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A new era for Cyprus by Caroline Gilby MW

Published:  23 July, 2008

The Cyprus wine industry has reached a turning point. On the
one hand, EU membership has seen the loss of substantial subsidies for wine exports. This brought to an end the shipments of vast quantities of low-quality bulk wine that had been destined for Sherry-type fortified wines, gluhwein' and other mass markets in the EU. On the other hand, in 2005, Italian archaeologists found evidence that winemaking on the island dates back to 3,500 bc, possibly the longest winemaking history in Europe. Cyprus also claims one of the oldest images of wine drinkers in the 3rd century ad mosaics at Paphos. And Cypriots are proud of their sweet, fortified wine Commandaria, which is the oldest named' wine in the world, dating back to the 12th century and still made in the traditional manner from sun-dried grapes.

The reality of viticulture in Cyprus today is that production has fallen from more than 300,000 tonnes in the 1980s to just under 60,000 tonnes in 2005, with just 31,000 tonnes being vinified for wine (Figure 1). The big four wineries (Loel, SODAP, Keo and Etko) that control the majority of production (crushing 24,521 tonnes between them) have cut their grape purchases substantially, not wanting to buy fruit for which there is no market. The result was widespread growers' protests in 2004, with tractors blocking roads, though a small harvest in 2005 meant further protests were avoided. In effect, the government subsidies for wine exports had performed a significant social role in providing rural income and employment in increasingly empty mountain villages. The country has around 14,000 hectares (ha) under wine grapes (Table 1), but around 17,500 growers, so the picture is one of tiny, fragmented plots, managed erratically by part-timers. In addition, this is expensive mountain viticulture with no economies of scale, and temperatures at harvest can be searing, requiring refrigerated lorries for any decent quality.

The alternative is to move the wineries away from the coastal heat at Limassol and Paphos into the mountains closer to the vines. The first moves in this direction were (and still are) small boutique-type operations: Etko set up its Olympus winery near Omodos in 1992 and Keo invested in Mallia estate in 1994. Both are upgrading their production and Etko has just taken on Angela Muir and her Cellarworld team to work at Olympus, which will be organic from 2006. However, grower-owned SODAP has become the first big winery to move all its production up into the hills. Its high-tech, stainless-steel-equipped Kamanterena winery at Stroumbi opened in time for 2004 harvest. Bottle Green's Paul Nelson is making Island Vines here for the Co-op, and a tasting of 2005 wines showed some very promising, bright, clean, modern wines. SODAP is planning further wineries at Pakhna and Kathikas to produce appellation wines, now its site at Paphos has been sold to release funds.

The restructuring challenge

Yiannakis Georgiades (director of the Wine Products Council) points out: 'It's a difficult period for the sector, partly due to accession but fundamentally due to long periods of state intervention. The state has now taken the opportunity for major reforms at all levels, for restructuring, uprooting and incentivising better varieties.' In 2005, around 22 million were spent on abandoning vineyards, with another 2.7 million on restructuring (Figure 2). At the same time, a new Appellation of Origin scheme (Figure 3) should be in place by 2007 - the regions have already been identified but wineries will be forced to invest in production facilities within each region, if they wish to qualify.

Much as wineries see the benefit of owning vineyards, it is not proving easy to achieve. Many growers are reluctant to sell. According to Akis Zambartas, former head of Keo and now consultant to the wine industry: 'It's very difficult to consolidate there's a big sense of ownership.' Land values are surprisingly high; in a good area, prices can reach 100,000 to 200,000 Cyprus pounds (CYP) (175,000-350,000) per hectare, partly because there is little restriction on building development. Long-term contracts seem to be the best way forward at present, rather than the current pattern of spot purchases, and are a route that Georgiades is keen to encourage. This should give growers some stability to make it worthwhile tending their vines and spraying, while wineries would be able to work on improving quality. However, this would require a major change in attitude from growers who don't get involved in the end product and treat delivering their grapes 'as being relieved of a burden', according to Theodoros Fikardos (owner of Fikardos winery). Even the new generation of smaller boutique wineries generally has to rely on purchased grapes, although as Nicos Nicolaides (chairman of Bacchus, the regional wineries association) highlights, it is easier for the smaller guys to build relationships with the same growers: 'You need to speak their language and understand their mentality,' he says.

British abroad

Cyprus has a population of around 800,000, vastly outnumbered by 2.5 million tourists every year. Of these, around 1.5 million are British. 'This is a great asset which we should capitalise on,' states Andreas Petrondas, permanent secretary of the Ministry of Commerce, Industry and Tourism, adding: 'The wine industry is very important to Cyprus and we're ready to help on international markets as far as the EU allows, although the industry needs to make changes to face up to fierce competition.' Cyprus has very little presence in the UK; the Co-op with its Island Vines brand is the only major retail stockist. As Jerry Lockspeiser (managing director of Bottle Green) points out, 'Cyprus is not cheap, and it is unknown, and has grape varieties largely unknown to the UK consumer. The Co-op sells a lot because of one man - Paul Bastard. He has adopted it as special within the Co-op and this is why it works - it's promoted regularly and heavily.' Indeed, Island Vines white is on promotion for most of July. EU membership has proved a bit of a headache here too, as Rosemary Rogers of Bottle Green says: 'Joining the EU was dire as reduced-price promotions cannot be funded, and cost of promotion is a challenge in the Co-op as in other supermarkets. However, by giving the shelf space to Cyprus they are really trying to offer their customers a range of wines from around the world!' Keo has just joined Ehrmanns in the UK, which will be concentrating on the cash and carry business to start with, but hopes to develop other opportunities in future.

The domestic scene

The sun, sea and holiday associations for tourists are one route forward, but the domestic market is also a huge missed opportunity. Cypriots themselves don't have a wine culture - consumption is estimated at around 14 litres a head (including tourists), the lowest of any European wine-producing nation. Around 70% goes through supermarkets, increasingly dominated by international companies like Lidl, which is opening 25 stores, and Carrefour, which recently took over the second-largest chain. Imported wines have already reached around 20% market share, and this trend looks set to continue as international owners bring in their global sourcing muscle. 'International brands are being heavily promoted and there's a big need for education locally,' according to Demos Thoma of Etko. Former banker and producer of one of the island's top whites, Costas Tsiakkas, agrees: 'Cypriots need educating to have pride in their own wines.' Even the few specialist wine shops on the island don't stock Cyprus wines. Restaurants should be a good opportunity to highlight Cyprus wine, but here too there is little knowledge or confidence, and a lack of know-how in keeping wines in good condition. Antonis Haggipavlu of Etko has invested in temperature-controlled units for wine storage, but admits that restaurants are inclined to switch them off at night.

Variety is the spice of life

International varieties have been on the island for at least 50 years, and reds, especially Shiraz, are showing themselves to be well suited to Cyprus. University of California Davis-trained young oenologist Sophocles Vlassides has set new standards for red wine here with his Vlassides Reserve Shiraz 2003. He also consults for the impressive Vasa winery and Tsiakkas. Promising international reds elsewhere include Kyperounda, Domaine Nicolaides, Vasilikon and Vasa. However, the vast majority of production is still local varieties.

As Fikardos points out, 'International varieties are produced everywhere, growers are starting to pay attention to local varieties, but it will take time to have enough'. Local black Mavro is undistinguished at best, but other reds like Lefkada and Maratheftiko have more potential. Tsiakkas believes in Maratheftiko as the Carmenre of Cyprus, while admitting it needs a lot more viticultural research. It needs a cross-pollinator and is prone to poor berry set, so there is currently no single plantation on the island. It also ripens late and Tsiakkas admits paying 1CYP (1.75) per kilogram to persuade growers to pick it separately when ripe, and this shows in the improving quality of his latest vintages. Other impressive Maratheftikos include Vasa and a barrel sample of Keo's Heritage. Lefkada has less universal approval as it can be very tannic. Franz van Dorsser, consultant at Keo's Mallia estate, reckons it has high potential, and is a useful blending partner for grapes like Cabernet to retain local identity.

White production is dominated by local Xynisteri, generally dismissed as only fit for light, fresh, immediate drinking. It can be prone to low acidity too, but growing at altitude can remedy this and give wines of attractive, mineral purity and crispness. In 2005, possibly Europe's highest winery was opened at Kyperounda, with vineyards going up to 1480m. Oenologist Minas Mina trained in Greece then Glasgow, and has made an impressive Xynisteri here called Petritis, using skin maceration and partial oak ageing. It

was voted top dry wine in this year's inaugural Cyprus wine competition. Other good examples of Xynisteri include Vlassides and Vasilikon, and it is also the backbone of the Co-op's improving Island Vines white.

United they stand

Cyprus now has 52 registered wineries, many admittedly small and only selling locally, but others capable of putting Cyprus on the wine map. The problem is getting all these wineries to work together to present a new image for Cyprus, which may not be easy. As Kyriacos Papadopoulos of Loel says, 'We have a saying here; wherever there are two Greeks, there are three parties.' The four big wineries have their own Cyprus Wine Exporters Association, while the smaller producers work through Bacchus, the association of regional wineries. Both organisations are making noises about co-operating, and Nicolaides is optimistic that 'the big guys have finally worked out that small guys are not the enemy and can work together'.

Cyprus is clearly an island with a lot going for it and the potential to make some truly exciting and unique wines, although it lost its way in the pursuit of easy money for imitation Sherry and cheap bulk. The industry shake-up has been precipitated by EU membership, and producers are going to have to face up to difficult times in adjusting to the new market realities. Cypriot producers, both big and small, need to concentrate first on quality, then on promoting their wines at home and building a sense of pride to fight off the imports. Tourists, too, can become ambassadors in their home countries if they have enjoyed the wine on holiday. There are plans for a wine route and a new wine museum has been opened at Erimi to tap into this. The volume of exports of the past is unlikely to ever be replaced, but there are niche markets to be found for high-quality and interesting wines, which Cypriot producers are increasingly demonstrating that they can make. As Franz van Dorsser says, 'On Cyprus, we can make some amazing wines -

we have the soil, climate and tradition.'