Bulgarian winemakers look upmarket to fight crisis

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 at five-to-seven euros 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.

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.



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