Wine in Azerbaijan

PRE-COVID-19 PERFORMANCE

Wine continues to grow in 2019 backed by an improving economy and a buoyant tourism industry

Although wine is becoming more popular in Azerbaijan, per capita consumption remains relatively low. This reflects the fact that most Azerbaijanis still see wine as a drink for special or celebratory occasions, rather than for regular consumption, such as with evening meals, for example.

Government initiative to boost local production of wine showing signs of success

In May 2018, Azerbaijani President Ilham Aliyev signed a decree approving the “State Program for the Development of Winemaking in Azerbaijan 2018-2025”. This initiative, one of the latest in a series of measures aimed at expanding the country’s winemaking industry, should have a positive impact on domestic wine consumption over the forecast period, while also helping local producers to increase exports.

Domestic players continue to lead wine, boosted by government support and growing recognition on the international wine scene

Domestic producer Ganja-Sharab Wine Factory JSC remained the leading player in wine at the end of the review period with its wide range of award-winning still light grape wine. Domestic players account for the bulk of sales, with tax increases seen during the review period making them even more price competitive versus imported brands.

2020 AND BEYOND

COVID-19 impact

On-trade volume sales of wine are expected to fall by 30% in 2020 in light of the impact of COVID-19. This compares to an expected 5% rise forecast for 2020 during research conducted in May 2019, ie before the spread of COVID-19.

Affected products within wine

With tourism largely put on hold in 2020 due to the closure of the country’s borders, the focus of wine producers is on locals and the export market. Disposable income has come under pressure within Azerbaijan with many consumers temporarily losing their jobs, or seeing their wages reduced.

Recovery and opportunities

Wine forms part of the Azerbaijani government’s economic development plan and as such it is expected to see a relatively swift recovery once restrictions are lifted. Key will be encouraging the return of tourism with there being a strong focus on encouraging the development of local wine on the world stage.

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