Moldova’s prized wine industry in turmoil as war rages in Ukraine

Two months ago, Cricova winery, just outside of the Moldovan capital of Chisinau, was producing internationally acclaimed wines and inking major new export deals.

Now, the company is worrying about the sustainability of its business, with exports to three major partners cut off due to war, containers full of wine stuck in Ukraine and no ability to source supplies.

“We just started to have good competition on the international market with other big wine-producing countries,” Livia Sincumami, a representative for Cricova, says in an interview with Global News at the vineyard.

“Moldova is a wine country.… We have it in our blood, to grow vines.”

Once home to a burgeoning market of high-quality, low-priced wine, Moldova’s vintners say the war on its borders will have a disastrous knock-on effect on the price and availability of its products.

With its warm climate and fertile soil, tiny Moldova, sandwiched between Ukraine and Romania, has long been one of eastern Europe’s most significant wine-producing countries.

The country has the biggest density of vineyards in the world, covering 3.8 per cent of its territory and seven per cent of its arable land. It boasts a whopping 89,768 vineyards and 331 wineries in a country just 33,846 square kilometres in size (slightly bigger than Belgium), with a population of 2.6 million people.

Wine is currently the third most exported product from Moldova – behind insulated wire and sunflower seeds — and in 2019, the country exported $137 million in wine, ranking it the 20th largest wine exporter in the world. Its most important markets are Belarus, Russia, Europe and China.

Those statistics might not sound impressive, but for one of the poorest countries in Europe, its transformation from state wine producer for the Soviet Union to critical darling has been painstakingly long – and vintners worry their toil could be wiped out in an instant.

About 15 kilometres outside of the Moldovan capital of Chisinau is one of the country’s most important wine-producing regions: Codru. The area is known for its Sauvignon, Riesling, Cabernet and native Feteasca grapes.

During a visit in March, the area’s rolling hills are scattered with rows upon rows of vines, dusted with a thin sheet of snow.

But some 100 metres below this picturesque surface, a rabbit warren of limestone tunnels tells the story of this burgeoning industry’s Soviet past.

Several wineries in this area were established on the site of former, or still functioning, limestone quarries. After the fall of the Soviet Union, the quarries collapsed and vintners converted the tunnels to roads and naturally temperature-controlled underground cellars.

Prior to its independence, Moldova, with its temperate climate and fertile soil, was the Soviet Union’s main wine producer — to be made and consumed in bulk.

This suffered in the mid-1980s, when then-Soviet president Mikhail Gorbachev launched anti-alcohol reforms and pulled up one-third of Moldova’s vineyards.

So, when the country gained its independence in 1991, winemakers had some work to do. Land that was confiscated by the state was redistributed and the wine industry began to re-emerge, slowly, to find new markets.

Those communist links are now encased in glass and displayed via Soviet-era wine bottles and other relics in mini museums at wineries across the country.

Cricova, located in Codru, has one of these displays dedicated to Soviet times. The winery, founded by the Soviets in the 1950s, has grown to become one of the country’s most famous, renowned for its huge underground limestone “cellars” — 120 kilometres worth of them.

It is especially well-known for its sparkling wines, produced in accordance with the classical French “Champenoise” method, pioneered by Dom Perignon.

Cricova was also, until recently, home to a private wine collection for Russian President Vladimir Putin. Our tour guide says that this has been moved, but when we ask why and to where, she says she doesn’t know.

Cricova spokesperson Sincumami says, through a translator during a meeting at the winery’s headquarters, that the war has affected them in “the worst possible way.”

Like much of Moldova’s exports, being a land-locked country and without a port itself, most of their wine is sent internationally through the Black Sea port of Odesa in southern Ukraine, which is currently being advanced upon by Russian troops. They now have two containers stuck in Odesa, which were supposed to be en route to Africa, Turkey and China.

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Sincumami says the Moldovan government is trying to help them retrieve the containers, but they cannot find a company willing to drive there to get them. They’re now trying to figure out alternative options to get their wine to the world – likely to be the 500-kilometre journey to Constanta in Romania or 1,000 kilometres to Istanbul.

Exports are critical to Cricova, like many Moldovan wineries. In 2021, about 50 per cent of Cricova’s 9.6 million bottles of wine were exported. Its main markets are Romania, Kazakhstan and China, with some, too, to Belarus and Russia.

In February, Cricova signed a large contract with Russia – which is now stalled.

However, Sincumami says the company knows better than to rely on Moscow as an export partner.

In 2006, Moscow banned all imports of Moldovan wine, when chief sanitary inspector of Russia Gennadiy Onishchenko claimed that heavy metals and pesticides were found in them. Moldova claimed there was no proof and no other countries had identified any problems with the wine, labelling it economic blackmail.

This happened again in 2013, when Russia banned all imports of Moldovan wines and spirits, saying, without providing any evidence, that the wine was of “unsatisfactory quality.” It came as Chisinau was attempting to establish closer ties with the European Union.

This uncertainty, Sincumami says, led Cricova, like many other Moldovan wineries, to search elsewhere for export partners. This is why, when Moldova applied for fast-track EU membership on March 3, winemakers were overjoyed at the prospect of tax-free trade deals.

However, exports are not the only issue here – many wineries rely on supplies from across the border, too. Cricova, for example, imports its bottles and boxes from Ukraine and a Russian company does its typography.

Buying these elsewhere will significantly increase its costs, Sincumami says.

So, too, will increased fuel costs and an expected dearth of tourists. Moldova’s proximity to the fighting in Ukraine and its closed airspace, imposed since the start of the war, has Sincumami worried for the future of the business.

Tourist numbers in recent weeks, which would usually be low during the winter season, have slowed to a trickle. Our guide, on a tour through Cricova’s wine tunnels, says there is barely one tour a day right now, when in summer there would be six or seven.

“In Moldova we don’t have anything in terms of tourism like the sea and mountains, we only have grapes and good soil for growing vines,” Sincumami says.

“But it’s not just about the companies. People have vines in their gardens and you’ll always see a bottle of handmade wine in their kitchens.”

She says joining the EU, and the trade deals that will bring, is now the only way the company can recoup these losses.

Fifty kilometres north of Chisinau, Château Vartely, renowned for its Cabernet Sauvignon and Chardonnay, is also concerned about the impact the loss of tourism will have on the business’s future.

Andrian Digolean, commercial director of Chateau Vartely, says right now, every room at the winery’s hotel is occupied by Ukrainian refugees – meaning they couldn’t welcome tourists, even if they wanted to.

Moldova has become a transit point for many Ukrainians fleeing war, with the latest numbers from UNHCR suggesting about 300,000 refugees have entered the country since Feb. 24. That number could triple if Odesa is bombed.

“A big part of our turnover is wine tourism. The area was already heavily affected by the pandemic for the past two years, and now, with the war on our threshold, we’re sure this part of our business will not thrive,” Digolean says.

“We’ve had a lot of tourists visiting from Ukraine and Russia. Still, EU tourists will (not) be happy to see Moldova in its current condition.”

The company will lose 10 per cent of its turnover if exports to Ukraine, Belarus and Russia do not resume by the end of the year, Digolean says. The winery will also need to impose new conditions on the countries too – asking for payment in advance, rather than the current one- to three-month payment vacation.

“Of course, we are worried mostly for the security of our employees and then about the longevity of the business itself,” Digolean says.

“We hope that this unthinkable war will end soon and will not further affect our republic.”

Digolean, too, hopes joining the EU will provide some reprieve, especially with the DCFTA free trade agreement that will allow them tax-free exports, saying “we have wanted this for 30 years.”

For internationally acclaimed Chateau Purcari, in Moldova’s southern Stefan Voda wine region, the prospect of joining the EU is a “huge opportunity” for investment.

Chateau Purcari sits just 25 kilometres from the Palanca border crossing with Ukraine and the country is its fourth most important market.

It was also heavily reliant on Ukraine for supplies and materials, which Andrei Leahu, spokesman for Purcari Wineries Group, says will increase the price for their products if they have to source it elsewhere. So, too, will the logistical issues they are now facing.

But for now, Leahu says the company is focused on supporting Ukraine.

“We will continue to support Ukraine till the end of this unfair and unnecessary war. We strongly condemn it,” he says.