BDO Web Seminar Discusses Effects on German and Ukrainian Wine Industry

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BDO Web Seminar Discusses Effects on German and Ukrainian Wine Industry

Picture Credit: Denys Khalupenko

Sometimes the words of a ten-year old can move you to tears. That’s how many participants of the BDO seminar on March 31, 2022 felt like because the first web seminar after the relaunch turned out to be a very emotional event. It focused on the exchange with Ukrainian colleagues affected by the Russian aggression and on the effects for the German wine industry.

In short presentations, the speakers from the Ukrainian and German wine industry assessed the current situation from their perspective and discussed possibilities to support Ukrainian colleagues. The seminar was hosted by BDO President Prof. Dr. Erik Schweickert, Prof. Dr. Jon Hanf as well as Dr. Andrii Tarasov who was born in Ukraine and works in Geisenheim.

Flanked by disturbing pictures of their wine estate Château Kurin, which is located in the embattled area of Kherson, the son of the estate’s owner and enologist Denys Khalupenko described the situation on the ground as follows: “Right now we don’t have access to our winery. Around the winery there are broken tanks and corpses, a lot of military is next to our winery. The vineyards are not destroyed so much, but a missile crashed into the vineyards next to us. These are parts of it…” Château Kurin which has been a popular destination among wine tourists thanks so the international Wine Travel Award “Must Visit”, was shelled on March 6, 2022 and burned for an entire day before it was looted by Russian soldiers. They stole, for example, a narrow-track tractor which is indispensable to work in the vineyards.

Anna Gorkun, CEO of the famous Ukrainian brand ‘46 Parallel Wine’ drew a similar, gloomy picture of the situation and challenges faced by the Ukrainian wine industry. Wine producers are facing huge problems right now because many employees are fighting on the front lines so that there is no manpower left in the winery. In addition, supply chains are disrupted which means that producers can neither purchase materials or supplies nor sell their own products because of a lack of logistics.

In addition, the producers no longer receive any money from retailers because their stores are either closed or destroyed. And in their opinion, the situation is unlikely to change any time soon. Furthermore, a complete ban on the sale of alcohol was imposed at the beginning of the war, which means that nobody is buying wine any more. Although the ban on one sale of alcohol was partially lifted at the beginning of April for areas with no active combat operations, Anna Gorkun says: “As a citizen of Ukraine I am horrified by the idea of weapons and alcohol coming together in one place – no matter the economic consequences for my company or the entire wine industry. That’s why I call on all producers of alcoholic beverages not to sell their products to combat areas or regions where fighting is expected in the near future.” Since the western regions of Ukraine are also subject to repeated missile alerts, the question is which parts of Ukraine can be described as “peaceful regions” at all.

In his address, Dr. Sebastian Potyka, Spokesman of the Board at Pieroth Wein AG explained how the company reacted to the Russian aggression. Following the annexation of Crimea in 2014, Pieroth has significantly reduced its business activities in Russia. On the first day of the invasion, the company decided to immediately return its stake in the Russian distribution company and cease all business activity in Russia. With this decision, Pieroth had taken a strong stand even before any discussions about political sanctions came up because it did not want to continue selling products in Russia – this would not be in line with the company’s philosophy and compliance. Based on the suggestions of the Ukrainian speakers, however, Pieroth wants to check to what extent its wine purchase activities in Hungary can be extended to Ukraine.

Monika Reule from the German Wine Institute (DIW) showed the statistical developments of the export of German wines to Russia, which rose strongly until 2014, but slumped after the annexation of Crimea. However, in response to the Russian attack, the DWI as the central marketing organization for German wines immediately put its Russian activities on hold at the end of February.

In contrast to stalled business activities with Russia, Germany has stepped up its exchange with Ukrainian universities, as explained by Sonja Thielemann from Hochschule Geisenheim University’s International Office. Since 2019, student exchanges have been taking place between Geisenheim and the six Ukrainian partner universities – especially in Kiev, Lviv and Odessa – as part of Erasmus programs. At the moment, nine Ukrainian students are studying in Geisenheim.

Representatives from Ukrainian universities compared their situation with the sinking Titanic where the band played on until the lights went out because they are trying their very best to keep up university operations and continue teaching online but are repeatedly interrupted by missile alerts.

With the seminar, the BDO deliberately took on the difficult task of presenting both the effects on the Ukrainian and the German wine industry. The Ukrainian speakers thanked their German colleagues and the companies and institutions they represent for taking a strong stand. “On behalf of the Ukrainian wine industry, we would like to thank you very much and appreciate your attitude, especially because we know that this is not the Russian people’s war,” says Anna Gorkun on the immediate stop of business activities in Russia by many German companies and institutions.

Asked about what kind of support they need, the Ukrainian speakers said: “Investing into people!” Anyone who would like to help the Ukrainian colleagues, please accommodate refugees from the Ukrainian wine industry and help them pick up practical and theoretical skills that are required for the reconstruction process. In this context, universities, vocational schools and companies are of great importance. And in order to raise awareness of the Ukrainian wine sector across Germany, the colleagues would appreciate, for example, themed wine tastings to promote Ukrainian and German wines. In addition, the BDO has contacted the Federal Ministry in charge to set the course for selling Ukrainian wines because the only wine laboratory in Kiev approved for EU exports was destroyed.