Founded under the tsars, the KVINT brandy distillery has survived three wars, weathered the upheavals of being under Communist rule and made it through the collapse of the Soviet Union.
Today, the wine and spirit producer operates from Transdniestr, a country that does not exist in the eyes of the world, but whose economy is facing a though choice between Russia and the EU.
The pro-Russian breakaway region, a narrow strip of land wedged between Ukraine and the Dniestr River, proclaimed its independence from Moldova in 1990. Although it is not recognized by any state, it has its own parliament and currency and exists in a state of de facto independence since the 1992 War of Transdniestr.
Warning: Excessive consumption of alcohol can damage your health
Photo: AFP
“KVINT was founded in 1897 and of course, it lived through all the ups and downs of history in this region,” Anna Kozyrina, the company’s public relations manager, told reporters in a small museum in Tiraspol, the de facto capital of Transdniestr.
The famous spirit made by KVINT — known to Russians, Ukrainians and Moldovans as cognac — has made it to the Vatican and even into space, thanks to Russian cosmonauts.
Yet the distillery was hit hard by former Soviet leader Mikhail Gorbachev’s anti-drinking campaign in 1986, which saw part of its vineyards uprooted and forced it to produce fruit juices instead of spirits for a year.
Since then, KVINT has replanted more than 1,500 hectares of vineyards and now employs 1,500 people — a big step up from the 600 workers it had before the fall of the Soviet Union — to produce the 20 million bottles of booze a year that generate it revenues of US$50 million. KVINT’s top-end Divine brandies are exported to Italy and China, although Russia, Moldova and Ukraine remain its main markets.
Yet as the crisis between Russia and the West over Moscow’s incursion into Ukraine deepens, KVINT and the key players in the Transdniestrian economy face two nagging challenges: The first is a potential erosion of trade with Kiev, but the main bone of contention lies with an association agreement Moldova is due to sign next month with the EU, a move that the pro-Kremlin authorities in Tiraspol fiercely oppose.
“What is happening in [the Moldovan capital of] Chisinau, these moves toward the European Union are counterproductive,” Transdniestrian President Yevgeny Shevchuk told reporters.
He wants the enclave to join the Kremlin-led Customs Union, a nascent alliance at the heart of Russian President Vladimir Putin’s bid to extend Moscow’s influence.
“Of course, the authorities in Tiraspol have to show that the EU is not a necessary partner for the economy, rather Russia. However, trade statistics show the majority of exports go to Europe,” a member of the EU Border Assistance Mission to Ukraine and Moldova said.
The 28-country bloc absorbs up to three-quarters of the total volume of goods produced in the enclave, compared with the 15 to 20 percent of exports sent to Russia, according to data provided by the mission.
Many European high-street brands have their clothes and shoes produced in Transdniestr due to the lower labor costs.
Local textile giant SA Tirotex exports about 70 percent of its production, mainly to Europe.
“Transdniestr has a lot to gain from an association agreement with the EU,” said Pirkka Tapiola, who heads the EU Delegation to the Republic of Moldova.
Accusations that the deal — which includes a free-trade pact — would block access to markets in the East “are a myth,” he said, adding that “the agreement is not limiting Moldova’s sovereignty to sign trade agreements” with others, a reference to Russia.
Yet the Kremlin’s influence in Moldova and Transdniestr extends beyond being an important export market, since both are heavily dependent on Russian gas. In addition, tens of thousands of both area’s residents work in Russia to escape poverty.
With the tensions in Ukraine rising, the gap between the pro-European government in Chisinau and the pro-Russian separatists in Tiraspol has widened.
At the moment, firms in Transdniestr are, like Moldovan companies, exempt from EU custom duties even though Tiraspol imposes duties on EU imports, but if the new trade agreement enters in force, goods from the enclave could face heavier duties.
“The risk for Transdniestr — if they refuse any kind of compromise with Moldova and the EU — is isolation,” a source said.
Yet for ordinary citizens like vegetable seller Yelena Rotari, there are fears of what it could mean for their livelihoods.
“We were told that with the EU, we will not be able to sell our products directly anymore, we will have to sell them to supermarkets for a much lower price,” she said.
CAUTIOUS RECOVERY: While the manufacturing sector returned to growth amid the US-China trade truce, firms remain wary as uncertainty clouds the outlook, the CIER said The local manufacturing sector returned to expansion last month, as the official purchasing managers’ index (PMI) rose 2.1 points to 51.0, driven by a temporary easing in US-China trade tensions, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The PMI gauges the health of the manufacturing industry, with readings above 50 indicating expansion and those below 50 signaling contraction. “Firms are not as pessimistic as they were in April, but they remain far from optimistic,” CIER president Lien Hsien-ming (連賢明) said at a news conference. The full impact of US tariff decisions is unlikely to become clear until later this month
With an approval rating of just two percent, Peruvian President Dina Boluarte might be the world’s most unpopular leader, according to pollsters. Protests greeted her rise to power 29 months ago, and have marked her entire term — joined by assorted scandals, investigations, controversies and a surge in gang violence. The 63-year-old is the target of a dozen probes, including for her alleged failure to declare gifts of luxury jewels and watches, a scandal inevitably dubbed “Rolexgate.” She is also under the microscope for a two-week undeclared absence for nose surgery — which she insists was medical, not cosmetic — and is
GROWING CONCERN: Some senior Trump administration officials opposed the UAE expansion over fears that another TSMC project could jeopardize its US investment Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is evaluating building an advanced production facility in the United Arab Emirates (UAE) and has discussed the possibility with officials in US President Donald Trump’s administration, people familiar with the matter said, in a potentially major bet on the Middle East that would only come to fruition with Washington’s approval. The company has had multiple meetings in the past few months with US Special Envoy to the Middle East Steve Witkoff and officials from MGX, an influential investment vehicle overseen by the UAE president’s brother, the people said. The conversations are a continuation of talks that
CHIP DUTIES: TSMC said it voiced its concerns to Washington about tariffs, telling the US commerce department that it wants ‘fair treatment’ to protect its competitiveness Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reiterated robust business prospects for this year as strong artificial intelligence (AI) chip demand from Nvidia Corp and other customers would absorb the impacts of US tariffs. “The impact of tariffs would be indirect, as the custom tax is the importers’ responsibility, not the exporters,” TSMC chairman and chief executive officer C.C. Wei (魏哲家) said at the chipmaker’s annual shareholders’ meeting in Hsinchu City. TSMC’s business could be affected if people become reluctant to buy electronics due to inflated prices, Wei said. In addition, the chipmaker has voiced its concern to the US Department of Commerce