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Back to basics for Georgia's wine industry
By Nicholas Mchedlishvili

AKHASHENI, Georgia, Nov 11 (Reuters) - Every autumn, George Gviniashvili cleans up a huge 500 litre pitcher he keeps in the cellar and proudly fills it with his own home-made wine.

Like many of his fellow villagers, the 56-year-old from Akhasheni in fertile eastern Georgia has his own vineyard and the wine he produces lasts his family the whole year.

Georgian wine, little known in the West despite a tradition stretching back more than 2,000 years, was regarded as the best in the former Soviet Union.

"This vineyard is unique. These grapes won't ripen in other places, so there are no other wines like this," Gviniashvili said, looking over his neatly-tended crop in the green foothills of the Caucasus mountains.

In communist times, Georgia and the western republic of Moldova were the only suppliers of wine to the huge Soviet market -- Georgia alone sold millions of bottles each year.

But the collapse of the Soviet Union in 1991 brought competition from all over the world. The big state-owned wine producers which bought up all the grapes ceased to exist and Georgian peasants had to start again from scratch.

The transition took Georgia's winelands a century back in time.

Peasants with small plots of just one to two acres balked at the low prices offered for their grapes by the newly-privatised wine plants and began producing their own wine.

"I prefer to produce wine myself, and then sell it, rather than give my crop to the factory for 10 cents per kilo," said Gviniashvili.

PRICES ARE LOW

Farmers growing the red Saperavi and Kaberne grapes can expect to receive up to 50 cents per kilo, but some consider even that too low.

The local market for home-made wine sold in glass pitchers is booming -- a litre of white sells for around 50 cents and red wine for $2 to $3 per litre.

Wine plays an important role in a traditional Georgian feast or "supra" at which dozens of toasts will be made and wine glasses or even giant wine horns are constantly replenished.

Farmers in the eastern region of Kakhetisay still follow Georgia's ancient method of producing wine.

"Kakhetian wines are heavier but richer in tannins than the European-style wines produced in the factories," said Asmat Batiashvili, a microbiologist at the Tsinandali wine plant, one of the oldest in Georgia.

"The European-style wines are said to have more flavour and can be stored for a longer period," he said.

Rather than see Georgia's once-great wine sector dwindle to a cottage industry, French winemakers, who first came to advise Georgian wine producers in the 19th century, have appeared once again.

BIG BACKERS

In the early 1990s, they established Georgian Wine and Spirits (GWS), a wine-making company whose controlling stake is held by one of the world's biggest drinks companies, Pernod Ricard.

Already, GWS is selling Georgian wine in 25 countries -- both in the former Soviet markets where the taste is familiar and in new markets in Britain and the United States.

"The UK is an important market because it acts as a barometer of success," said David Nelson, director of Viticulture at GWS.

"If you do well in UK, you are international. So consequently we would like to see ourselves to continue to grow that market."

Not satisfied with the quality of locally-produced crops, GWS has planted 300 hectares (740 acres) of vineyards in Kakheti to produce its rich Mukuzani and Kindzmarauli reds.

Forty percent of GWS's output of five million bottles is sold within the former Soviet Union, but the new markets are growing, Nelson said.

The strategy is to sell on the basis of quality, not cheap prices. Bottles of GWS wine sell at around $7-$8 in British supermarkets.

Still far from the glory years of Soviet times, Georgia's wine industry is slowly growing again. According to government figures, wine exports last year were worth $8.6 million, up from $6.1 million in 1999.

Georgian wine is now the country's second biggest export after scrap metal from defunct Soviet factories.

"We are gradually moving forward," said Vazha Mamaiashvili, head of the government's wine-making regulation department.

"We are building new and modern plants and making changes for the future."

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