Wednesday 6th December 2000
Ukraine still struggles ten years after independence from former Soviet Union
Nearly ten years after gaining its independence from the former Soviet Union, the Ukraine is struggling.
Initial Western interest in investment and business opportunities there has been dented by the difficulties caused by corruption at all levels, delays in major privatisation of state-owned companies and complex red tape.
Nevertheless, many remain convinced that the country does have potential, especially with its wine trade - as Penny Young has been finding out:
A modern bottling plant from Italy fills 6,000 bottles an hour at the Niva wine-making plant outside Ukraine's southern Black Sea port of Odessa.
Niva is privately-owned. It was set up almost as soon as Ukraine gained independence in 1991. It was the first and still one of only a handful of privately-run wineries. Its owner, Valery Tintuloff, invested 150 roubles, now the equivalent of around $150,000 in his enterprise.
"It is a profitable business with a quick turnover. I like the fact that I have created a new modern enterprise. We began with 30 people making processed sweet wine for the Russian market. Now we employ 215 workers and we have our own vineyards. We now control the whole production."
Wine-making has a long tradition in southern Ukraine. The French built wineries there more than a hundred years ago.
The Soviets collectivised production and quality was unpredictable. The battle is on to improve standards and compete in world markets. Niva is working hard to do that.
| "In Soviet times, wines were produced to a level of sweetness which would be considered unfashionable in the West today." | |
Now, using well-known grape varieties, the company is producing red, white and sparkling wines ranging from sweet to extra dry. London wine-merchant David Broadbent says the taste and quality is beginning to match the eastern European wines already in the shops and in some cases even beat them - like Niva's red champagne.
"You will actually find red champagne in a number of countries in eastern Europe. This is a particular good one. It's got a little sugar in it but it has a wonderful aroma and it's made from Cabernet Sauvignon Pinot Noir. It's a really excellent wine and just something a little different in a sparkling wine."
David Broadbent works closely with Niva. He is already exporting 200,000 litres of wine to the UK and Canada and the USA are now interested. He says prospects are looking good.
"The conditions in Ukraine are certainly as favourable as anywhere else in eastern Europe and from my experience the way in which the vineyards are being cared for in places like Romania and Bulgaria there is enough opportunity for Ukraine to do a leap-frogging action over those into a good position in the neighbouring market which is after all Western Europe."
The 100-year-old Odessa Champagne Winery is a little different from that a Niva.
The winery is still run as a collective and the priorities of its director, Anna Mikhailenka - workers' benefits and job security - would probably make a Western businessman wince. But Mrs Mikhailenka is aware of the changes that have to be made.
"Our goal is not to increase production but to improve the quality of what we produce. Of course it is now more profitable to export our wines."
Like Niva, the winery has already started to produce a delicious dry and extra dry sparkling wine. But they say red tape, complex laws and corruption make it difficult to export. David Broadbent disagrees.
"We have been working here now for three or four years. Like many countries within this region, there are very defined rules which if you research clearly enough tell you exactly what you have to do in order to get the right documentation for wine to pass through controls."
It is beginning to look likely that in the near future, Ukrainian wines could take their place among those from central and eastern Europe which have already made it onto international shelves.
| "Ukrainian wines could take their place among those from central and eastern Europe which have already made it onto international shelves." | |
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