TBC Capital evaluates the impact of the war on the wine industry for two scenarios.
According to the first scenario, total export falls by 33% in 2022 relative to baseline (26% YoY), while in delayed resolution it decreases by 44% compared to the baseline (38% YoY).
Due to the ongoing war, TBC Capital does not expect wine to be exported to Ukraine from March till the end of the year. This will cause drop in annual export to Ukraine by 90% compared to the baseline (89% YoY).
"The export to other countries will be mostly affected by reputation risks, causing less damage in comparison to economic ones. We estimate the value of Georgian export wine left unsold to constitute $87m in this scenario", - the report reads.
In case of delayed resolution, total export decreases by 44% compared to the baseline (38% YoY). In this scenario, Russian companies
will not be able to solve payment problems till the end of the year, dropping the export significantly by 55% compared to baseline (50%
YoY).
The estimated export in Ukraine remains the same as in the first scenario. The export in other countries declines by 14% compared to baseline (3% YoY).
As the overall situation on the market worsens more wine is left unsold. The financial value of this excess is $116m.
TBC Capital expected a balanced growth of wine industry, had 2022 continued in peace. Export was estimated to increase by 11% compared to 2021, with export in Russia and Ukraine growing by 10% and 9%, respectively.
