Russia is testing its leverage on Georgia’s economy

Two men work on grape clusters during harvest in the village of Vakiri, some 120 kilometers east of Tbilisi, Georgia, 19 September 2021.
© EPA/ZURAB KURTSIKIDZE   |   Two men work on grape clusters during harvest in the village of Vakiri, some 120 kilometers east of Tbilisi, Georgia, 19 September 2021.

On October 9, 2026, Russia’s consumer protection watchdog, Rospotrebnadzor, announced a temporary ban on the import and circulation in Russia of products from several Georgian companies, mostly wine and beer producers, but also the local Coca Cola franchise. This is not the type of decision to be taken lightly. Russia is a major client for Georgian beverages. During the first three quarters of 2026, nearly half of Georgia’s beverages exports, which were worth almost 600 million USD, went to Russia. When it comes to wine, that percentage is even higher: in the first nine months of 2026, Georgia exported $188.7 million worth of wine, of which 63,4%, worth $119.7, went to Russia.

The Russian side has not provided detailed public explanations of what specific violations were identified at each company. The document also does not specify how long the restrictions will remain in place. Moscow’s official position is that the restrictions are related to sanitary and technical requirements. However, some Georgian politicians and experts have linked the move to political pressure from Russia.

Political analyst Gia Khukhashvili sees the developments as an example of Russian economic coercion.

“This is a brazen Russian method — the ‘sledgehammer’ approach,” he says, adding that dependence on the Russian market creates a permanent risk of pressure for Georgian businesses. “The problem is that our business — constantly focused on short-term gains and concerned with how to please the authorities — has still failed to realize that you cannot tie yourself to the market of an enemy state. Everything possible should have been done to diversify these risks.”

On October 22, Russian Foreign Ministry spokesperson Maria Zakharova said that the restrictions had “no political basis” and that attempts to present them as a political issue amounted to speculation. According to Zakharova, violations had been identified at only a few enterprises, while dozens of other Georgian companies continue to operate on the Russian market.

However, the decision came against a broader political backdrop. Back in June, Mamuka Pipia, leader of the pro-Russian Solidarity for Peace party, said that Russia could restrict access to its market for more than 40 Georgian companies that allegedly finance “anti-Russian activities” and “Russophobia.” At the time, he did not name the companies themselves or the Russian agency that had allegedly compiled such a list. After the current restrictions were introduced, Pipia said they were only the “first wave” and that two or three more could follow. These claims have not been confirmed by Russian state authorities and should therefore be treated as a political statement rather than as a plan officially announced by Moscow.

Not their first ballet: Russia had targeted Georgian goods before

The Rospotrebnadzor decision is reminiscent of Russia’s 2006 embargo, when Moscow banned imports of Georgian wine, mineral water, and agricultural products. The impact on the Georgian economy was much more severe at the time, as Russia was then the main market for Georgian goods.

The impact on the wine industry was enormous. According to the FAO, after the ban was introduced, Georgia accumulated stocks of around 40 million unsold bottles of wine, while producers and grape growers faced falling demand and declining grape prices.

However, the Russian embargo also became one of the factors that forced Georgian producers to look for alternative markets. Over time, this diversification also changed the wine industry itself. Producers had to adapt to new markets, invest in quality and find ways to position Georgian wine outside the post-Soviet space.

It would be inaccurate to say that the European market replaced Russia overnight. But the underlying model changed: Georgian producers could no longer rely on a single market as their main source of export revenue. Ultimately, the Russian embargo became a painful reminder for Georgian businesses that economic dependence can turn into vulnerability.

The current situation differs from 2006 primarily in the scale and structure of Georgia’s foreign trade.

Russia remains one of Georgia’s largest trading partners, but it is neither the only nor the dominant market for the economy as a whole. In January–September 2026, Georgia’s total exports increased by 19.6% year-on-year, reaching $6.15 billion. Russia ranked third among export destinations, with $566.7 million, behind Kyrgyzstan and China. As for exports on the common EU market, according to the National Statistics Office, some 10% of Georgia’s total exports are going there, just a bit lower than exports towards the country’s top 3 foreign trade partners.

A tool of Russian political pressure

Considering Georgia’s diversification of its exports, Moscow’s latest decision is interesting not only as another trade dispute, but also as a test of how effective Russia’s economic leverage over Georgia remains.

According to Tbilvino CEO Zurab Margvelashvili, his company sells its products in around 30 countries and therefore does not consider its dependence on Russia critical. He notes that Tbilvino also operates in markets with stricter quality standards, while the company has not received detailed information from the Russian side about the specific violations allegedly identified in its products.

Other producers are in a less comfortable position. Even if Russia is not their only market, its size and geographic proximity make it attractive to Georgian exporters. According to Giorgi Piradashvili, co-owner of Chateau Mere Wines, the Russian market remains one of Moscow’s main instruments of economic influence. He noted that his own company sells relatively small volumes in Russia — 5,000 to 10,000 bottles a year — but that a closure of the market could have much more serious consequences for larger producers.

The current restrictions also raise questions about the economic strategy of the ruling Georgian Dream party. In recent years, the government has consistently justified maintaining economic ties with Russia on pragmatic grounds. After Russia launched its full-scale war against Ukraine, Tbilisi declined to join international sanctions against Moscow, arguing that it did not want to harm the Georgian economy. Government representatives repeatedly said that Georgian businesses should be able to operate in markets where they can make a profit.

Following Moscow’s latest decision, Shalva Papuashvili again stressed that economic risks exist in all markets, including the EU, and that Georgia should not pursue a policy of escalation in its relations with Russia.

Critics of this policy, however, ask a different question: what additional economic or political security has Georgia gained by maintaining dependence on the Russian market if Moscow can still unilaterally close that market to specific companies?

The question is particularly relevant against the backdrop of other demands from Moscow. Alongside the trade restrictions, Russia has again called on Tbilisi to provide guarantees of non-use of force against Abkhazia and the Tskhinvali region and to demarcate what Moscow refers to as state borders.

Opposition politician Teona Akubardia links the trade restrictions to Moscow’s broader policy in the South Caucasus. In her view, the restrictions are a tool of political pressure being used in parallel with Russia’s demand that Tbilisi sign a non-use-of-force agreement.

Will the new sanctions push Georgian businesses once again away from Russia?

The history of 2006 shows that Russian trade restrictions can have consequences that go far beyond the immediate damage to exporters. At the time, Moscow was counting on Georgian businesses’ dependence on the Russian market to make the embargo painful. In the short term, that is exactly what happened. But over the longer term, Georgian companies began looking for other markets — and this gradually reduced Russian influence over certain sectors.

However, after the embargo was lifted in 2013, the process was reversed. The Russian market once again became attractive to Georgian producers, and dependence on it gradually returned. Today this is particularly visible in the wine industry: more than 60% of the value of Georgian wine exports still goes to Russia.

This is why the current restrictions could prove significant even without causing major economic damage. They once again remind Georgian producers of what became clear after the 2006 embargo: the largest market is not necessarily the safest market.

It is too early to say whether the current decision will trigger a new wave of diversification. If the restrictions remain targeted and temporary, most companies will probably continue working with Russian buyers. If Moscow expands the list of restrictions, as some Georgian and Russian sources have claimed, businesses will have to reassess the cost of their dependence.

And then the main question will no longer be whether Russia can use trade as an instrument of pressure. It still can. The question is how effective that instrument remains in Georgia, which already has alternative markets, and whether its repeated use will ultimately push Georgian businesses even further away from dependence on Russia.

This is where the current crisis brings Georgia back to the lesson of 2006. Russia’s embargo then forced businesses to look for alternatives. After trade was restored, some of that dependence returned. Now Moscow is once again testing how strong its economic leverage remains — and Georgian businesses are being given another opportunity to decide whether they want to rely on it.

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