28.Jul .2021 13:30

Gov’t Announced Simplified Procurement Of $50 MLN For Vintage Subsidy

Gov’t Announced Simplified Procurement Of $50 MLN For Vintage Subsidy
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State Procurement Agency reports, that the government of Georgia has announced simplified procurement of 50 million USD.

Namely, the government-owned LLC "Crop Management Company" will buy grapes directly from growers living in Kakheti district and will produce wine-material and cognac alcohol from it.

According to the new draft Budget 2021, the government plans to spend a record subsidy of 138.4 million GEL on the current year's harvest. Accordingly, farmers from Kakheti and Racha will receive a significant amount of budget assistance before the elections.
The government is subsidizing the vintage for years. Under the terms of the subsidy, the government instructs its wine companies (Akura and Crop Management Company) to purchase grapes and funds the process with a state subsidy.

The state-owned wineries are processing the grapes and produce alcohol and wine materials from it, which are then sold at the auction. According to the government, the existing subsidy model is needed "not to have unused grapes" on the market.

According to public information requested by BM.GE from the Ministry of Environment and Agriculture, the state spent 212 million GEL on grape subsidy and purchased 285 thousand tons of grapes in 2015-2020. The largest number of grapes of 95 thousand tons was purchased in 2020 and the government spent 87.1 million GEL.