International Wine Lawyers Association, European Section Annual Conference-Mainz, Germany, April 20th, 2018 From the land acquisition to the harvest - legal and administrative constraints. The case of Georgia Elene Totibadze CLO and Senior Trademark Counsel at Marussia Beverages B.V. Group CEO and CLO at JSC Marussia (Georgia) holding company of JSC Chateau Mukhrani and Georgian Wines and Spirits Company Ltd.
From the land acquisition to the harvest - legal and administrative constraints The case of Georgia Topics to discuss: Georgia - Cradle of Wine Land Acquisition Effects of privatization Administrative inspections Foreign investments and state support IP Law aspects Labor Law Uniqueness of Georgian Wine industry Wine Tourism in Georgia
Why GEORGIA is interesting in wine world? 8000 Years of Winemaking Scientists say 8,000-year-old pottery fragments have revealed the earliest evidence of grape wine-making The earthenware jars containing residual wine compounds were found in two sites south of the Georgian capital, Tbilisi Some of the jars bore images of grape clusters and a man dancing
Georgia is a land famed for its natural bounty. There are over 525 endemic grape varieties, a greater diversity than anywhere else, with around 40 being used in commercial wine production. Conditions are well suited for viticulture: Summers are rarely excessively hot, winters are mild and frost-free. The Caucasus mountains around the vineyards are full of natural springs and rivers drain mineral-rich waters into the valleys. Around 45 000 hectares of vineyards are under cultivation. There are 18 Specific Viticulture Areas (Controlled Appellations of Origins). GEORGIA Cradle of Wine
New Changes in Georgian Legislation Non-EU DCFTA June 2014 Association Agreement Entered into force on July 1 st, 2016 New amendments in the Law of Georgia on Vine and Wine after 1998 and New Technical Regulations on General rules of wine production and determination of permitted processes, materials and substances
Land Acquisition Difficulties in Georgia Special legal regime on the acquisition of agricultural lands by foreigners Legal and administrative constraints to existing owners and potential investors Ways of Privatization through direct sale in exchange of investment and public auction Ownership over vineyards only private owned and no-lease allowed
Land Acquisition Difficulties in Georgia 2013 - Agricultural Land is a Vital Resource of the country 2014 - Mathias Huter vs. Parliament of Georgia 2017 - New changes cannot serve as a complete ban on the sale of lands to foreign owner companies or persons without citizenship, however it will enable special regulations towards land as a Vital Resource
Administrative inspection of vineyards in Georgia No viticulture register at the moment Project started in 2017 Harvest register and management Ready product control by National Wine Agency Degustation Committee and Inspection
Wine Sales - Record number of Georgian wines exported in 2017 Georgia exported 76.7 million bottles of wine to 53 countries in 2017 a record number of wine in the past 30 years Last year Georgia generated about $170 million from the sale of wine abroad. Revenue increased by 49% from 2016, while the volume of exports increased by 54%. The top five countries that imported Georgian wine in 2017 were: Russia 47,778,920 bottles Ukraine 8,502,554 bottles China 7,585,407 bottles Kazakhstan 3,322,867 bottles Poland 2,676,440 bottles Export was made by 250 Georgian companies.
Foreign Investment and State Support FDI Preferential Agro Credit Project since 2013 Vineyards Insurance USAID IBRD 80M
IP Law aspects Trademarks Trademark Law of Georgia Class 33, mainly wine is the leader in TM applications Madrid system of international protection Main problem areas: China and Russia PDO and PGIs Law of Georgia on Appellation of origin and Geographical Indications State Registry 18 PDOs and 20 GIs Worldwide registrations- 3000 in EU Permission to have Appellation of Origins New project of amendments
Labor Law of Georgia New Labor Code of Georgia- 2013 No special regulation for vineyards workers Low wages 20 GEL i.e. 7 EURO per day during harvest Harvesting grapes by hand
Uniqueness of Georgian Wine industry Preservation of agricultural lands (pros & cons) Qvevri Wine and new color Amber Bulk wine import/export and blending limitations
Uniqueness of Georgian Wine industry Protected by UNESCO From 2013 Amber wine in the List of OIV s Special Wines
Wine Tourism in Georgia-Record number of Tourists in 2017 In 2017, 7,554,936 tourists visited Georgia, which brought $2.7 billion worth of income The number of arrivals in Georgia increased from: The United Kingdom + 39.9% Netherlands + 31.1% Spain + 29.9% France + 29.6% and Germany + 25.7%
Invitation to Georgia and our wineries
Many thanks for your attention! Disclaimer: the information provided in this power point presentation is of general nature and for information purposes only. Nothing in this presentation should be construed as legal advice or legal opinion. This presentation does not create a client-attorney relationship Connect on Linkdin: elenetotibadze@gmail.com www.linkedin.com/in/etotibadze