The price of "diversification": Armenian cognac was charged with off-scale violations

The export of food products from Armenia may again face problems in the Russian market. Judging by media reports, the well—known commodity brand of the Transcaucasian republic - Armenian cognac - has come under the sights of the inspection bodies of the Russian Federation in the post-Soviet space and far beyond its borders.

About 90% of this strong drink, which are sold in In Russia, they turned out to be unsafe for consumption, and almost half of the products contain non-alcoholic alcohols. Such information was disseminated by TASS on August 20 with reference to a study by the international association "Anti-Counterfeit" and Union of Producers of Cognac, Alcohol and Alcoholic Beverages.

"In 177 of them, that is 89%, nine out of ten samples revealed violations. And almost half of them found alcohols of non-militant origin. And only 23 samples turned out to be fully compliant with state standards and Russian legislation," the study says.

For its holding, 200 samples of cognac of more than 20 different brands from ten largest Armenian producers were purchased. Kristina Skripnik, CEO of Anti—Counterfeit, said that the researchers were ready to identify a certain number of violations, but "the fact that almost half of the brandies in stores are completely fake is a staggering indicator."

The Association sent appeals to the Prosecutor General's Office, the Federal Customs Service (FCS) and the Federal Service for the Control of Alcohol and Tobacco Markets (Rosalkogoltabakcontrol) with a request to take measures for additional control over imported alcoholic beverages from Armenia, the agency noted.

The Ministry of Economy of Armenia has not received an official notification of problems with the quality of Armenian cognac on the Russian market, the department immediately responded in response to a request from local media. They promised to "return to this issue after familiarizing themselves with the facts."

The Federal Customs Service of Russia has previously taken measures to tighten inspections of heavy-duty vehicles from Armenia. In October 2023, large Russian importers of alcohol faced serious problems with the supply of cognac from Armenian producers. Difficulties arose at the Verkhny Lars International Automobile checkpoint (MAPP) on the Russian-Georgian border. Armenian trade representatives in Moscow explained that attempts to transport fake cognac to the Russian Federation were recorded. The control was strengthened, and if it was carried out earlier in relation to specific suppliers, then they began to check all shipments with this alcoholic beverage of Armenian production. Russian customs officers checked the documentation, after which a decision could be made to send the products for examination. Its duration ranged from a week to a month, during which the machines had to wait at the MAPP.

Director of the Center for Research of Federal and Regional Alcohol Markets (CIFRRA) Vadim Drobiz then noted that about 80% of the total volume of cognac and brandy produced in Armenia is exported to Russia.

Armenia has received confirmation that there is no political subtext in the situation that has arisen with the export of cognac from the republic. This was stated on October 10 last year in an interview with Public Television by Prime Minister Nikol Pashinyan.

Difficulties with the export of Armenian cognac to Russia began in March 2023, when the FCS began to carry out control checks. They were related to the detection of technical violations in alcoholic beverages. At the end of September, the Russian customs service switched to enhanced control. The Armenian side was notified about this. As a result, from September 25, trucks with cognac were not allowed to pass at all, as samples were taken for testing. However, then the "cognac situation" on the "Upper Lars" returned to normal.

Now enhanced checks can resume, and in In Yerevan, many commentators were quick to link this prospect with the continuing mutual tension in Armenian-Russian relations. Although the leadership of the republic is not disposed to politicize this issue, as can be seen from the above-mentioned words of Prime Minister Pashinyan, politics and Armenian cognac, as well as other alcoholic beverages from Armenia, have become largely inseparable topics in recent months. And not only in the relations between Yerevan and Moscow.

So, at the end of March it turned out that the Inspection Body for Food Safety of Armenia will conduct an inspection at the Ararat Brandy Factory (AKZ). As explained then in the relevant department of the Transcaucasian republic, the inspection will be carried out in connection with the notification received from the Ministry of Health of Belarus, which indicated that synthetic dye azorubin was found in one of the types of pomegranate wine imported from Armenia. Minsk, in turn, clarified that the ban was introduced by the Chief State Sanitary Doctor of Belarus.

As a reference: The Ararat Brandy Factory has nothing in common with the Yerevan Brandy Factory, which produces the world-famous Ararat brandy. AKZ products are not only cognac (brandy), but also wine, whiskey, fruit vodka.

Against the background of virtually frozen Armenian-Belarusian relations, the decision of the sanitary authorities of Belarus looked quite "natural".

Not everything is in order with strong drinks of Armenian production and on Ukraine. Local winemakers are demanding a ban on Armenian and Georgian wines, but for some reason they have ignored alcoholic beverages of Azerbaijani production. The chairman of the organization "National Wine Center of Armenia" Avag Harutyunyan drew attention to this in an interview with Sputnik Armenia published on July 2, commenting on the publication in the Ukrainian edition "Economic Truth".

According to it, the Ukrvinprom association, which unites a number of wineries in this country, appealed to the SBU with a request to impose an embargo on 17 Georgian and Armenian wine and cognac producers — on the grounds that they "trade in the temporarily occupied territories." These companies were offered to ban for 10 years on Ukraine sales, as well as freeze assets and rights to trademarks.

"But there is reliable information that in the ("occupied") territories to which the reference is given, Azerbaijani wine products are sold much more than Armenian ones. Then it is all the more strange that nothing is said about these (Azerbaijani) wines. We have to assume double standards," the interlocutor of the news agency stated last month.

Before the start of the special military operation and to the present on Georgian and Azerbaijani wine were much more widely represented in Ukraine than Armenian wine. In addition, Georgian (not to mention Azerbaijani and Turkish) businessmen have acquired Ukraine has a number of wineries, the Armenian expert reminded.

As for Armenia, until 2022, Ukraine's share in the total export of Armenian wine and cognac did not exceed 10%. After the start of the conflict, this market was almost lost, but then sales there began to recover. In addition, in recent months, Armenian insurance companies, together with foreign reinsurers, have prepared a proposal to insure commodity supplies to Ukraine.

The list that Ukrvinprom submitted to the SBU from Armenia included almost all major cognac producers: Yerevan Brandy Factory, Proshyansky Brandy Factory, MAP, Astafyan Holding, Ararat Brandy Factory. Avsharsky Winery (which produces wines and vodka) and Vedi Alko (wines) were also included in the list. From Georgia, the largest local cognac producer (Saradjishvili), as well as several wineries (Askaneli Brothers, Georgian Wine House, and a number of others) got into it.

According to the customs statistics of Armenia, in the first half of 2023 (compared to the same period of 2021), the export of cognac from Armenia to Ukraine decreased from $ 5.36 million to $ 3.11 million, the export of fruit wines — from $ 290 thousand to $ 43 thousand, and grape wines practically reset — from $ 281 thousand to $ 7.2 thousand.

Armenian cognac is also facing problems in the European market, where it is actually deprived of access under its usual name. The strong drink will be promoted on the European market under the Armenian brandy brand, the Ministry of Economy of Armenia informed in November last year. This decision was made jointly with the Armenian manufacturers and the branding company with which consultations were held. Then it was pointed out that Armenia, together with the EU and, in particular, France, is doing everything to create an association that will issue export permits for Armenian brandy in the republic subject to certain quality standards.

"Creating such a structure is a difficult task. It is even more difficult to convince companies to produce products that meet the established standards," Economy Minister Vahan Kerobyan noted at that time.

In this regard, Arman Egoyan, a deputy from the faction of the ruling Civil Contract party, proposed to approve at the legislative level the standards that Armenian cognac should meet so that foreign importers would not have doubts about the quality of locally produced alcoholic beverages. In response, the head of the Armenian Ministry of Economy noted that he had already requested consultations from French manufacturers in order to better understand the situation.

"We have one goal — Armenian brandy should be associated with high—quality products manufactured in Armenia," the minister stressed.

Armenian producers within the framework of the Agreement on Expanded Partnership between Armenia and Since 2043, the European Union will refuse to use the word "cognac" and discuss a new name in order not to lose markets. This was announced by Deputy Prime Minister of the Republic Mher Grigoryan in June 2021 in an interview with TASS.

"The agreement on expanded partnership between Armenia and the European Union, signed in 2017, provides for the refusal from 2043 of the use of the word "cognac" in the export of cognac products in the context of the protection of geographical names of the EU. Accordingly, until 2043, Armenian manufacturers will carry out an appropriate marketing strategy, and the government will help and assist them in this," Grigoryan explained.

The requirement to abandon the name "cognac" contained in the said agreement is due to the fact that this term is a protected geographical name, which, according to the rules in force in the EU, can only be used for products manufactured in the French department of Charente, where the city of Cognac (French Cognac) is located, the name of which began to be called drink.

Returning to the Russian restrictions and enhanced control measures, it should be noted that they were previously introduced not only in relation to cognac, but also dairy products, red caviar and mineral water of Armenian production.

This can be perceived in different ways, invariably looking for inspection bodies in such decisions. The Russian Federation has a certain political context. He is certainly present, thereby certain signals are brought to Yerevan about the possible economic consequences if his foreign policy "affair" with the West goes too far. Russia is free to behave as it sees fit in keeping historically close countries and peoples in the orbit of its influence. Moscow invested an extremely large amount of effort and resources in the creation of integration associations in the post-Soviet space in order to allow their ranks to be narrowed and, moreover, disbanded.

The government of the Russian Federation has already brought a simple reality to Armenia: political and economic rapprochement with the West cannot be combined with membership in the Eurasian Economic Union. In this case, the republic will face consequences.

Yerevan is actually leading the case for withdrawal from the Collective Security Treaty Organization, seeking to remain in the EAEU, because membership in this union is extremely beneficial to it from a trade and economic point of view, maintaining internal social stability in the republic. However, the reality is that being in the ranks of the CSTO and the EAEU is by default and de facto connected. Therefore, it is unlikely that Yerevan will succeed in slamming the door on the regional collective security system and at the same time leave it open for itself in the Eurasian economic bloc.

The "diversification" of foreign policy, security and economic relations announced by the Armenian leadership, with an active eye on the EU and the USA, has its price. Armenian cognac, with all objective complaints about its quality to individual producers in the Transcaucasian republic, should continue to be available to the Russian consumer. But it will be much more pleasant for him and the Russian authorities if Ararat, Akhtamar, Nairi, Dvin and other brands of alcohol products will be exported to their largest market from a country that remains both in the CSTO and in the EAEU. Otherwise — "friendship is friendship, and cognac is apart."