THE ANALYSIS OF VITICULTURE AND WINEMAKING PROBLEMS IN UKRAINE MANAGEMENT OF THE INDUSTRY DEVELOPMENT

The article analyzes the condition, the development dynamics and the main problems of the viticulture and winemaking industry in Ukraine and in the world. The particular attention is paid to the causes of the emerging situation in the industry and the ways to overcome them. The basic mechanisms that should be used to solve all problems of the industry have been revealed. The advanced innovative directions have been suggested, which will help to improve the industry condition and to return it the status as one of the most effective branches of agro industrial complex of Ukraine.

varieties are concentrated between 30-50° north latitude and 30-40° south latitude. This location is primarily due to the agro-climatic factors, features of the relief and soil cover.
In the mid-80s of the last century, massive deforestation of vineyards in the Crimea and in the south of Ukraine was carried out during the anti-alcohol campaign. In the nineties, due to the total shortage of funds and the destruction of economic ties, the restoration of vineyards in Ukraine wasn`t practically carried out. Today, most of the vineyards are outdated and are in an unproductive age. The area of vine grape plantations in the world grows year by year, compared with 2011 an increase of 2,9% was observed in 2016, however, the area of vine grape plantations in Ukraine declined by 38,2% [2] .
The areas occupied by vineyards on the territory of Ukraine do not fully characterize the volume of the actual yield. After all, the yield of grapes depends on the agro-climatic conditions, the level of fertilizer use, the culture of agriculture, and other factors. According to experts, the landing of one hectare costs 8-15 thousand dollars. The first crop from the planted area can be obtained in 4-5 years. Despite this, there are imports of grape seedlings into Ukraine, which indicates that Ukrainian companies are working on the restoration of vineyards. Mostly red varieties of grapes are planted, as there is traditionally a high demand for red wines in the CIS countries, including Ukraine. However, experts are inclined to think that the future will belong to Ukraine`s own raw material base [3].

ISSN 2312-847X
ЕКОНОМІКА ХАРЧОВОЇ ПРОМИСЛОВОСТІ Том 9, Випуск 4/2017 Viticulture in Ukraine has recently undergone significant changes. After the annexation of the Crimea, the share of production in the households has grown significantly, which was 7,9 % in 2017 against in 2016. The vineyard area in fecundity has sharply decreased from 67,7 thousand hectares respectively in 2010 to 42,7 thousand hectares in 2016, especially in agricultural enterprises -by 42.5 and 41.9% against 2010 and 2016, respectively. On the other hand, the yield of grapes, which had always been twice as high in households, grew by 15% compared to 2016, and against 2010 by 63.7%. At the expense of productivity, the decline in production volumes after the annexation of the Crimea was significantly lower than the decrease in planting in the fruiting ageby 24.3% compared to 2016 (area -by 34.4%), while in households the gross grape harvest even increased by 1,8% while the area of vineyards decreased by 3,1% [4,5].
The gross grape harvest in 2016 was 97,8 % of the 2015 level, which was 88,8% of the 2014 level (table  1).  5] Also, since 2013 slight improvements have been noted in the vineyard: the yield in 2016 reached the level of 8,84 tons/ha (taking into account the regulatory level of expenditure, grape production is effective at the yield of not less than 5 tons/ha), the gross harvest of grapes has decreased and amounted to 377.8 thousand tons, the area of vineyards significantly decreased. Interestingly, in Europe, the yield is more than 10 tons per hectare, while the potential of some plantings can reach 35-40 tons per hectare. The dynamics of the development of viticulture and winemaking in Ukraine is as follows.
In 2010, the area of grape plantations in agricul-tural enterprises of Ukraine amounted to 87 thousand hectares and decreased year by year and amounted to 75 thousand hectares in 2014, 49 thousand hectares in 2015, and 41.5 thousand hectares in 2016. At the same time, the productivity dynamics of 1990-2016 in agricultural enterprises of Ukraine increased from 5.83 t / ha in 1990 to 8,84 t / ha in 2016. Consequently, the dynamics of the processing of grapes to wine grown as well as purchased ones (table 2) indicates a decline in the processing of grapes from 2014. As seen from the data of the dynamics of grape yield during the reporting period, they indicate an increase in the yield. According to the official data, around two hundred Ukrainian enterprises are involved in the processing of grapes, the production of wine, champagne wines and cognac in the winemaking industry. Among them we can clearly distinguish two large groups: traditional enterprises with their own vineyards, and companies of a new wave, dealing exclusively with bottling of wine. The volume of processing of vines and grown grapes to wine materials in 2016 decreased by 7.71% in comparison with 2015, in Mykolaiv -by 20.78%, in Kherson by 40.1%, but in Odessa -increased by 3.25% (table 3). 2-Data is deleted in order to ensure compliance with the requirements of the Law of Ukraine "On State Statistics" regarding the confidentiality of information.
* compiled by the authors on the basis of the sources [5,7,8] The processing volume of the purchased grapes to wine materials in 2016 compared to 2015 as a whole increased by 17,5%, in Mykolaiv -increased by 71,4%, in Odessa -by 2.6% (table 4). 157871,3 211386,6 1 -Not including the temporarily occupied territory of the AR of Crimea and the city of Sevastopol. 2 -Data is deleted in order to ensure compliance with the requirements of the Law of Ukraine "On State Statistics" regarding the confidentiality of information.
* compiled by the authors on the basis of the sources [5,8] In the wine industry, the production of grapes is concentrated in large farms with more than 500 hectares of vineyards. In 2015 32 such farms produced almost 60% of all grapes. Without the Crimea, the share of such farms has changed insignificantly and amounted to 57.1%. It is the large farms with an average vineyard area of 797 hectares that have the best indices: in 2015 their yield was 101 c / ha against 86 c / ha for all agricultural enterprises, the profit per 1 hectare of vineyards -14.7 thousand UAH (8.8 thousand UAH), the level of profitability of grape production -136% (80%) [9].
The processing of grapes to the wine material by grade is presented in Growth showed Bastardo Magaratsky's grape variety at 51%. Aligote and Chardonnay remain the most common types of grapes for processing in 2016 respectively 12 and 10% and Cabernet Sauvignon 9% in the total amount of the processed grapes.
The such varieties of grapes, as aligote, chardone, white musk, Cabernet Sauvignon have mostly been processed to wine material in comparison to other varieties. Such varieties of grapes as chardone, rysling, foam (white, black, gray) have shown significant growth for the last 3 years.
Ukraine produces 10.1 kg of grapes per person (2016), but the population consumes within 3 kg, which is 40% to scientifically grounded consumption rates (6-8 kg). The level of consumption of table grapes by half is ensured by import, which in 2012-2014 was 54-63.1 thousand tons, and in 2015 it decreased to 39.3 thousand tons.

ISSN 2312-847X
ЕКОНОМІКА ХАРЧОВОЇ ПРОМИСЛОВОСТІ Том 9, Випуск 4/2017 The largest export of table grapes was in 2013 and made 140 tons, that is, 0.02% of the total gross tax, and in 2014 -decreased to 6 tons. At the same time, the price of exported grapes is 2-3 times higher than the domestic one: in 2014 it amounted to 12.1 thousand UAH per ton against 4,0 thousand UAH, which indicates a significant export attractiveness. [10].
Compared to 2013, the wine industry has reduced its profits by 3.3 times, indicating that there are significant problems in vine growing and winemaking. However, with the reduction of the import of grape wine to Ukraine (from 50.8 thousand tons in 2013 to 40.1 thousand tons in 2014), domestic winemakers will have more favorable conditions for the sale of their own products, to replace the lost volumes of supplies to the Russian Federation (1.6 times against 2013).
The development of viticulture and winemaking in the near future will be determined by the general economic situation in the state and the ability of the industry to respond promptly to the urgent challenges of the present. First of all, this concerns the reduction of gross grape harvest in 2016. On the other hand, the industry has practically lost significant amounts of state support through the abandonment of fees for the development of viticulture, horticulture and hop-growing (in 2010 almost 413 million UAH was paid in support of these industries, and in 2014 the least -43,9 million UAH). The Government's decision on a special regime for the value-added tax on agricultural producers since January 2016 could lead to a significant reduction in the costs for the development of viticulture, reduced yields, and even reduction of their areas.
The greatest threat to the industry is negative macroeconomic trends, especially the decrease in the volume of solvent demand of the population. Both grapes and wine are not related to essential food, therefore it is likely that citizens can reduce the consumption of winemaking products.
Among other challenges, further reduction of exports of wine products to Russia will have a negative impact because of the military conflict and the growth of tension in the relationship. The Russian market consumed 84.3% of the total export of grape wine from Ukraine in 2014, in 2013 it reached 89.4%, and its loss is a serious challenge for the industry.
In addition, Ukrainian winegrowers and winemakers also have to prove the competitiveness of their products in the context of the EU-Ukraine Association establishment, the growth of competition on the world market, the continuation of economy globalization, etc. This requires new technologies, high-yielding varieties, productivity and product quality, increase diversification of production and sales markets, innovation development, creation and promotion of new brands of domestic winemaking products to foreign markets and much more, and without it is impossible to develop the industry successfully.
Traditionally, the production of wine remains a rather cost-effective and attractive industry for business. The dynamics of the grape wines production in the world over the past 50 years has generally been quite stable. In 2016 the world's production of wines increased by 6.4%, while wine consumption by 0.06%. Production of wine in Ukraine for the same period decreased by 11.1%, and consumption decreased by 18.10%. We can conclude that world wine production and consumption is stable, but in Ukraine production and consumption of wine is decreasing [11].
In recent years, the wine industry has been in a difficult economic situation. The wines production in Ukraine is falling dramatically, namely in 2014 production decreased by 43% in relation to 2013, in 2015 -by 24% till 2014, and in 2016 -by 8.6% till 2015. During four years, because of the rapid drop in production, the total production of wine has reached its absolute minimum in recent years.

ISSN 2312-847X
ЕКОНОМІКА ХАРЧОВОЇ ПРОМИСЛОВОСТІ Том 9, Випуск 4/2017 Growth in prices for grapes is ahead of rising prices for winemaking products. This is due to a lack of highquality raw materials, outdated fleet of machinery and process equipment, but researchers see the main reason in the absence of solvent demand of the population in its low purchasing power. Conclusions and prospects of the further investigations. Basing on the analysis, it can be concluded that to date there is an urgent need to develop and implement measures concerning the problems that hinder the development of viticulture. Among the priority areas of development of the industry are the following: -taking measures to expand the area of vineyards; -raising the level of care for vineyards; -reduction of the viability of the vineyards; -optimization of the structure of plantations (increase of the share of high-quality varieties for the production of champagne wines); -application of progressive techniques of agrotechnics that will ensure the efficiency of grape production; -legislative regulation of land relations, development of legal registration of the right to lease land under vineyards; -attraction of additional investments on increase of areas of grape plantations.
Taking into account all existing problems in wine growing and winemaking, the Ministry of Agrarian Policy and Food of Ukraine and the Ukrainian Academy 1) measures to increase the capacity of the market of grapes and products of its processing, taking into account the needs of the population, its purchasing power and the maximum export possibilities; 2) extension of the term of the Law of Ukraine "On the fee for the development of viticulture, horticulture and hop-growing" until 2025; 3) the gradual reduction of the import of wine materials and the pouring of wine simultaneously with the development of the domestic raw material base on the basis of the introduction of innovative and intensive technologies of grape production, which ensure its efficiency by increasing the yield of grape plantations and improving the quality of products; 4) improvement of the mechanism of providing state support to viticulture and ensuring the development of winemaking, taking into account the requirements of the WTO; 5) implementation of measures to ensure the development of the market infrastructure for wine products, diversification of sales channels and ensuring product quality, regulation of supply and demand, protection of the market from imported wine products and raw materials of low quality; 6) innovation and investment strengthening of the material and technical base of the grape-and-winemaking industry, introduction of environmentally safe, resource-saving and energy-saving technologies; 7) improvement of insurance and tax policy in the field of grape and wine production; 8) increasing of the role of science and education in accelerating of innovation processes in the winemaking industry; 9) preservation of labor resources, formation of an effective system of providing the field with personnel by training specialists on the target and attracting young specialists for work in vine growing and winemaking; 10) improvement of the system of management of innovative development in the grapes and winemaking industry; 11) development of sectorial normative and technological documentation, which complies with the provisions and requirements of the European Community at the expense of the funds provided for scientific research.
In general, to solve the urgent problems of innovative development of the wine industry, the activation of the wine market, the creation of innovative winemaking products it is necessary: -to improve the quality of domestic wines and to establish restrictions on the import of raw materials; -to take measures to detect and eliminate counterfeit products from the wine market; -to increase the volume of investments in the innovative updating of the material and technical base of the winemaking industry; -to develop a number of effective measures to increase the competitiveness of Ukrainian brands of innovative wine products on the world market; -to increase the culture of wine consumption in Ukraine.
The last point, which is aimed at forming the culture of wine consumption, is realized with the use of marketing measures (through the establishment of wine culture centers, opening of specialized wine shops, development of wine tourism, organization of exhibitions, tasting).
We can conclude that the world's production and consumption of wine has a stable demand, but in Ukraine, not only wine production and consumption, but also the area of grapevines decreases. Domestic viticulture has significantly reduced production volumes under the influence of recent political processes. Its development is increasingly dependent on macroeconomic processes and state policy to support the industry, as well as on the peculiarities of the household sector, which produces more than 40% of production.