Title: The impact of foreign direct investment on the agribusiness of transition countries: the example of the Armenian wine business

Authors: Jon Henrich Hanf; Victoria Marquardt; Vardan Urutyan; Aram Babayan

Addresses: Geisenheim University, Von-Lade-Str. 1, 65366 Geisenheim, Germany ' Geisenheim University, Von-Lade-Str. 1, 65366 Geisenheim, Germany ' Department of Agricultural Economics, Texas A&M University, 74 Teryan St. Yerevan 0009, Armenia, USA ' Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, Bagramyan Str. 4/1, Yerevan, Republik Armenia

Abstract: For over 7,000 years wine is produced in Armenia; hence as new discoveries show Armenia can be considered as the cradle of wine production. Despite of or because of this tradition nowadays Armenia is more recognised for its prime brandy production than for its wine. Starting to operate a brandy business Pernod-Richard started to introduce numerous innovations. They introduced new processing techniques but also they started a new system to procure grapes. Today, years after the market entry of this foreign company one has to notice that the whole brandy business has changed. As we have observed in our field study this development is not only limited to the brandy production but also is valid for the wine business. Hence, the aim of our article is to describe the development of the Armenian wine and brandy business and to discuss in this context the influence that foreign investors have taken in this development. We further try to give an outlook on the future role that foreign investors and their ideas will have for the Armenian wine and brandy business.

Keywords: agribusiness; transition economies; Armenia; wine industry; agri-food business; foreign direct investment; FDI; vertical coordination; brandy production.

DOI: 10.1504/IJBG.2016.076813

International Journal of Business and Globalisation, 2016 Vol.16 No.4, pp.423 - 447

Received: 08 Jul 2014
Accepted: 06 Apr 2015
Published online: 01 Jun 2016 *

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