cover ex­penses for plant­ing vine­yards would help. Fur­ther­more, grow­ing do­mes­tic ex­cise du­ties on Ukrainian al­co­hol make it hard for Ukrainian prod­ucts to com­pete in price with cheap im­ports. In­ex­pen­sive Span­ish, Moldovan, French, and other wines are out­com­pet­ing Ukrainian ones, which are sold for Hr 100–190 ($4–7) for a bot­tle on av­er­age. De­spite the chal­lenges, Inker­man sees growth po­ten­tial on the do­mes­tic mar­ket, and fur­ther room for ex­pan­sion abroad. “There are good-qual­ity Ukrainian wines, and they’re not any worse than im­ported ones,” Gorkun said. “At Inker­man we de­cided that we would do our best, even if it takes us a long time to re­build what we had be­fore.”

Ukrainian wine grower Vi­taliy Malanchuk ties up vine shoots in his vine­yard on June 7 in Hiy­che vil­lage of Lviv Oblast. (Yevhen Kotenko)

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