Wine in Azerbaijan

PROSPECTS

Category benefits from government support of wineries in 2017

The wine-drinking culture remained undeveloped and grew from a low base in Azerbaijan in 2017, being mainly consumed as a higher-level alcoholic drink during events and celebrations.

On-trade and food/drink/tobacco specialists support increasing wine consumption

The growth of wine in Azerbaijan over the review period was spurred by surging advertisements through on-trade channels. With intense state support of domestic manufacturing, local producers benefited from opportunities to promote and present their products through on-trade establishments, including hotels, restaurants and others.

Wine to produce stronger performance over the forecast period

Over the forecast period, wine is predicted to gain strength. The key drivers of wine’s growth in Azerbaijan are expected to be recovery of the economy in the short term and subsequent reclaimed levels of disposable incomes.

COMPETITIVE LANDSCAPE

State support of local manufacturers and restrictions on imports reflect predominance of domestic brands

After devaluations took place in 2015, the financial status of local consumers worsened and their disposable incomes reduced substantially, resulting in an obvious shift towards economy products. In 2017, additional incentives provided by government officials to local vineries and, simultaneously, high customs duties and excise rates, encouraged price-sensitive consumers to purchase cheaper local products, while imported wine continued to represent premium brands.

New product launches of local players mainly target global trends

Local manufacturers are not encouraged to issue products with premium claims since local consumers do not have high trust in local manufacturers in terms of quality; therefore, they are not ready to pay much money for local products. Consumers who are willing to buy premium brands prefer globally-recognised names that are imported from countries such as France and Italy.

Leaders continue strong performance by expanding product portfolios

The competitive landscape within wine did not face significant changes, and local manufacturers, led by Ganja-Sharab Wine Factory JSC, remained the leader in 2017. The leading positions were also taken by other local companies, including Az-Granata, Vinagro Goygol Wine Factory, Agro-Azerinvest MMC, Absheron-Sharab ATSC, Fireland Vineyards and Caspian Coast Vineyards LLC, which account for the largest share of wine sales in Azerbaijan.

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