INTERVIEW - Macedonian Winery Pivka Targets Flat Sales in 2009, Eyes Tourist Buck

Replicating last year’s sales volume of 170,000 bottles would be a great success, considering the strain that the global downturn has put on the company's business in 2009, Kire Andov told SeeNews.

Pivka will also focus on taking a serious stab at developing wine tourism as a side business, he said.

“If this year's performance is in line with our projections, we will launch in 2010 the construction of a restaurant with an area of 200-250 square meters in what would be the first phase of the [wine tourism] project,” Andov said, adding that an accommodation facility is planned for a later stage.

Pivka is located in Negotino, a small town in the central region of Tikves, Macedonia's biggest and most famous grape-producing area which accounts for 85% of the country's wine output.

The winery plans to seek funding for its wine tourism venture from the European Union’s Instrument for Pre-Accession Assistance for Rural Development (IPARD) if the project is eligible. Otherwise, the company will field a project for automated production, Andov said without elaborating.

Macedonia can expect some 45 million euro ($67.4 million) in EU aid for rural development under IPARD from the middle of next year. The wine industry and vineyards are among the priority axis of the programme.

Macedonia's balmy climate favours grape production and has helped maintain a centuries-old winemaking tradition, but the country's wine industry is suffering from chronic underinvestment.

Pivka has no plans to increase its current production capacity of 300,000 litres of wine per year, as it is going for high-quality output instead of chasing quantity, Andov said.

The winery, considered medium-sized by industry standards, exports 80% of its output to the U.S., Canada, the Czech Republic, Slovakia, Germany, Albania and all former Yugoslav states except Montenegro, Andov said.

"The competition on the Macedonia wine market is growing, as many small-sized wineries have their sights set on the premium segment," he said.

"The domestic market is undeveloped and could absorb, in the future, a larger quantity of quality wines. Increase of bottled wine for both domestic and export markets is recommended," IPARD said in its planning document.

According to Andov, the government can assist the development of the sector by organising promotional events at Macedonian embassies worldwide, using them as an opportunity to also showcase domestic food, beverage and confectionery producers.

This would be the simplest and cheapest way to position Macedonian wine brands on the premium segment , he said.

The Pivka Winery (www.winerypivka.com.mk), set up in 2002, implemented the HACCP food safety standard in 2005. It produces wine from grapes grown on a total of 4.5 hectares of company-owned vineyards, according to its website.

The winery has won many prizes at local and international fairs including wine exhibitions in Serbia, Croatia and France.

No less than 74 wineries operate in Macedonia, according to data of the Agriculture Ministry. Macedonian Farming Minister Ljupco Dimovski said recently the upgrades in the country's wine industry should focus on improving grape production.

Vineyards in Macedonia cover a total area of some 24,584 hectares, according to the Statistic Office’s 2008 agricultural census.

The country’s wineries planned to purchase 124,560 tonnes of grapes this year, 13% less than in 2008, the Macedonian Information Agency has reported.

Macedonia produces around 90 million tonnes of wine per year. Some 70% of the total wine production is exported, of which 92% is being sold abroad in bulk, according to IPARD’s planning document.

The EU granted Macedonia a membership candidate status in December 2005. The European Commission recently recommended the launch of accession negotiations in the light of the progress achieved by the Balkan country.

($=0.6676 euro)