Assessing Competitiveness In Moldova's Economy - Economic Growth

Development Alternatives, Inc. Moldova Competitiveness Assessment: The Wine Cluster—Annex A
Moldova, appeared convinced that Argentinean wines will not present a long-term challenge
to Moldovan wines, primarily because of their low reputation on the world wine market.
CIS Imports
Moldovan and Georgian wines are considered a mass product and are affordable to the
majority of the population, with Moldovan wine being the more affordable, ranging from
RUB 60 to 300 per bottle. Demand for Moldovan wines is heavily determined by income
level. When price drives the purchasing decision, people buy Moldovan wines. The demand
for Moldovan wine is still huge, because this is what the majority of people can afford, and
most people would prefer them to Russian wines. Moldovan wines on the cheaper side are
attractive to consumers of the upper low-income category, that is, those who can afford to
spend a little more than the price of cheap Russian wine. Ukrainian wines, primarily from the
Crimea, have been losing market share, from 5.6 percent in 1998 to 3.8 percent in 2003.
There are also higher quality, more expensive Moldovan wines available on the market.
Some companies focus particularly on good quality mid-range Moldovan wines. However,
the challenge here is that as new imported wines are being introduced in a similar price
category, people are likely to try new products. Some observers believe that after having tried
French and Italian wines, people who can afford it will try exotic New World wines; and after
having tried a variety of wines and having lots of choice available, they are unlikely to go
back to Moldovan wines. The variety of products on the market is the main trend presenting a
challenge to Moldovan wines. The consensus is that Moldovan wines are still very popular
mostly because of price and that people will continue to buy them, especially in provincial
regions. But Moldovan wines of a more expensive category face competition from other
imported wines.
Georgian wines (8.9 percent of imports in 2003) tend to be more expensive (RUB 250 per
bottle, and above). Georgian wines are present in most price categories, and offer more
choices in the higher-end category. There are some Georgian brands that are considered elite
wines and can be found on restaurant menus. Companies working with wealthy individual
clients offer some Georgian wines, along with Italian and other elite wines. Review of
promotional materials also shows that some brands of Georgian wines are being marketed as
high-quality elite types. More sophisticated consumers will still rather choose Italian, French,
South African, or Chilean wines, but there are loyal consumers who choose high quality
Georgian wines, which have traditionally been considered very good. Brand loyalty
continues, despite significant counterfeiting problems.
Russian Wines
Russian wines compete exclusively on price and are popular with the low-income population.
They are produced in high volumes and their market reportedly grew in 2002 by 15 percent
and in 2003 by 10 percent. Producers of Russian wine use either local or imported materials.
These wines are cheaper even than the low-end Moldovan wines. Russian wines are also
July 2004 • DRAFT Page 20