Exports of delight

With the government relinquishing control of alcohol production, Turkey’s grape growers are beginning to see the earning potential of wine, says John Downes MW

ASK a hundred people to name a wineproducing country and you can bet your bottom dollar that Turkey will not be one of them. It’s not so surprising because, although Turkey is the fifth largest grapegrowing country in the world, only 1% of the fruit goes into wine.

However, according to Vincent Lebas, export manager at Kavaklidere, "This is changing as people are seeing the profits that wine can offer and are investing heavily."  With wine production up 20% in the last six years from 44 million litres (1997) to 57m litres (2003), there’s a swell of confidence in the country that claims to be the historical heart of winemaking.

But whether or not today’s impressive investment is always wisely directed is another story. Turkey’s religious history plays an important role in its wine industry with the vineyards being located in the original Christian regions of this vast East-meets- West country.

The Marmara-Thrace region bordering the Sea of Marmara accounts for 46% of the national vineyard, while Central Anatolia around the capital city of Ankara, accounts for 27%.  There are  also vineyards planted in the regions around the Aegean Sea.

The 1,250 local grape varieties are as diverse as the vineyards, the main reds being Kalecik Karasi, Bogazkere and Okuzgozu, with Narince, Emir and Muscat leading the whites.  Inevitably,  Cabernet Sauvignon, Merlot, Syrah, Sauvignon Blanc, Semillon and Chardonnay are also now being planted.

There are hundreds of small wineries but the big two of Doluca and Kavaklidere dominate, producing 18m and 13m bottles per year respectively. Sevilen and Melen also export, but this elite group is set to be joined by a growing band following the recent disbanding of TEKEL, the government body that controlled alcohol production until early 2004.

Prior to the changes only two companies were authorised to import wines (with a staggering 300% duty) but they could sell these wines only to hotels and restaurants, thus handing a virtual monopoly to Turkish wines in the valuable supermarket trade.

The result was sky-high restaurant price lists which, in turn, produced inflated Turkish wine prices in a "false" marketplace. 

High prices were also fuelled by increased demand from booming tourism and by wine becoming more fashionable.  "We sell 40% of all our wine just into Istanbul," confirms Lebas.

Free market

The sweeping 2004 changes opened up the import market and reduced the duty on imported wines to about 50%, allowing the free sale of imported wines to Turkish citizens, who beforehand could only buy Turkish wines.

The consequent downward pressure on on-trade prices, and the likes of Chile and California leading the assault on Istanbul and Ankara wine restaurant lists, has resulted in the Turkish wine industry chasing the Export Dragon, dreaming of shelf space in  supermarkets from London to Madrid and beyond.

But, exciting as the prospect of bulging bank accounts may seem, Turkish winemakers are fast realising that exporting is easier said than done.  "It’s not as simple as many think. I’d love to export but the competition from Europe and the New World is very strong as they produce good value, consistently fruity wines," says Umur Ariner, owner of Umarey.

Turkey’s difficulty in competing lies in its existing export portfolio.  "Most of the wines exported are destined for Turkish restaurants around the world, which hardly gives a comprehensive picture of the export scene or the style of wine it demands," says Doluca’s Jean-Pierre Laurent.

Week One of any marketing course covers the "Four Ps". Not only has the product to be of good and consistent quality, the price must be competitive, the promotion must be attractive and the place of sale must be well positioned.

Ooops. Most Turkish producers, even those investing millions of dollars, are hardly scoring 2 out of 4.  "Don’t forget, we’re still at the beginning.  Only 10 years ago we had no new vines planted, we had no Cabernet Sauvignon or Merlot, we had no barrels, we didn’t even age wines," says Doluca’s chief winemaker, Ahmet Kutman.

Nonetheless, changes will need to be made if Turkey is to get even the smallest slice of the export market.  Doluca has invested approximately US$25m in both winery and vineyard over the past 10 years, while Kavaklidere’s multi-million dollar investments include the shiny new US$3m winery and vineyards near the Anatolian town of Nevsehir.

As these two companies account for approximately 55% of Turkey’s total wine production, their success alone can change the fortunes of Turkish wine.  Unfortunately, it’s not only Turkey’s export portfolio that raises eyebrows; its buoyant domestic market does nothing to encourage improving quality.

"About 30% of our wine is sold into the tourist hotels which demand cheap, acceptable wine. In fact, for the increasingly popular all-in holidays they don’t want good wine at all as the holidaymakers will then drink too much!" says Kavaklidere’s managing director, Ali Basman.

The well-worn phrase "you can’t make good wine without good grapes" should be nailed above the entrance to every Turkish vineyard.  With summer mercury hitting 45 degrees I expected indifferent whites and powerful chunky reds, the latter being a style that, with a little tweaking, could be adapted to the popular fruit-driven wines fashioned in the vineyards of the New World.

How wrong I was! Many of the whites are surprisingly good, especially the local varieties, but the reds were disappointingly thin of fruit and mean of colour.  The reasoning behind this enigma is fascinating.

Until 2004 each year’s harvest dates were officially announced by TEKEL, dates that were generally accepted as early in vinous terms.  Add into the equation an extreme scarcity of competent grape pickers and companies desperate to secure them first, and the result is a premature harvest of unripe grapes.

So, shock horror, it’s effectively the engagement of the pickers that determines wine style and quality – hence wines of weak fruit, relatively low alcohol and stalky tannins.  Not a style that’s likely to set the international market on fire.

Growers who traditionally pick for sugar levels and tonnage alone are a further challenge to ambitious Turkish winemakers.  "We’re buying more vineyards, but as we buy 90% of our grapes on contract we need to have our own teams in the vineyards, influencing the growers towards quality," confirms Doluca’s Laurent.

Demanding quality

With less demand, it’s easier at the boutique Melen winery.  "It’s still difficult but we’re educating our grape growers and are paying for quality, not weight, a move that’s improved our wines enormously," says Melen’s winemaker, Cem Cetintas.

Transporting grapes for up to eight hours by road is another worrying practice.  The introduction of cool, night travel with the grapes in small baskets is a marked improvement but such practices can’t produce the consistently fresh, clean and fruity wines demanded in the global marketplace.

"Many winemakers are aware of this and are building facilities nearer their vineyards," says Kocbag’s winemaker, Menduh Erdogan.

With little exposure to the "real" export market it’s not surprising that Turkey is not at the cutting edge of marketing – the name of Kalecik Karasi on an old-fashioned label is hardly magnetic.  But there are seeds of hope.

In 1998 Doluca launched Sarafin, a range of classic varietal wines sporting international-style labels.  "The project was launched in 1990 when dedicated vineyards were planted under our strict supervision.

The wines are a growing success.  They could be the turning point for Turkish wines," says Ahmet Kutman at Doluca.  

A European Union?

Meanwhile, Melen’s modern packaging has helped lift exports to 40% of production.  "Most of our exports go to France and Japan, with Japan taking 60%.  Narince goes superbly with sushi and fish," notes Cetintas.

To their credit, Turkish winemakers are open to constructive criticism and are acting upon it, and there are reasons for optimism as the latest statistics show exports of 4.7m litres in 2003 boosting the bank balance by US$7.3m, compared to 2001 when 4.8m litres brought in just US$5.23m.

These positive developments can also be attributed to Turkish winemakers speaking to each other for the first time.  "We had great difficulty getting the winemakers around a table, but when we eventually succeeded things started to happen.

Turkish wines had a stand at the London International Wine Fair for the first time last year and next year’s stand will be bigger as more companies want to participate," says Helen Ozer, managing director of newly formed wine PR company Alaturka.

Turkey’s efforts to join the European Union are a hot talking point in the vineyards and the October 2004 agreement which gave the green light to open discussions has brought smiles but also wise notes of caution.

"Talks will open, but don’t think that entry will happen overnight. It could take 10 years to conclude," notes Kirsty Hughes, political expert and Visiting Fellow at the London School of Economics.

Developing regions

Kavaklidere’s Basman agrees: "Some regions of Turkey have not yet developed sufficiently, and Turkey as a whole is not yet ready for all the rules and regulations."

EU membership may be a decade away but Turkish wine is today at a crossroads.  And with the domestic market now open to aggressive competition, critical decisions have to be made.

Many are simple and inexpensive, others will need a redirection of resources based on expert international advice.  The wrong decisions could put the Turkish wine industry back years.

But the right decisions in the vineyards, the creation of globally recognised wine styles and sustained, intelligent marketing could take the industry into new territories – and that doesn’t mean just a bigger list in Turkish restaurants!