Assessing Competitiveness In Moldova's Economy - Economic Growth

Development Alternatives, Inc. Moldova Competitiveness Assessment: The Wine Cluster—Annex A
compared to others. Some Moldovan brands try to look similar to French wines, with simple,
less colorful labels.
Importers’ Perspective
Moldovan wine importers see demand for Moldovan wine as still very high and growing, but
with demand coming mostly from the lower-price segment. In their view, the declining
market share of Moldovan wine in Russia is explained by the introduction of new imported
and Russian wines, not a decrease in demand for Moldovan wine. The Moldovan share in the
wine market is viewed as declining for the same reason that the share of French wines in the
world wine market is declining—taste is changing because of greater consumption and the
availability of a huge variety of new products.
Problems
One opinion is that, traditionally, Moldovan wine producers were represented by large and
medium-sized factories, but in the last couple of years many small producers started entering
the market, focusing on producing large qualities of cheap wine, with little attention paid to
quality. These producers target the lowest-end Russian consumer. This trend has had a
negative effect on the overall image of Moldovan wine on the Russian market.
Moldovan producers often took traditional proximity and success on the Russian market for
granted. Low-quality, cheap Moldovan wine flooded the Russian market. At that time
Russian consumers were not very demanding. Many Moldovan producers assumed that
Russian consumers would continue to buy cheap Moldovan wine and tended to give little
thought to the emerging competition in the Russian market. They did not see a need to
improve production or promote the good image of Moldovan wines in Russia. In recent
years, with increased competition, the quality of Moldovan wines may have improved
somewhat, but there continues to be a traditional lack of promotion.
As a result, even knowledgeable people in Russia are often not aware of the qualities and
potential of Moldovan wine. High-quality Moldovan wines are available, but current image is
poor and it is hard to win back the Russian high-end consumer. Marketing of Moldovan
wines is poor and often nonexistent. Moldovan wines are also poorly represented at
exhibitions, a very competitive area on the Russian wine market. Promotion requires a
sufficient financial commitment, and importers of Moldovan wine are reluctant to make that
commitment and fund marketing campaigns, hoping that since the wine is cheap it will sell
anyway.
There is a tendency for growth in the share of higher quality Moldovan wines on the Russian
market. However, in 2002 there were 60 importers of Moldovan wines and still only 15 of
them focused on high quality wine. They held 40 percent of the market, with 60 percent
going to the low quality Moldovan wine.
Recommendations
July 2004 • DRAFT Page 22