Valuation and Value Drivers in the Georgian Wine Industry

Ing. Tamta Gventsadze

Master's thesis

Abstract:

The importance of wine in Georgia is threefold: political, economic and social. The winemaking history here started 8 000 years ago and lasts up until now. There are roughly around 500 endogenous varieties of vine harvested in this territory. Vine represents second biggest commodity for Georgian economy. Wine industry has faced very complex problems in recent years, including Russian embargo on exports in 2006; outcomes of global economic crisis in 2008, the Russo-Georgian armed conflict in the same year and harsh interventions from former government during 2008-2012. Considering the oversupply of global wine market and gradual decrease in consumer demand ever since 1980’s together with immense competition both from New World and Old World wine countries, Georgia has to come up with very effective and efficient long-run strategy of wine industry development in order to first survive and then become successful. Performed industry analysis exposed the urgency of support from government side to empower small growers and wine producers across the country through providing available education; proper network establishment; future development strategy proposal and more importantly through release from government interventions.

Abstract:

The importance of wine in Georgia is threefold: political, economic and social. The winemaking history here started 8 000 years ago and lasts up until now. There are roughly around 500 endogenous varieties of vine harvested in this territory. Vine represents second biggest commodity for Georgian economy. Wine industry has faced very complex problems in recent years, including Russian embargo on exports in 2006; outcomes of global economic crisis in 2008, the Russo-Georgian armed conflict in the same year and harsh interventions from former government during 2008-2012. Considering the oversupply of global wine market and gradual decrease in consumer demand ever since 1980’s together with immense competition both from New World and Old World wine countries, Georgia has to come up with very effective and efficient long-run strategy of wine industry development in order to first survive and then become successful. Performed industry analysis exposed the urgency of support from government side to empower small growers and wine producers across the country through providing available education; proper network establishment; future development strategy proposal and more importantly through release from government interventions.

Keywords

Viticulture, Viniculture, Qvevri, NWA, GWA, SWOT, PESTLE, VRIO, Financial Analysis, DuPont Analysis, Teliani Valley, Chateau Mukhrani.

Language used: English

Date on which the thesis was submitted / produced: 29. 4. 2016

Thesis defence

• Date of defence: 9. 6. 2016
• Supervisor: doc. Ing. Jan Vlachý, Ph.D.
• Reader: Ing. Kateřina Kalinová

University of Finance and Administration

Master programme / field:
Economics and Management / Business Management and Corporate Finance