INTERVIEW: “The weekend’s protests were the Russian peoples’, not the opposition’s” – Maxim Reznik
Western Balkans citizens legally resident in EU equal to 14% of region’s population
International Ice Hockey Federation (IIHF) has stripped Belarus of the right to hold the World Championship this year
Alexei Navalny arrested on arrival as he returns home
Russia's NorNickel adopts blockchain for supply chain management
Russia goes ahead with eSIM technology
Russia's retailer X5 Group posts 13% sales growth in 4Q20
National Bank of Ukraine retains a key policy rate at 6%, the outlook of the CPI deteriorates
Western Balkans and Ukraine urged to scrutinise coal subsidies
Oligarchs trying to derail Ukraine’s privatisation programme, warns the head of Ukraine’s State Property Fund
VISEGRAD BLOG: Central Europe's populists need a new strategy for Biden
LONG READ: The oligarch problem
OUTLOOK 2021 Lithuania
EBRD says loan to Estonia’s controversial Porto Franco project was never disbursed
Czech MPs pass protectionist food law in violation of EU rules
M&A in Central and Eastern Europe fell 16% in value in 2020, says CMS report
Hungarian vehicle makers hit by supply chain shortage
COVID-19 and Trump’s indifference helped human rights abusers in 2020
Polish industrial production continues boom in December
OUTLOOK 2021 Poland
OUTLOOK 2021 Slovakia
BRICKS & MORTAR: Rosier future beckons for CEE retailers after year of change and disruption
FDI inflows to CEE down 58% in 1H20 but rebound expected
Pandemic pushes public debt close to 80% of GDP in Albania and Montenegro
BALKAN BLOG: Superstition and resentment surround vaccination plans
Albania needs reforms for e-commerce to thrive, says World Bank
Bosnia's exports in 2020 amounted to BAM10.5bn, trade deficit to BAM6.3bn
Retailers and restaurant owners threaten protests in Bulgaria if reopening is delayed
Bulgaria's Biodit first company to IPO on new BEAM market
Bulgaria’s government considers gradual easing of COVID-related restrictions
Spring lockdown caused spike in online transactions in Croatia
ING: Growth in the Balkans: from zero to hero again?
Labour demand down 28% y/y in Croatia in 2020
Kosovo’s biggest opposition party risks being unable to run in general election
OUTLOOK 2021 Moldova
Storming parliaments: New Europe's greatest hits
World Bank revises projection for Moldova’s 2020 GDP decline to 7.2%
Montenegro’s special prosecution probes finance minister over €750mn Eurobond issue
North Macedonia plans to cut personal income tax in IT sector to zero in 2023
Romania government to pursue “ambitious” timetable for justice reforms
Private finance mobilised by development banks up 9% to $175bn in 2019
OUTLOOK 2021 Romania
BALKAN BLOG: US approach to switch from quick-fix dealmaking to experience and cooperation
Slovenia’s economic sentiment indicator up 2.2 pp m/m in January
Slovenia lost €10bn by neglecting wood industry for decades
OUTLOOK 2021 Slovenia
Slovenia’s opposition files no-confidence motion against Jansa cabinet
D’S Damat franchise deals ‘show Turkey’s hard-pressed mall operators becoming their own tenants’
Turkey’s benchmark rate held as concerns over faltering recovery come to fore
Turkish lira breaches HSBC’s stop-loss, Turkey ETF signalling outflows
CAUCASUS BLOG : What can Biden offer the Caucasus and Stans, all but forgotten about by Trump?
Armenia ‘to extend life of its 1970s Metsamor nuclear power plant after 2026’
OUTLOOK 2021 Armenia
OUTLOOK 2021 Azerbaijan
OUTLOOK 2021 Georgia
Iran’s President Khamenei menaces private citizen Trump
Iran’s technology minister indicted for failing to properly implement internet censorship
No US move to rejoin Iran nuclear deal imminent, say Biden national security nominees
TEHRAN BLOG: Will Biden bet on a quick return to the Iran nuclear deal?
Central Asia vaccination plans underwhelm, but governments look unruffled
Fears of authoritarianism as Kyrgyz populist wins landslide and backing for ‘Khanstitution’
Mongolia, island of democracy
OUTLOOK 2021 Mongolia
Mongolia's PM quits amid protests over treatment of mother with coronavirus and newborn baby
Mongolia's winter dzud set to be one of most extreme on record says Red Cross
OUTLOOK 2021 Tajikistan
OUTLOOK 2021 Turkmenistan
Turkmenistan: How the Grinch stole New Year
COMMENT: Uzbekistan is being transformed, but where are the democratic reforms?
Download the pdf version
The Moldovan village of Purcari has been at the centre of the country’s wine industry for centuries. Today, Purcari Wineries is the country’s biggest wine exporter, and is expanding into markets in Central Europe and beyond.
The Bucharest Stock Exchange (BVB)-listed company’s chief operating officer (COO) Eugen Comendant talks to bne IntelliNews about Purcari’s international expansion — and the impact of the coronavirus epidemic, climate change and the East-West standoff in the region.
Since its Bucharest debut in February 2018, when it became the first ever Moldovan company to hold an IPO, Purcari has been on an intensive modernisation and expansion drive.
The investments at Purcari, which include a new bottling line that will significantly increase capacity, are due to be completed this year. Purcari has expanded its warehouse capacity, and made further investments to improve the way wine is dispatched. The company is considering further upgrades at its other wineries, but a final decision has yet been made.
In terms of its sales geography, post-IPO the company has continued with its expansion plans in the Central and Eastern Europe (CEE) region. Its primary market — and second home market — is Romania, which accounts for around 40% of its sales, compared with around 20% in Moldova. These are followed by Poland (10%), China (7%), the Czech Republic and Slovakia (5% each) and Ukraine (3%).
“Purcari has maintained the growth that it promised investors. Our strategy states that we want to be champions in Central and Eastern Europe, and that’s where we focus most of our efforts, but at the same time we are addressing other markets in Western Europe and beyond,” says Comendant.
Further afield, not just Purcari but probably any big winery sees China as an important market, Comendant tells bne IntelliNews. “Yes, it comes with various challenges, the most recent of which is the coronavirus, but there are others such as China’s very large geography, with many regions that have to be tacked separately, differences in consumer behaviour and the way wines are sold. We need to adjust to the particularities of this market but we are already seeing success and will continue to focus on China.”
Like most Moldovan wineries, Purcari has reoriented towards Western markets since a series of Russian embargoes cut winemakers off from what was previously Moldova’s largest export destination. This was helped by Moldova’s signing of an Association Agreement and Deep and Comprehensive Free Trade Area (DCFTA) agreement with the EU in 2014.
Moldova is one of the states on the front line of the new standoff between East and West. The small country is literally divided, with its eastern flank controlled by the internationally unrecognised government in Tiraspol, backed by Moscow, while Chisinau is torn between movement towards EU integration and its history in the Russian sphere of influence.
Comendant says that while Purcari still “keeps Russia as an option, never dismiss[ing] it completely”, the company “would be careful in how we develop that market again because [we] want to be sure no risk comes with the growth of sales.”
Another geopolitical development in the region with implications for Moldovan winemakers was Russia’s annexation of the Crimea in 2014. At a stroke this saw the loss to Ukraine of half of its approximately 60,000 hectares of vineyards. Bad news for Ukraine, which saw half of its wine grape supply disappear overnight, but better news for wine producers in neighbouring countries such as Moldova. Purcari sees the potential to grow its business in Ukraine as “very high”.
A vintage year
Purcari’s 2019 results, released in February, show that its Ebitda was up 25% during the year, reaching RON68.2mn (€14mn), while revenues rose by 18% to RON199mn.
At the same time, the company projected its revenue would grow by another 16-20% year on year in 2020. Ebitda margin is predicted to remain robust at 30-32% this year (compared with 34% in 2019), while the net income margin is estimated at 20-22% (22% in 2019).
“We continued to deliver on our ambitious growth plans and look forward to sustaining that momentum in 2020 too … We have a number of exciting innovations in the pipeline and count [on seeing] the payback from them in the upcoming years,” said Victor Bostan, CEO, when the results were published.
Indeed, the company’s story has been a compelling one for investors. The 2018 IPO was more than four times oversubscribed, despite coinciding with a period of turbulence on global markets.
Its former majority shareholder, private equity investor Horizon Capital, recently reinvested. The fund originally invested in Purcari back in 2010, as a 64% shareholder via its Emerging Europe Growth Fund II (EEGF II), but it completely divested its outstanding shares by October 2019, after reducing its participation in the February 2018 IPO, earning circa 3.3 times the investment made.
However, demonstrating its belief in Purcari’s growth story, Horizon recently returned as an investor in the company, spending $7mn on a 6.8% stake in January from its new fund, EEGF III.
“Horizon believed greatly in the company and wanted to return. They managed to acquire a new 6.7% stake in Purcari so they are now back as part of the shareholder community,” says Comendant.
Purcari perfectly fits EEGF III’s investment thesis of backing export champions with highly competitive cost platforms, catering to global consumers, Horizon Capital said in its press release announcing the investment.
“[W]e believe that Purcari has significant further upside potential, hence when the opportunity arose, we moved swiftly to seize it and are privileged to return as shareholders in the company from our latest fund, EEGF III,” said Lenna Koszarny, founding partner and CEO of Horizon Capital.
A growing market
As it expands in Central Europe, Purcari is benefitting from changing tastes that have seen a shift away from beer and spirits and towards wine.
“Research we see shows that beer is on the decline in Central and Eastern Europe and wine is picking up, especially the mid to high segments in the wine industry. We do not play in the low-price segments in any of the markets because we believe this is not where the long-term return on investment should be looked for, but in the medium to the upper price segments, which are growing as a share of the total wine category,” according to Comendant. “Overall, things are looking good for the wine industry.”
Unsurprisingly, there are different tastes when it comes to wine among the countries Purcari exports to, with, broadly speaking, a preference for easy to drink dry wines in Western Europe, while wine drinkers in Central and Eastern Europe prefer semi-sweet wines and appreciate an oaky flavour.
“Dry wines do not yet have a big share of the market in Central and Eastern Europe. However, the overall trend in pretty much all the markets where we are present is that dry wines are picking up. This is a good sign for us and for the industry, because dry wines are usually in the premium, higher price segments that provide better margins to the wine producers,” he says.
Past to future
The history of winemaking in Moldova dates back millennia, and winemaking is part not just of the economy but of household traditions; most Moldovan men pride themselves on their ability to make wine, and the small country is estimated to have the largest density of vineyards of any county worldwide.
Comendant talks of the terroir that makes it possible to produce “fantastic wines” — the soils, amount of sun, the angles of the slopes. In terms of latitude, the Bostovan winery is about level with the wineries of Burgundy. Back in 1878, Purcari wine won its first international gold medal when it was selected at a blind testing in France; the judges though the wine was a Bordeaux.
Today Purcari Wineries comprises three wineries — its flagship Purcari, Bostavan in the south of Moldova and Crama Ceptura in Romania, as well as brandy producer Bardar. The group has around 1,200 hectares of vineyards in Moldova.
Climate change is clearly the big long-term issue facing any industry — like winemaking — that depends to a large degree on weather and climate. Current projections are that with no action global temperatures could rise by as much as 4.8C above pre-industrial levels by the end of the century; the optimistic forecast if current pledges are honoured is around 2.8C.
There are already worries about how this will affect Europe’s wine belt, which is expected to shift northwards, with some of the southerly areas no longer fit for grape-growing, while new areas will open up to the north.
Purcari has already observed changes in recent years. There have been no spring frosts — one of the four main risks for wine grapes alongside hail, drought and pathogens —in the last few years.
“We have to acknowledge that climate change is real,” says Comendant. However, he adds, “Moldova, being slightly on the north side of the wine producing belt will be even in a better position to produce good grapes for good wine as this belt moves upwards towards the [north] pole.”
here to continue reading this article
and 5 more for free or purchase
12 months full website access including
the bne Magazine for just $250/year.
Register to read the bne monthly magazine for
Password could contain only
and have 8-20 symbols length.
Please complete your registration by confirming your
A confirmation email has been sent to the email
address you provided.
can't be empty.
No user with
this email address.
Access recovery request has expired, or you are using
the wrong recovery token. Please, try again.
Access recover request has expired.
Please, try again.
To continue viewing our content you need to complete
the registration process.
Please look for an email that was sent to
with the subject line
"Confirmation bne IntelliNews access". This email will have
instructions on how to complete registration
process. Please check in your "Junk" folder in
case this communication was misdirected in your
If you have any questions please contact us at firstname.lastname@example.org
Sorry, but you have used all your free articles fro
this month for bne IntelliNews. Subscribe
to continue reading for only $119 per year.
Your subscription includes:
For the meantime we are also offering a free
digital weekly newspaper to subscribers to
the online package.
Click here for more subscription options,
including to the print version of our
flagship monthly magazine:
Take a trial to our premium daily news
service aimed at professional investors that
covers the 30 countries of emerging
For any other enquiries about our
products or corporate discounts please
contact us at
If you no longer wish to receive
Magazine annual print
Website & Archive
Combined package: web
access & magazine print
Take a trial to our premium daily news service
aimed at professional investors that
covers the 30 countries of emerging Europe: