09:00 GMT +317 October 2017

    Georgia losses from Russia ban on wine, water exports at $40mln

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    TBILISI, October 2 (RIA Novosti) - Georgia's state statistics agency said Monday the nation's economy had incurred heavy losses as a result of a Russian ban on Georgian wine and water exports.

    Russia, the main importer of Georgia's produce, closed its borders to Georgian wines on March 27 over the producers' alleged failure to meet food safety regulations. A major Georgian mineral water, Borjomi, was barred from the country in May, also over safety concerns, and was soon joined by another brand, Nabeglavi.

    The bans further escalated already strained relations between the two post-Soviet nations, with many in Georgia seeing them as retaliation for Tbilisi's course toward integration with NATO and for its efforts to oust Russian peacekeepers from the breakaway provinces of Abkhazia and South Ossetia.

    According to Georgian statisticians, Georgia's overall losses from the measure have reached $35-40 million. Its exports to Russia fell to $3.6 million in April 2006, from February's $18.7 million, and further down to $3.2 million in June.

    They said the ban was to blame for Georgia's mounting trade deficit, which increased 82.2% year-on-year in the first half of 2006, to $1.6 billion.

    Wine exports dropped to $5.6 million in the year's second quarter, from $21.5 million in the first, former Soviet republics such as Ukraine, Kazakhstan and Belarus being the main importers.

    However, Russia still is Georgia's principal trade partner, with turnover between the two countries increasing 45% year-on-year in January-June 2006 to $324 million, the agency said. Imports from Russia grew by 68.5% over the period, whereas exports shrank 14.6%.

    In the first half of this year, Russia reportedly accounted for 15.8% of Georgia's foreign trade, 0.7% less than in 2005.

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