PDO and PGI IN Eastern Europe and the Former Soviet Union

Reforms have significantly affected the production, consumption, regulation, and price of wine in economies and institutions in Central and Eastern Europe and the former Soviet Union. This article addresses the consequences of reforms on the transitory changes in wine consumption and production.

It looks at how the wine industry has changed because of the reforms, including the changes to the production system and the wine supply chain.

It discusses changes in EU policy and the predicted implications of the “Eastern EU enlargement,” which refers to integrating central European countries.

PDO European Protected Designations of Origin

Drinking wine is a big part of life in Georgia, Slovenia, Hungary, Romania, Bulgaria, Poland, Russia, and Ukraine, although it varies widely from country to country.

Although all countries had their protected designation before the new EU policy, nowadays all they have been organized wine GROWING AND protection by EU PDO system without Russia.

Hungarian PDO’s

Following the 2008-2009 reform of the European Union’s common market organisation in wine, it imposed all protected designations of origin and geographical indications to prepare a product specification that described the conditions of their use. In this paper, we describe this process and the Hungarian system of geographical indications. 

As set by EU regulation No. 1308/2013, geographical indications represent a specific wine quality that is related to the place of origin to a certain extent. The relationship is strong with protected designations of origin (PDO) and weak with protected geographical indications (PGI). They regulate the factors laying behind this relationship in the product specifications that had to be submitted to the European Commission by 31 December 2011 (for the existing ones). Before that date, the Hungarian system of geographical indications included 33 PDOs and 13 PGIs.

HOWEVER, some of these geographical indications lost protection, as they did not submit their product specifications (by intention). Following the recognition of a new PDO in 2013, now there are 31 PDOs and 5 PGIs in Hungary.

 

Georgia PDO’s

Georgia has adopted the European Union’s regulatory structure, defining wines linked to a specific place. To date, Georgia has registered 24 Protected Designation of Origin (PDO) wine appellations. 

Slovenia PDO’s

All Slovenian wine that is to be sold has to be submitted for tasting, chemical, and physical analysis. The wine that passes the panel gets a certificate number, which is printed on the label, together with other information as to the origin and alcohol content.

 

For the wine to be PGI designated (Protected Geographical Indication) has to be at least 85% from one of the three designated wine regions, and those are Podravje, Posavje, and Primorska.

PGI (Protected Geographical Indication) = ZGO (zaščitena geografska označba/deželno vino PGO).

 

After regions come to districts, there are nine of them. Each district has permitted and designated grape varieties, which are determined by climate and tradition. If a new variety is to be added to the mix, it has to be submitted to the authorities.

 

If a wine is to be PDO (Protected designation of origin) the grapes have to be 100% from one of the nine designated districts.

PDO (Protected Designation of Origin) = ZOP (zaščitena označba porekla/vrhunsko vino zaščiteno geografsko poreklo or vrhunsko vino ZGP/ kakovosnto vino zaščiteno geografsko poreklo or kakovostno vino ZGP/ priznano tradicionalno poimenovanje).

Romania PDO’s

The Romanian wine Însurăței is now registered as a protected designation of origin (PDO) after the European Commission approved the request to have the local product included in the PDO register.

They only produced the wine in Brăila county, in south-eastern Romania. The wines produced under this designation can be white, red or rose. They can also sell însurăței as organic wine.

The Însurăței vineyard dates back to ancient times. Today, it has become an ecological vineyard, after several investments backed by EÎnsurăței joining 38 other PDO-registered Romanian wines. They protected over 50 Romanian wines at the EU level.

Bulgaria PDO’s

Bulgaria, although far from the most famous or prestigious of the world’s wine-producing nations, certainly ranks among the most prolific. The Eastern European country has a long history of viticulture, and its wine has more about it than implied by the sea of cheap red (mostly varietal Cabernet Sauvignon) that flowed westwards during the 1980s.

The nation is now home to a growing number of promising wine pioneers, but perhaps the most distinguished era of Bulgarian viticulture so far dates back to the mid-14th century, just before the once-powerful Bulgarian Empire fragmented and ceded power to the Ottomans. Bulgarian art over 1000 years old depicts wine as part of Bulgarian culture, particularly among the ruling classes.

One notable painting from 811 AD shows Bulgarian monarch Khan Krum drinking wine from the skull of Byzantine Emperor Nicephorus I, his opponent at the battle of Pliska. Today, the Khan Krum winery in the Black Sea region bears his name.

Bulgaria is gradually finding its identity as a modern wine-producing nation, discovering new terroirs, grape varieties and styles. It is yet to establish a particular ‘Bulgarian’ wine style, opting instead for reliable, marketable names such as Cabernet Sauvignon, MerlotChardonnayRiesling and Muscat.

They brought these French varieties to Bulgaria in the 1960s at the height of communist rule, their productivity earning them a place in many Bulgarian vineyards. They rapidly replaced such traditional varieties as Kadarka (Gamza), Mavrud and Melnik.

Only two subregions have been officially recognized by the EU at the PGI level – broadly equivalent to a French IGP or Italian IGT. These are:

– The Danubian Plains including the northern part of the Black Sea region

– Thracian Lowlands including the Struma Valley and the southern part of the Black Sea region

In addition, there are 52 designations at the PDO (AOP/DO/DOC) level. Like the PGIs they formalized these for Bulgaria’s entry into the European Union in 2007. However, only a fraction of these is used on any scale. Both producers and regulatory organizations still use other, more traditional geographic designations.

Russian wine refers to wine made in Russia, also including the disputed region of Crimea. The vast majority of Russia’s territory is unsuitable for grape growing, with most of the production concentrated in parts of the Krasnodar and Rostov regions, as well as Crimea.

Many low-cost products characterize the Russian market, with a significant part of local wines having a retail price of fewer than 100 rubles ($1.71). Attempts to shift away from the low-quality reputation of Soviet wines have been moderately successful, though 80% of wines sold in Russia in 2013 were produced by grape concentrates.

In 2014, the area of vineyards ranked Russia 11th worldwide under cultivation. Local authorities promote the Russian wine industry as a healthier alternative to spirits, which have higher alcohol content.

Wild grape vines have grown around the CaspianBlack and Azov seas for thousands of years with evidence of viticulture and cultivation for trade with the Ancient Greeks found along the shores of the Black Sea at Phanagoria and Gorgippia. It is claimed that the Black Sea area is the world’s oldest wine region.

The founder of modern commercial wine-making in Russia was Prince Lev Golitsyn (1845-1915), who established the first Russian factory of champagne wines at his Crimean estate of Novyi Svet.

After the Russian Revolution of 1917, the French wine-savvy professionals fled Russia, but the industry was gradually re-established, starting in 1920. According to Denis Puzyrev.

Before the 1917 Revolution wine was drunk in Russia only by the aristocracy, a situation that only changed under Soviet rule.[7] The wine industry experienced a rebound in the 1940s and 1950s during the Soviet era until the domestic reforms pushed by Mikhail Gorbachev in 1985 as part of his campaign against alcoholism. After the fall of the Soviet Union, the transition to a market economy with the privatization of land saw many of the area’s prime vineyard spaces being utilized for other purposes. By 2000 the entire Russian Federation had only 72,000 hectares (180,000 acres) under cultivation, less than half the total area used in the early 1980s.[5]

Semi-sweet and sweet wines account for 80% of the Russian market, a share exceeding 90% in the economy segment.[7] Since 2006, Russian wineries have adopted European techniques and standards. The Abrau-Durso winery is considered the flagship of the new wine industry.[7]

In 2018 and 2019, Robert Parker of The Wine Advocate rated several Russian wines and scored between 80 to 97 points.[citation needed]

In 2020 Fanagoria Blanc de Blancs Brut, a 2017 wine from the Fanagoria Estate Winery in Fanagoria on the Taman Peninsula, was awarded a gold medal at the “Chardonnay du Monde” (“Chardonnay of the World”) international tasting competition.[8]

 

Ukraine PDOs since 2021 much food and drinks are part of EU PDO and PGI system

We hope the war will finish soon and we will see separate wine regions in Ukraine protected by the EU.

A wine culture existed in today’s Ukraine, already in the 4th century BC on the south coast of the Crimea. They found presses and amphoras during this period. Wine cultivation in the northern part of the country (around Kyiv and Chernihiv) however only started in the 11th century by monks.

 

Vineyards in ShaboOdessa Region

Under Empress Catherine, the Great (1729–1796) in 1783 Crimea became a part of the Russian Empire. Count Mikhail Vorontsov planted the first wine gardens in 1820 and established a large winery near Yalta. The viticulture research institute Magarach was founded then in 1828. In 1822, with the approval of Tsar Alexander I, Swiss winegrowers from the canton Vaud established a colony at Shabo (French: Chabang). They later founded daughter colonies on the Dnieper and in Crimea. Wine from Chabag was displayed at the 1893 World’s Columbian Exposition in Chicago and received a medal of recognition.[1]

The founder of the famous sparkling wines is prince Lev Golitsyn, who for the first time manufactured Russian “Champagné” after the Crimean War (1854 to 1856) on his property, Novyi Svet near Yalta. Later, under the last Tsar Nicholas II (1868–1918) the predecessor of Massandra, today’s state winery, was founded. During Soviet times, Ukraine, with 2,500 km2 (965 sq mi) was the largest supplier of wines in the USSR. It came to a disaster in 1986: about 800 km2 (309 sq mi) of the vineyards were destroyed, when Soviet General Secretary Mikhail Gorbachev started a campaign against the over-consumption of alcohol in the USSR. Since 2000, the production and the export of the wines have ballooned.

After the annexation of Crimea, Ukraine lost not only 17 thousand hectares of vineyards but also wineries that provided 60% of its wines.

 

There have been considerable adjustments in wine consumption habits in transition countries, although these alterations vary. Consumption in the majority of countries fell significantly at first.

Real incomes in many countries that produce the most wine declined because of the reforms, which resulted in a considerable reduction in wine consumption (in Bulgaria, Hungary, Romania, Ukraine, and Russia). The GDP of these countries fell the most rapidly and persisted in its decline for the most of the decade from 1988 to 1998[2].

The consumption and production of wine in Russia and other nations of the former Soviet Union pale in contrast to the consumption and production of solid alcohol. Some feel that the increase in problematic liquor consumption during the transition era compensates for declining wine and champagne consumption.

The anti-alcohol campaign that raged from 1985 to 1987 and the subsequent liberalization that followed due to significant political and social changes had distinct effects on the consumption of wine and spirits in the FSU[3].

After the 1993 reform, alcohol consumption in Russia skyrocketed, which significantly influenced the price. In 1994, when the CPI climbed by almost 1,200 per cent, the actual cost of alcohol decreased by three, while the price of alcoholic drinks increased by just 421 per cent. Even the most basic foodstuffs increased by the same amount as a bottle of wine or vodka.[4]

Changes in Production and Yields

The political and economic developments have particularly hit the grape and wine sectors over the previous decade. Between 1984-1988 and 1993, wine output in the CEEC-10 and BNAC-5 regions decreased by 24% and 25%[5].

BNAC-5’s output has been inconsistent, whereas CEEC-10’s have remained somewhat stable. Wine output in the FSU continued to decline, reaching barely 43% of its pre-reform level in 1998.

*We know that wines which are not in PDOs Or PGIs can be yields as they want to have. We don’t check table wines by yield.

Despite this, throughout the second half of the 1990s, the pattern of wine production in the three regions investigated followed three separate trajectories[6].

We can now identify the same factors contributing to the output rise. Instead of a reduction in grape yields that was 53 per cent larger by 1994, as in CEEC countries, the rapid fall in wine production in the FSU was primarily because of a decline.

The former Soviet Union did not see an increase in vineyard losses until after 1993. Since the transition, the number of vineyards in the FSU had decreased by 25 per cent, and the area planted with grapes had dropped below BNAC-5.

Between 1994 and 1996, grape yields in several former Soviet Union nations, notably Russia and Georgia, remained constant. In 1999, however, output levels fell below 3,400 kg/ha due to a further fall[7].

Privatization and Restructuring of the Grape Producing Farms and the Wine Industry

Hungarian vineyards were privately owned before the reform, while vineyards throughout the former Yugoslavia, and Bulgaria were also privately owned before the reform. They grew grapes on cooperative and state farms during this time.

We know that after communism fell dawn, all vineyards went back to their owners.

During communism, they grew grapes on cooperative and state farms governments. In certain countries that have undergone political transition, land commercialization and land reform have reformed the grape industry.

Wineries have recently seen a rise in the proportion of vineyards they own. Ending land reparations and new landowners’ aversion to farming are enhancing the interest of wineries in purchasing a property. Wineries can purchase land because many new landowners are hesitant to cultivate it[8].

Since the fall of communism in other transitional nations, such as Romania, grape production has shifted from big state and communal farms to smaller family farms. Romania is one example that springs to mind. The average size of a family farm in Slovenia is 0.4 hectares, and there are 34,809 farms in the nation[9].

These vineyards are cultivated. Small family farms often adopt labour-intensive production methods. Grape producers have specific challenges if we expect them to make the required investments in human capital, equipment, and technology to modernize their production processes and fulfil the minimum grape quality standard.

Fragmented farm structures provide investors in the wine processing industry with unique challenges regarding grape harvest costs, vineyard consolidation, and on-farm investment opportunities.

The phylloxera destroyed most of the original vine plantations

After Bulgaria’s liberation in 1878, the wine industry experienced rapid growth and in 1897, the total area of planted vines reached 115 000 hectares. During that time, the phylloxera had spread in Europe (France) and reached Bulgaria’s vineyards in 1884, clearly the first in the Vidin region.

The phylloxera destroyed most of the original vine plantations in the country and put an end to the traditional viticulture in Bulgaria.

The destruction of thousands of hectares of planted vines put Bulgaria’s viticulture and wine industry at risk, but as the phylloxera had previously hit many countries in Western Europe, the Bulgarian Ministry of Agriculture acted promptly by inviting the renowned French wine expert Pierre Viala to solve the problem. Viala travelled around the country and recommended the American solution to the phylloxera problem, which had proven to be successful in the other struck countries in Europe.

The French expert made several other recommendations, which led to the establishment of the Pleven Institute in 1902. The renewal of the vines in the country started in 1906 but was done in a rapid phase only after World War I.

We saw the greatest development of Bulgarian viticulture in the 1920s and 1930s by introducing the vine and wine cooperatives. Those cooperatives transformed wine production in Bulgaria from a small private business into a base for the future wine industry. At the beginning of the 20th century, several strong winery centres were established, some of which were Lovech, Suhindol, Melnik, Plovdiv-Pazardjik, Chirpan, Pleven and Sliven.

They built most of those cooperatives via Austrian and other western European expertise and had an average capacity of 500 to 1,500 tons, while the areas of planted vines in the country reached 200 000 hectares. After the socialist revolution in 1944, wine production in the country was monopolized, consolidated and converted into a state industry.

During the socialist regime, they destroyed some of the vine plantations in the country because of Moscow’s anti-alcoholism campaign. An important factor introduced by the socialist regime in Bulgaria, which still reflects on the Bulgarian wine industry today, is that there was a mass plantation of international grape varietals like Rkatsiteli, Merlot, Chardonnay, Sauvignon Blanc, Cabernet Sauvignon, Muscat Ottonel and Traminer.

They initially limited the marketplace for Bulgarian wines to the Eastern Block of the Union of Economic Partnership’s framework. Until the 1960s and 1970’s standards were low, but then the mass production of prestigious red varietals marked its beginning and wines entered the international marketplace. In the 1980s, Bulgarian wines also entered some of the Western markets, reaching success in the United Kingdom, Japan, Germany and others, but 90% of the wine exports went to Russia.

After the fall of the socialist regime in 1989, Bulgaria’s viticulture and wine production experienced appreciable changes. They liberated the industry from government monopoly and a process of privatization of wine cellars and wine factories in the country followed, which caused great concussions, dismissals of employees, as well as, sometimes, closures and destructions.

In 1991, they returned agricultural lands to their pre-1944 owners or their heirs, which led to vineyards being owed by several heirs, posing significant barriers to potential investors. Wine producers faced the problem of controlling the quality of the purchased grapes. The high demand for raw material every autumn artificially escalated its price, and the most common practice was to harvest before the grapes are ready, leading to a decade during which Bulgarian wines had a distinct ‘green’ accent in their taste and aroma and lost most of their clients and markets.

However, the situation improved in 2000-with Bulgaria’s membership in agricultural funds and programs such as SAPARD (Special Accession Programme for Agriculture and Rural Development) and PHARE, and many foreign investors put their projects for modern wineries and cellars into reality. This evanesced the overall picture of the Bulgarian wine industry and small, medium and large, perfectly constructed and well-equipped new wineries appeared in each viticultural region of the country for only several years.

With several other private investments in the wine industry and improvements in technology, one can state that the image of the Bulgarian wine industry has been completely changed positively in only over a decade. With the new era in the Bulgarian wine industry, there has been a tendency toward small and medium-sized wineries and the style of wine production has changed towards the modern market tendencies worldwide.

 

Increased concentration in local wine markets may result in improved quality, innovation, supply, and labelling, similar to other sectors in transitioning nations. This increase in competitiveness will also inhibit the growth of the smaller local wineries[11].

 

 

 

See more articles here

 

Want to read more about wine? Try reading these books!

Wine: A Beginner’s Guide

The Wine Bible

 

On This Day

December 25, 1991 – The day when the Soviet Union collapsed. Several industries saw a downturn due to the fall of the Soviet Union. In the early years of the shift, wine processors, like their counterparts in the food processing business, had a tough time getting access to funding. Land and banking reforms were to blame, as were macroeconomic factors, including a decline in GDP and an increase in inflation[12]. In addition, GDP fell in the early years of the transition. Many winemakers were left in debt, and their predicament was made much worse when they could not sell their products in the East German and Russian markets. Most of the best wines were sent to the European Union for sale, while the inferior goods were dispersed across the former Soviet Union, Poland, and East Germany.

References

[1] Euromonitor, 2001, The Market for Wine in Romania

[2] Noev, Nivelin & Swinnen, Johan F.M., 2001. “The Transition Of The Wine Industry, Policy And Trade In Eastern Europe And The Former Soviet Union,” PRG Working Papers 31871, Katholieke Universiteit Leuven, LICOS – Centre for Institutions and Economic Performance.

[3] Gow, H., 2000, “Restructuring the agribusiness sector and the role of foreign direct investment” in Burrell, A. and A. Oskam (eds.) Agricultural Policy and Enlargement of the European Union, Wageningen Pers, Wageningen.

[4] “Wine in the Soviet Food Regime Balticworlds.com,” balticworlds.com, 2021.

[5] Tangermann, S., 2000, “Widening the EU to Central and Eastern European Countries: WTO and the Perspectives of the New Member States” in Burrell, A. and A. Oskam (eds.) Agricultural Policy and Enlargement of the European Union, Wageningen Pers, Wageningen.

[6] Rusu, M., 2000, “State and Prospects of Horticulturi in Romania”, paper presented at the international conference ,,Managing the Quality Chain: Environment, Production, Distribution and Marketing”, Guernsey, UK, September 12-15, 2000.

[7] Noev, Nivelin & Swinnen, Johan F.M., 2001. “The Transition Of The Wine Industry, Policy And Trade In Eastern Europe And The Former Soviet Union,” PRG Working Papers 31871, Katholieke Universiteit Leuven, LICOS – Centre for Institutions and Economic Performance.

[8] Noev, Nivelin & Swinnen, Johan F.M., 2001. “The Transition Of The Wine Industry, Policy And Trade In Eastern Europe And The Former Soviet Union,” PRG Working Papers 31871, Katholieke Universiteit Leuven, LICOS – Centre for Institutions and Economic Performance.

[9] “Wine  in the  Soviet  Food  Regime «Balticworlds.com,” balticworlds.com, 2021, https://balticworlds.com/wine-in-the-soviet-food-regime/.

[10] European Commission, DG Enlargement, 2000, Progress Reports.

[11] Noev, Nivelin & Swinnen, Johan F.M., 2001. “The Transition Of The Wine Industry, Policy And Trade In Eastern Europe And The Former Soviet Union,” PRG Working Papers 31871, Katholieke Universiteit Leuven, LICOS – Centre for Institutions and Economic Performance.

[12] “Wine  in the  Soviet  Food  Regime «Balticworlds.com,” balticworlds.com, 2021, https://balticworlds.com/wine-in-the-soviet-food-regime/.

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Eastern Europe, PDO AND PGI IN EASTERN EUROPE AND THE FORMER SOVIET UNION