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Cyprus seeks to put itself on world wine map -- again
Wines & Vines / September 2000

By Larry Luxner

LIMASSOL, Cyprus -- Grapes have been grown for winemaking on Cyprus as far back as 4000 B.C., and both the Babylonian and Jerusalem Talmuds specifically mention "Ya'in Kafrisin" -- Hebrew for "Cypriot wine" -- as a sacrament in religious rituals during the time of the First and Second Temple in Jerusalem.

In fact, Orthodox Jews around the world have no choice but to remember Cypriot wine, since they must recite the words "Ya'in Kafrisin" twice a day in their prayers.

That's the kind of name recognition Cypriot officials would die for among the all-important Western European market, which in modern times has been the leading consumer of wines from Cyprus.

With an area of 9,250 square kilometers and a population of around 740,000 inhabitants, Cyprus has under cultivation some 23,500 hectares of vines, with an annual grape production of between 120,000 and 140,000 metric tons. In a good year, this translates roughly into 90,000 to 100,000 tons of grape juice, bottled wine and bulk wine.

"Honestly, I can't say that our wines have any negative properties, except that they're not well-known, though in the ancient world Cyprus was a major wine-producing country," says Nicos Kyraciou, an industrial chemist at the Keo winery in Limassol. "We have a history of over 5,000 years of winemaking."

The wine vineyards of Cyprus are mostly on the southern slopes of the Troodos mountain range; the island's long, sunny Mediterranean summers ripen the fruit and give it its full flavor. Winters are mild, and the gentle Cypriot breezes keep frosts in check, dispel the fogs and protect the island's vines and grapes from fungus diseases. Along with Chile, Cyprus remains one of the few phylloxera-free wine-producing countries in the world.

"We have everything on our side," says Kyraciou, "starting with a very rich soil, strong sun and vines resistant to phylloxeria."

The island's modern wine industry has its roots in the 19th century, at the end of the Turkish Ottoman occupation. Around 1930, the first organized exports took place; as the industry grew in size, so did the vineyards. From 83,000 tons in 1950, grape production increased to 104,000 tons in 1960, 168,000 tons in 1970 and over 200,000 tons in the 1980s -- though since then, the numbers have fallen somewhat.

Kyriacos Stephanou, a commercial officer at the Cypriot Ministry of Commerce, Industry and Tourism, says four big wineries produce 90% of the island's wine. The largest is Keo Ltd., which was founded in 1927 and today has 600 employees -- making it the largest industrial employer on the island.

According to government officials, Keo enjoys a 55% share of the local market and a 75% share of Cypriot bottled wine exports to Europe. At present, Western Europe takes 87% of wine exports, while the remaining 13% of Keo's sales go to United States, Canada and Africa.

Keo's wines are all named after figures in Greek mythology. Aphrodite, the goddess of beauty (who according to legend was born in Cyprus), is the name of a dry whie wine made 100% from a Cypriot grape variety known as xynesteri. Thisbe is a light and fruity medium-dry white wine, and Nama is a liqueur now being exported in 700-milliliter bottles.

Etko Ltd., although not the biggest, is certainly the oldest winery in Cyprus, dating back to 1844. Another company, Loel Ltd., was the first in the eastern Mediterranean to produce grape juice without preservatives, helping Cyprus find a solution to disposing of surplus grape products. A fourth winery, Sodap Ltd., is a wine cooperative established in 1947, uniting 10,000 families from 144 vine-growing villages.

In addition to these four, there are 35 smaller wineries with capacities ranging from 180,000 to 500,000 bottles a year each.

Unfortunately, said Stephanou, is that 94% of Cypriot wines are exported in bulk, while only 6% of its wine leaves the island in bottles.

"We are not happy with this ratio," he told Impact. "The problem is not bottling the wine, but selling it. Although we have a history of winemaking from ancient times, we're not on the map in the 20th century. People do ask for our wines, but this is mainly for bulk, because our wines have good, strong body.

"To sell in bulk is easy for the exporter," he continued. "When prices are good, everybody's happy. But now, prices are very bad, and most of the wineries here are geared toward big volumes. Although we've been producing wines for years, the consumer never knew he was drinking Cypriot wines because it was always in bulk. People know Cyprus as a tourist destination, but we lack an image as a wine-exporting country."

Stephanou says wine exports generate $20 million a year for the Cypriot economy.

"In order for this to increase, we have to change our export mix, selling more bottled wine and less in bulk," he said. "Our goal is that in 10 to 15 years, we'll be selling 60% bulk and 40% bottled wine."

Cyprus exports mostly to its former colonial master, Great Britain, which granted the island independence in 1960. But wine shipments to nearby Arab nations are negligible.

"We have the unfortunate position of being surrounded by Muslim countries which don't import wine," said Kyraciou, adding that, unlike other sectors of the economy, the Cypriot wine industry was not too badly affected by the Turkish invasion of 1974.

"They took our citrus groves, beaches and first-class hotels, but wine was the only thing they left us," he said.

In fact, 37% of the island is still under Turkish military occupation, and Nicosia remains the world's only divided capital, with a forbidding "Green Line" separating the Greek and Turkish sectors of the city.

Keo's managing director, Dr. Akis Zambartas, says his company for the past 10 years has been engaged in a project to re-introduce the best of the indigenous grape varieties of Cyprus -- with a contribution from the noble, high-quality foreign varieties -- to offer Cypriot wines with special characteristics.

"We may safely assume that these indigenous varieties are from the dawn of time, preserved over many thousands of years," said Zambartas, noting that this project is aimed at ensuring the survival of Cypriot grape varieties and the very future of the industry.

"If we continue viticulture as it is now, Cypriot winemaking will shrink and maybe disappear. Small plots are no longer viable in today's world and government subsidies cannot continue forever. We have to think how to make grape cultivation profitable."

"We think the only way is to create large vineyards, planted so that modern practices will lead to lower production costs and quality improvement. We hope that the Cypriot government will improve the infrastructure of our main wine villages and give an incentive to growers to join in companies or cooperatives, benefiting from modern technology and solving the problem of scarcity of labor.

"The government also has to introduce legislation regarding Appellation of Origin, so that the island can be considered as a quality vineyard, and secondly, to be able to sell into an expanding market and at a higher price."

Things will certainly change once Cyprus is admitted into the European Union. The island has applied for EU membership and is expected to be a member state by 2003.

"We are hopeful that by joining the EU, things will be better," says Stephanou. "Now, we have no difficulty in exporting wines to Europe, except that the EU gives subsidies for exporting of wine products to its members. So their prices are better than ours. If Cyprus joins the EU, we'll be on an equal footing with our rivals.

"On the negative side, the EU has very strict laws regarding rules of origin, which are not easy for the grower to comply with. Although it allows you to sell more expensive wine, you have to bottle the wine in the area where you grow the grapes."

Says Keo's Zambartas: "Firstly, there is increasing competition. We have to be ready for that in terms of quality, price and consumer trust," says Zambartas. "We have been building these strengths since we started in 1927, developing the quality of our products and our operations to the maximum."

He adds that "we must have the structure as a company to really face the challenges of Europe. Our human resources must be of the highest level, as must our information technology. We are investing a lot of money to introduce the SAP computer system from Germany, the world's leading system for manufacturing, selling and distribution companies. We have to be very cost-effective and very efficient."

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