MOSCOW/TBILISI Jan 28 Georgia's salty tasting
mineral water, Borjomi, expected to be bought by billionaire
Mikhail Fridman's Alfa Group, could return to Russian tables
soon amid increasing signs of an improvement in relations.
A deal to buy a controlling stake of IDS Borjomi has closed,
Russian state news agency RIA Novosti reported on Monday. That
followed a statement from Alfa in December that it had agreed to
buy a stake in the firm from a fund controlled by the heirs of
late Georgian businessman Badri Patarkatsishvili. Russia's
Kommersant daily reported the deal was worth $300 million.
"If Russian businesses are saying we want to invest in
Georgia, it potentially would reopen the Russian market for
Georgian exports," said Charles Robertson, economist at
"Georgian products were always desired in Russia, whether
the wine, brandy or water."
A Georgian delegation is expected to visit Moscow in
February to discuss restoring trade with Russia, once its
largest export market.
Borjomi became a symbolic victim of tensions after Georgia's
'rose revolution' of 2003 led by pro-Western President Mikheil
Saakashvili, which led to trade frictions and outright conflict
when the two sides fought a five-day war in 2008.
Russia banned imports of Borjomi in 2006, citing health and
safety reasons. Before the ban Borjomi's share of the Russian
mineral water market was 13 percent.
Last October's election victory in Georgia by Prime Minister
Bidzina Ivanishvili, a billionaire who made his fortune in
Russia, has raised hopes of a thaw.
Ivanishvili, who built a Russian banking-to-retail empire
worth $6.4 billion before entering politics in his native
Georgia, is promising a more pro-business environment and to
work effectively with Moscow.
The International Monetary Fund said this month it expects
Georgia's economy could grow 6 percent this year, citing the
possibility of increased trade with Russia.
The head of the Georgian Orthodox Church, Patriarch Ilia II,
visited Moscow and met with Russian President Vladimir Putin
last week, while Ivanishvili met Prime Minister Dmitry Medvedev
on the fringes of the World Economic Forum in the Swiss ski
resort of Davos.
All sides were tight-lipped over the Borjomi deal,
indicating just how sensitive the diplomatic situation remains.
"To be super-friendly with Russia is still not a vote-winner
in Georgia," Robertson said.
(Reporting By Megan Davies and Margarita Antidze; editing by
Douglas Busvine and Louise Heavens)