In Ukraine, it takes around 140 documents to legally register a winery, a grueling process that puts small producers at a distinct disadvantage. But a new law appears poised to change all that.
On March 20, the Verkhovna Rada passed a bill altering legislation governing wine and natural honey-based beverages, with 247 MPs voting in favor. The new law will create a simplified procedure for registering a small or medium-sized winery — one that produces up to 100 thousand liters of wine using grapes, berries, or honey it grows or produces itself.
Winemakers and businesspeople believe the new law will be a major boon for the culture of wine in Ukraine.
“On the whole, you can call this a revolutionary development,” says Serhiy Klimov, co-founder and owner of Kyiv’s Like a Local’s Wine Bar and creator of the UWine information portal. “It’s the best thing that the state has done for wine production in the history of Ukraine.”
Years of bureaucracy
Wine producers hope that the law will free them from the burden of Ukraine’s extensive bureaucracy. At the present moment, preparing the documents needed to register a winery takes an extremely long time, says Klimov. The potential wine producer is sent from one office to another to gather the needed documents. If even one document is missing or incomplete, the entire production is illegal.
The most patient producers spend the two or three years necessary to get a license, Klimov says. Others try to come to some kind of agreement with the authorities.
“On the whole, it takes an enormous amount of time, money, and energy,” he says.
This is a problem that Christophe Lacarin knows well. The French national has lived in Ukraine since 2002 and has produced wine in the country since 2005. However, like many small producers, he has frequently found himself operating outside the law.
Currently, Lacarin produces terroir wine — wine closely connected to a specific region, soil and climatic conditions — in Odesa Oblast. With the help of then regional governor Mikheil Saakashvili, he managed to get the necessary license after the Verkhovna Rada simplified procedures in 2016. But Lacarin has faced frequent problems.
Some of them appear absurd to him. For example, Lacarin was fined because he had a license for producing wine, but not so-called ‘wine materials.’
“When it’s in the bottle with an excise stamp, it’s wine. But when it’s in the barrels, it’s ‘wine materials,’” Lacarin says. “For that, I got my first fine.”
Additionally, Lacarin says he has been forced to pay a $2,650-$3,050 fine each year because regulatory authorities have always found that at least one of his documents was missing or incorrect. Lacarin believes the new law shows that Ukraine is slowly moving in the right direction.
But Oleksandr Kovach, a small wine producer who consulted with the government on the new regulations, says the law is not a panacea.
President Petro Poroshenko still must sign the law. Then, the Rada’s tax and tariff committee must resolve technical and legal issues related to its implementation. Legal wine from small producers would appear no sooner than Jan. 1, 2019.
The new regulations will indeed decrease the number of required documents. Producers will now only need a copy of their winery’s foundation documents, a document confirming that they have paid Hr 780 ($30) for a license, and an official declaration that the winery meets technical specifications.
However, Kovach predicts other bureaucratic challenges. “There’s still a lot of work ahead, and it will not be easy for the pioneers,” he wrote in an extensive Facebook post.
He also predicts difficulties for the illegal small producers to adapt to legal wine production. Currently, many producers make wine as a hobby and have other primary sources of income.
“Legal wine production is a business and not a hobby,” Kovach wrote.
Great potential
But for people like Lacarin, the law is still an important step. “What’s good is that there will be less and less corruption,” he says. “That’s what we need in this country.”
When he arrived in Ukraine, there was little good wine in the shops and hardly anything resembling a wine culture, he says. Now, there is a large selection of quality imported wine and Ukrainian production.
“Step by step, consumers get to appreciate and know what is a pleasant wine, what is very good wine, and what is shmurdyak,” he says, using a Russian slang term for low-quality wine. Liberalizing wine production will only further this process.
For his part, Klimov is also excited about the possibilities. He believes that legal production and greater competition will help develop Ukraine’s wine culture and boost wine tourism.
He also sees benefits for his own business. Like a local’s has two bars in Kyiv, where it exclusively serves Ukrainian wine and food. The business is doing well in its second year. Currently, it works with 10 wine producers. “Even five more producers will be a huge plus,” Klimov says. “And I am sure there will be many more.”
