Government of Armenia approves measure to help winemaking and brandy producing companies
13.08.2020,
14:29
The government of Armenia has approved today a new program designed to help wine making and brandy producing companies overcome the socio-economic consequences of the coronavirus crisis.
YEREVAN, August 13. /ARKA/. The government of Armenia has approved today a new program designed to help wine-making and brandy producing companies overcome the socio-economic consequences of the coronavirus crisis.
It is the 24th government-designed measure to help citizens and companies navigate through the pandemic. The latest one is expected also to facilitate grape procurement.
Economy minister Tigran Khachatryan said the spread of coronavirus has directly affected wine and brandy companies across the globe, slashing the demand and sales respectively. According to officially confirmed statistics, wine and brandy sales have plunged by more than 30%, according to Tigran Khachatryan said.
As a result, financial flows of companies dropped making financial institutions reluctant to lend these companies. Cumulatively, this has created a liquidity shortage amid the upcoming grape purchasing season, while harvests are expected to be strong compared to previous years.
Also, according to the minister, some companies are faced with the need to re-equip production, since the available opportunities are insufficient for storing products in anticipation of upcoming purchase.
Khachatryan said these companies will be offered subsidized lending with interests to be fully compensated by the government. The lending will be provided for a maximum of 24 months with a 3-6 month grace period and the maximum amount of 3 billion drams.
“There is a legislative requirement for producers and exporters of brandy spirit that after exceeding a certain level of sales additional duties of 100 drams and 25 drams are imposed on the sale of a liter of alcohol and finished products, respectively. As part of financial support, the government will offer compensation or assistance in the same amount,” the minister said.
Also, within the framework of the 24th program, companies that were provided loans in 2019 with a maturity in September-October 2020 will be allowed to postpone the repayment of the principal amount until December.
For companies that will be engaged in re-equipment of their production and other facilities, including their warehouses, the maximum lease amount will be raised from 450 million drams to 1 billion drams. This offer applies not only to wine companies, but also to all enterprises involved in the processing of agricultural products. -0-
It is the 24th government-designed measure to help citizens and companies navigate through the pandemic. The latest one is expected also to facilitate grape procurement.
Economy minister Tigran Khachatryan said the spread of coronavirus has directly affected wine and brandy companies across the globe, slashing the demand and sales respectively. According to officially confirmed statistics, wine and brandy sales have plunged by more than 30%, according to Tigran Khachatryan said.
As a result, financial flows of companies dropped making financial institutions reluctant to lend these companies. Cumulatively, this has created a liquidity shortage amid the upcoming grape purchasing season, while harvests are expected to be strong compared to previous years.
Also, according to the minister, some companies are faced with the need to re-equip production, since the available opportunities are insufficient for storing products in anticipation of upcoming purchase.
Khachatryan said these companies will be offered subsidized lending with interests to be fully compensated by the government. The lending will be provided for a maximum of 24 months with a 3-6 month grace period and the maximum amount of 3 billion drams.
“There is a legislative requirement for producers and exporters of brandy spirit that after exceeding a certain level of sales additional duties of 100 drams and 25 drams are imposed on the sale of a liter of alcohol and finished products, respectively. As part of financial support, the government will offer compensation or assistance in the same amount,” the minister said.
Also, within the framework of the 24th program, companies that were provided loans in 2019 with a maturity in September-October 2020 will be allowed to postpone the repayment of the principal amount until December.
For companies that will be engaged in re-equipment of their production and other facilities, including their warehouses, the maximum lease amount will be raised from 450 million drams to 1 billion drams. This offer applies not only to wine companies, but also to all enterprises involved in the processing of agricultural products. -0-
