Bulgarian winemakers look upmarket to fight crisis

24th March 2009, Comments 0 comments

Face with declining sales from the Russian market, Bulgarian winemakers may move towards making better quality and more expensive wine for customers in western Europe.

Plovdiv – Bulgarian winemakers are hoping that a move upmarket will win them new customers in Europe and as experts warn that sales to Russia, traditionally their biggest market, are in decline.

In communist times, Bulgaria used to export some five million hectolitres of wine each year to the Soviet Union, or nearly all of the wine it produced.

Since then, Bulgaria's wine production has shrunk to 1.38 million hectolitres annually, of which it exports as much as 80 percent.

Russia is still by far the biggest customer, accounting for 60 percent of all wine sales.

But with Russia feeling the pinch from the global economic and financial crisis and increased competition in the low-price wine segment, Bulgaria's wine sales to Russia fell by 30 percent last year, said Radoslav Radev, executive director of the Bulgarian winemaker Vinimpex, which is owned by French group Belvedere.

Radev warned against "the almost total dependence of Bulgarian exports on a single export partner".

In view of the crisis, Bulgaria's winemaking industry should take the bull by the horns, he argued.

Faced with falling sales, it would be "healthy" for winemakers "to produce less, but better-quality and better-priced wine," he believed.

Bulgaria's agriculture minister, Valery Tsvetanov, made the same argument at the opening of the annual Vinaria wine fair in the southern city of Plovdiv this week.

"We have to produce less in terms of quantity and focus on quality. We should try to offer mainly medium and high-quality wines," he said.

Indeed, if Bulgaria continued to sell cheaper and mostly lower-quality wines, it risked "pushing away Russian customers who would turn to other suppliers," the minister argued.

Margarit Todoroff, executive director of the winery Domaine Boyar, estimated that western markets, such as Britain, Belgium, the Netherlands, Germany and Canada account for less than 15 percent of Bulgaria's wine exports.

But that might change in the current global crisis, with western European consumers possibly looking for significantly cheaper wines from eastern Europe, the expert argued.

"The situation in Europe resembles that in the 1990s. During the economic downturn back then (which was still far from what we see now), Bulgaria was able to make a breakthrough in the West," and in Britain in particular, Todoroff said.

Bulgaria stands a good chance of finding its niche on the European market, especially "with (wines from) indigenous grape varieties such as Mavrud (red) and Dimyat (white)," said French wine consultant Guy Labeyrie.

European consumers were generally open to wines from all over the world, if they offered good quality and were priced between EUR 5 and 7 per bottle, Labeyrie said.

During communist times, the state had the monopoly on winemaking and there were huge "wine factories" that focussed largely on quantity.

Today's winemakers must get away from that mind-set, Labeyrie said.

Bulgaria's whole agricultural sector was plunged in grave crisis in the 1990s when the communist-era cooperative farms were dissolved, the land was parcelled out and returned to its original owners, who lacked both skills and equipment to work it.

State-owned wine cellars, which were all privatised by 1998, still have problems ensuring a stable quality of their wine, experts say.

Ageing vineyards are another problem and French vine breeders have already found their niche in Bulgaria by offering young vine sprouts to producers here.

"Good grapes make good wine," Labeyrie noted.

He is also currently offering expert help to Bulgarian wine growers by taking some 30 of them to gain experience from working in French vineyards.

AFP / Expatica

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