Armenian good have difficulty getting access to Eurasian Union markets
Complex logistics poses additional challenges to the exports of goods from Armenia to the countries of the Eurasian Economic Union (EEU), whereas the lack of relevant quality standards reduces its competitiveness, said the representatives of the Armenian producers, who were interviewed by The Caucasian Knot.
To increase exports of meat products and semi-finished products, it is necessary to reduce Armenian producer’s tax burden – says Harutyun Krpeyan, a brand manager at the Bacon Product Co.
He believes that through the saved funds it will be possible to introduce new technologies and production lines. In his opinion, increase in production volumes will allow to offer more competitive prices for the products.
“Armenian market is quite saturated with meat products. There is a need for mechanisms to facilitate export of products to the neighbor countries’ markets. In particular, a company that will represent the meat processing companies’ interests abroad could be set up with the government’s assistance, noted Krpeyan.
In the brand manager’s words, the Bacon Product Co. is exporting its products only to Georgia. He claims that the production volumes can ensure uninterrupted supplies to the south of Russia. “We could have taken advantage of the situation at the Russian market, caused by the sanctions and a ban on imports of the European meat products, but the prices offered by the retail networks is unacceptable because of high transportation costs, he stressed.
Krpeyan also pointed out that Armenia wasn’t exporting its meat products to the European market due to the stringent safety standard requirements.
“HACCP (Hazard Analysis and Critical Control Points) Certificate is required to export goods to Europe. However, there is no agency in Armenia that could provide such certification and it will cost a company thousands of dollars to invite European exports for certification, which the company actually cannot afford, he explained.
“There was an increase in the volumes of beer export to Russia in 2016, Aghavni Alaverdyan, ‘Kotayk’ brewery official, told The Caucasian Knot. She noted that there was a drop in the beer supplies to Russia after the collapse of the Russian ruble, which, in her words, affected the company’s revenues.
“In the beginning of the crisis, all contacts were concluded in rubles, rather than in dollars. Today the Russian partner companies have already recovered from the crisis. The contracts are again concluded in dollars under a mandatory condition that, if necessary, recalculation should be made at the exchange rate on the day the contract has been concluded, said Alaverdyan.
The company official noted that transportation remains the key challenge for export of beer to Russia. “Since there is no common border between the countries, the products lie idle for the period the ‘Upper Lars’ border checkpoint is closed, she explained.
Alaverdyan added that the brewery’s products are also exported to the USA, the EU countries, Australia and Iraq. In her words, negotiations are underway on supplies of beer to South America, namely, to Uruguay.
Vladislav Khachatryan, a marketing manager at the ‘Karas’ winery, believes that the major problem of exporting wine to the international market is a lack of relevant institution that will control the conformity of wine products with their territorial origin.
He noted that until recently, Armenian wines didn’t enjoy much popularity on the Russian market. In his opinion, in order to find its niche at the international market, Armenian wines should meet high quality standards.
“Armenia has no state mechanisms to control the quality of wine production. There is no law regulating cultivation of grape varieties in this or that region of Armenia, as well as which grape varieties should be used in wine production. If, for example, a blend of different grape varieties is required for production of ‘Areni’, it should be set forth in the law, which grape varieties there should be and at what ration. If there is an inscription ‘Areni’ on a bottle, it means that wine should meet the standard. Only promotion is hardly enough to conquer the market, said the ‘Karas’ company official.
According to his observations, unlike the exporters of brandy products, the Armenian wine exporters haven’t been much affected by a drop of the Russian ruble, because Armenian wines are less popular in Russian.
“Armenian wines have just started conquering the Russian market. The Russian consumer has learned that Armenia doesn’t just produce good cognac or brandy, but the wines too, said Khachatryan.
He also noted that the company didn’t have any problems with winegrowers, since the winery cultivates about 30 grape varieties in its own 450 hectare vineyards. In his words, the enterprise experts monitor the quality of harvested crops themselves.
· Armenia has been officially a member of the Eurasian Economic Union (EEU) of Russia, Belarus and Kazakhstan, since early 2015.
· Armenia has joined the EEU members’ agreements in the sphere of provision of services on equal basis. Whereas the agreements in the sphere of trade in goods provide for gradual transition to the EEU’s common customs tariff until 2022.
· Joining the EEU was accompanied in Armenia by the protest rallies against this decision.
· The experts, interviewed by The Caucasian Knot in September 2015, expressed the opinion that Armenia’s membership in the EEU didn’t yield any positive results to the country and prevented its development in all spheres. In June 2016, the Armenian Parliament’s Standing Committee on Foreign Relations discussed MP Khachatur Kokobelyan’s proposal on country’s withdrawal from the EEU. Following the discussion it was decided to postpone the debates on this issue for 1 year.