Valeriu Mihaluta
When it became known about the new duty rate for Moldova, Chateau Vartely was preparing a container with dry wines of the IGP quality category for shipment to the USA. Fortunately, the American customer did not refuse the shipment. Our producer has been working with him for 10 years.
According to General Director Valeriu Mihălută, the prices for these wines for end consumers will increase by at least one third. The American partner assumes a reduction in the sales volume at this price (so far the wines cost about $6-7), because the buyers of this category are not very rich. They will reduce their wine purchases or switch to beer or bourbon. If sales in the U.S. decrease by 50%, it will represent only 2-3% of Chateau Vartely’s portfolio.
“But the duties have to be seen in a global context,” says the interlocutor. – For the third year, the decline in wine consumption has been continuing worldwide. In these conditions, the reduction of supplies to the largest import market will increase the pressure of competition in other sales directions. The grape harvest has to be processed, and wine has to be sold somewhere. For example, wine from the EU countries, which did not reach the US market, will partially stay in their countries and will look for new markets, including Moldova. And our wines, which are exported to other countries, will also have to make more efforts in the fight for consumers. Overproduction leads to lower prices, etc. So we get a whole chain of problems”.
Imagine what will happen to our domestic market when a flood of cheap wines from Spain and Italy comes here. According to some data, 500 thousand bottles of Prosecco were imported to Moldova last year. In the mass segment they cost 140-150 lei, while at discounts – about 80 lei. These wines are produced from pergola vineyards, where they harvest 30-40 tons/ha. Of course, the quality of wine suffers from such a load, making it watery, but what a price! Given the popularity of Prosecco, even if the quality is mediocre, it sells very well because of its affordable price. Even though there are many good sparkling wines in Moldova. Similarly, it has to compete with it in other countries.
The largest exporter of Moldovan sparkling wines to the United States is the Cricova combine. According to the general director Sorin Maslo, the distributor is currently analyzing the consequences of the 31% duties, but the price of wines will certainly increase. It is hoped that the behavior of buyers of these products, who are used to them, will not change. It is not yet known what will happen to the volume of supplies. However, the planned shipments for the next month or two are confirmed.
Trade partners from the United States offered Moldovan exporters of canned fruits and vegetables to share the costs of the 31% duty rate. “The domestic wine industry has low margins, so we cannot bear such additional costs,” Sorin Maslo continues. – But our distributor may have some support measures at the state level. During the pandemic, they had a lot of such benefits at the local level, because this company is a large employer.”
Vinăria Ungheni exports two to three containers of wine a year to the United States. Its co-owner Romeo Fortuna believes that the profitability of wineries in Moldova (at the level of 5-7%) does not allow them to participate in covering half of the U.S. duties. Without state support, producers will not be able to maintain the current level of exports.
