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Published:  23 July, 2008

Set against a backdrop of socio-economic problems - urban drift, antiquated production values - and the controversial application for EU admission, Cyprus' wine industry is battling gamely to convert its export profile from bulk to alternative wines. Joanne Simon reports on the positive mood at the island's four big producers

Cyprus is the third largest island in the Mediterranean, after Crete and Sardinia, and a former British colony, where cars are driven on the left and expats can be spotted sipping afternoon tea or gin and tonic on shady verandas. Indeed, when visiting the many tranquil parts of this popular tourist destination, it is all too easy to forget that it remains Europe's last divided country, rent in two by a forbidding Green Line' that separates the Greeks in the south from the Turks in the north. Only last week, the United Nations secretary general, Kofi Annan, put forward a comprehensive peace plan for the country - 28 years since Turkish troops occupied the northern third of the island, in 1974, and just weeks before a crucial summit in Copenhagen to decide on the island's entry to the European Union. In short, the Greek Cypriots have applied for EU membership on behalf of the entire island, but the Turkish Cypriots remain adamantly opposed to accession before Turkey also joins. With Greek Cypriots making up 82% of the population but controlling 63% of the land, and Turkish Cypriots earning seven times less than their southern cousins, Cyprus clearly has a few issues to deal with. Consider, for a moment, that most of its neighbours are Muslim countries, then throw in a recent warning from Tony Blair that Britain's military base on the island is within reach of Iraqi missiles, and perhaps it's not surprising that Cypriot wine doesn't make the international headlines very often. For decades, of course, the country was famous for Cyprus Sherry'. It was also a bulk exporter of grape concentrate for British Wine, and of wine intended for industrial uses such as Glhwein or sangra. And it sent vast amounts of basic wines to the Eastern bloc - an extremely lucrative market until the fall of Communism. For evidence of quality table wine production, however, it is necessary to go further back in history, for this was the wine consumed by the Pharaohs of Egypt, celebrated by Homer and praised in the Bible by King Solomon, who said: My beloved is unto me as a cluster of Cyprus in the vineyards of Engadi'. Where did it all go wrong? At first glance, Cyprus seems to have everything going for it, not least its claim to have the world's oldest wine still in production. Commandaria, a solera-matured sweet dessert wine, can be traced back to 1191, when Richard the Lionheart acquired the island during the crusades. He subsequently sold Cyprus to the Order of the Knights of the Temple, who established themselves as Commanderies, hence the name of the wine, which was described by Richard himself as The Wine of Kings and the King of Wines'. There's no doubt that Cyprus is steeped in history, upon which its wine industry probably dwells too much. But here's a thought: in over 4,000 years of winemaking, not even three centuries of Ottoman rule (1571-1878) seem to have had much impact. Indeed, the Muslim invaders allocated the better land to people of their faith, leaving the Orthodox Cypriots the less fertile ground on the southern slopes of the Troodos mountains, where nothing but vines thrived. Now a natural heritage site, this is an undulating, hand-sculpted' landscape, with limestone terraces creating a dazzling ripple-effect as far as the eye can see. The climate is typically Mediterranean, but with vineyards planted at altitudes ranging between 250m and 1,500m, there is so much temperature variation that Cyprus has one of the most extended vintage periods in the world - from mid-July until early November. It is also phylloxera-free, so indigenous vines, including Xynisteri, Mavro, Maratheftiko and Lefkada, are ungrafted and, in places, truly ancient. With so much potential, and with the benefit of hindsight, it seems a shame that international demand for bulk wine for so long removed all incentive to bother with quality wines. Instead, enormous wine factories near the docks of Limassol (a considerable distance from the vineyards) spewed out vast quantities of grape by-products. And make no mistake, it was hugely profitable while it lasted. Since the early 1990s, however, the four big companies - KEO, SODAP, ETKO and Loel - have recognised the need for a dramatic shift from quantity to quality. They have spent millions on developing new vineyards, planting international grape varieties and rediscovering old Cypriot grapes. They have built small, well-equipped wineries closer to the vineyards, or at least attempted to shorten the time between picking and pressing grapes in Limassol. And they have invested millions in modern technology, equipment and the employment of foreign consultant oenologists. The industry as a whole has undergone a quality revolution', aimed at producing wines which can - to quote Tom Stevenson in The New Sotheby's Wine Encyclopedia - not only be safely consumed', but which are now, at last, starting to excite'. And boy, am I excited at the cellar at KEO's Laona winery, near the village of Arsos.

KEO and the Kiwi Perhaps the enthusiasm of KEO's New Zealand winemaker, Tom Van Damm, is infectious, or perhaps I'm merely flattered to be the first outsider tank- and barrel-sampling the 2002 vintage. But Philip Goodband MW, who has been working with KEO over the past three years to turn the wines into a range for the UK', seems equally impressed. Just look at those bright colours,' he says. There's already such good fruit definition in the Maratheftiko and the Lefkada has huge structure. The Syrah immediately says "Syrah" and I'm just knocked out by the Merlot! If we're making wines like this after one year, imagine what they'll be like in ten years.' Beneath the bougainvillea at KEO's Mallia Estate, where KEO has shifted its entire bottled wine production, we sample the dry white 2001 Aphrodite, which Van Damn kept as reductive as possible', as well as the red, Mavro-based 2001 Othello, innovatively fermented on Cabernet skins to produce a nice, fruity, very drinkable equivalent of a Beaujolais Cru'. As Goodband explains: We decided that core brands like Othello or Aphrodite should not seek to imitate the big, fat New World blockbusters. They should be easy to drink and clearly a product of modern winemaking.' Moving up KEO's quality ladder', we also try the white 2001 Mallia Estate, which is a blend of Chardonnay and Xynisteri from KEO's vineyards, 10-15% of which has some oak chips thrown in (next year it will be staves). We also taste the red 2001 Mallia Estate (export), which retails at 4.99 in the UK (Grants of St James's) and combines the ripe cassis aromas of Cabernet with the bramble notes typical of Lefkada. And we linger over KEO's premium' 1987 vintage Commandaria St John, which is like liquefied fruitcake, only more delicious. What all these wines show is that there is a huge range of styles capable of being produced here,' says Goodband. All it takes is our sunshine and that little New Zealand touch,' smiles Akis Zambartas, KEO's managing director, and a man who is obviously proud of how far his company has come. But little' hardly seems the most appropriate word for the giant Kiwi, who came to Cyprus on a three-month contract eighteen months ago'. By all accounts, Van Damm has assimilated well, although he openly admits that trying to change years of ingrained tradition and attitudes has led to much confusion and some frustration'. As for the best part of his job? We've had exactly one hour of rain since June!' he beams. More seriously, Van Damn says the limestone soils give an incredible' balance of sugars and acidity to both indigenous and international varieties. I'm a big fan of Lefkada and Maratheftiko,' he says. Mavro should get treated like any New World wine, with lots of tartaric acid. But Opthalmo,' he grimaces, is a pet hate of mine. It has no colour, no flavour and it ripens late. It used to be mixed with Mavro that had too much sugar, but now I believe the best thing to do with it is rip it out.' As for KEO's international varieties, Van Damn believes small quantities of Syrah are showing great promise', while Cabernet Sauvignon successfully' underwent some malolactic fermentation for the first time last year. But he feels frustrated by the Cypriot Government's paranoia' about introducing anything new in view of Cyprus' ungrafted vines. It's self-defeating; all they need is a good quarantine system,' he says. Viognier, for example, would do very well on this limestone, in this climate. And so would Carmenre.'

Changing the culture Evidence of considerable investment is apparent everywhere at KEO, which - rather conveniently - is a member of the Hellenic Mining Group. Listed on the Cyprus Stock Exchange, KEO's annual turnover is 48 million, which Zambartas is happy to put into perspective: We're competing with Coca-Cola here. In fact, profit-wise, we're doing better!' Perhaps it's no wonder that investment in improving KEO's logistics, modernising its wineries, replanting its 90-hectare vineyards and introducing new training methods, pruning techniques and drip irrigation has been seen as the easy part. The real challenge, it seems, has been trying to bring about a cultural change among contracted grape growers. It has been a major battle getting them to leave their grapes on the vines until they reach physiological ripeness,' explains Goodband. But the nucleus of growers persuaded to do things in a modern way is growing. Slowly but surely, we are moving from the Third World into a 21st century operation.' Speaking of which, KEO's introduction in 2001 of the first mechanical harvester in Cyprus has been received with the utmost suspicion by some. Our rivals argue that it doesn't provide the same quality as hand-picking,' says Zambartas. On the contrary, we can harvest all our vineyards at night, when it is cooler, bearing in mind that this is a place where you can boil eggs on the ground in the summer,' he laughs. And we can harvest quickly, so the grapes are picked in optimum condition.' Are the other producers simply jealous? It doesn't appear so, considering that KEO's recent success in winning a Bronze Medal for its 2000 Anerada Dry White Wine at the International Wine and Spirit Competition has been welcomed, for one, by SODAP. I am thrilled to hear about any wine from Cyprus getting recognition; putting us on the map,' says sales manager Marinos Pericleous, hastening to add that SODAP's new style' Mountain Vines Semillon won a Bronze Medal of its own at this year's International Wine Challenge.

Co-operation at the co-op SODAP (The Vine Products Co-operative Marketing Union) was founded in 1947 and has 10,000 members from 144 vine-growing villages. Like KEO, developments include planning new production facilities devoted entirely to bottled wine, and employing winemakers from abroad. We were the pioneers of trying to make wines a little more aromatic and New World-like,' claims Pericleous. Currently, we have a Greek-American called Zane Katsikis, who lives in France and works in Australia, so he really knows Old and New World wines.' However, Pericleous believes that the most significant changes at SODAP have been in its management structure. For two years the sales office was not even staffed, but I'm in position now; our former production manager, Andronikos Andronikou, is now our general manager; and we also have a new finance director,' he says. We are all young people with slightly different ideas in an old company, and it is now up to us to get busy and show what we can do.' Being a co-operative, however, means that all new policies have to be approved by the board. Our decision-making is perhaps not as powerful as the other companies, because everything has to be put to the vote,' admits Pericleous. And our members are mostly vineyard owners who are not very well educated, so they don't have the wellbeing of the company as their first priority - they are more concerned with what they or the people in their village have to gain. But things do get done,' he insists, it just takes a bit more time.' Taking things slowly also applies to modernising SODAP's more traditional styles of wine. They have their own audience, whom we don't want to scare away by changing the wines overnight,' says Pericleous. But we're making them more modern, step by step.' Meanwhile, SODAP has already introduced its red and white Island Vines (UK agent: Bottle Green), which are blends of local varieties, as well as the award-winning Mountain Vines Semillon and a red Mountain Vines blend of Cabernet and Maratheftiko. We can produce good wines, but we're still not getting the attention we deserve, which is why we need to work on the way we are perceived in the market,' says Pericleous. New packaging will help, provided that the quality is inside the bottle first, which I believe it is. And then all we can do is tell people, as much as costs permit, that we have these wines.'

Into the fray There is no doubt that accession to the European Union would change things for Cyprus, and Pericleous says he prefers to view the glass as half-full rather than half-empty. I would like to think that it will enable us to operate in a bigger market, rather than that the other wine-producing countries will take over our domestic market,' he says. Given our size and the money we have available, we won't be able to tackle the big guys. But at least we'll be able to knock on the right doors, and see whether we get in.' Stelios Petrides, the general manager at Loel, which was formed in 1943 and is now best known for pioneering the commercial production of the local grape distillate known as Zivana, is more cautious. In the EU environment, one has to be successful in negotiating, where Cyprus has failed entirely so far,' he says. But like the other wineries, Loel too has been investing in new equipment aimed at improving the quality of its wines, most notably its new Mesogeois range, which will be introduced in 2003. Even at these early stages, improved characteristics are evident,' says Petrides. And having this year planted an experimental vineyard with Maratheftiko, he firmly believes that indigenous as well as international grape varieties can have potential, as long as the appropriate marketing techniques are followed'. ETKO chairman and chief executive Antony Haggipavlu disagrees: We have tried spending money on marketing Cypriot wines overseas, and we have tried blending indigenous varieties with international ones. But it doesn't work, simply because if consumers don't know something, they don't buy it. The only solution is to use known varieties and to produce high-quality wines at the lowest cost possible.' Best known as the producer of EMVA Cream, the UK's best-selling Cyprus fortified wine', ETKO is the oldest winery in Cyprus, dating back to 1844, and Haggipavlu appears to be looking forward to handing the reins over to a sixth generation of Haggipavlus - son Dimitris on the production side and daughter Olvia in sales and marketing. I'm getting tired!' he jokes. But while ETKO might appear to be more steeped in heritage than the island's other wineries, it, too, has invested in the most modern equipment, planted its own vineyards in the Zanatzia region, and built its Olympus winery in the village of Omodhos. Things change, and we have to change with them,' says technical director Themis Themistocleous, who is a firm believer in international varieties. You can't talk about Mavro or Xynesteri and expect people all over the world to know them,' he says. Local varieties make good wines, especially Maratheftiko, but in general I would say that their quality tends to be lower than that of imported varieties.' Themistocleous believes that the Greek Cypriot Government has done a great deal to encourage its wine industry to shift from bulk to bottled production. They have invested a lot of money in new varieties and in making vineyards easier to maintain, and they have improved road access to the wineries. In the end, we hope it means our production costs will be much lower,' he says. But others warn that more has to be done to prevent further urban drift of younger generations heading to the coastal towns to work in tourism or manufacturing. If the wine industry is to survive,' says KEO's Van Damn, the Government has to do more to persuade people that if they shift to quality wine production, they can make a good living from it.' Philip Goodband, even without his KEO hat on, is equally upbeat: Cyprus will only ever be a niche producer,' he says. But in our ever-expanding mass market, there is an increasing demand to find something different. For Cyprus, it's simply a question of determination, drive, passion and stamina.'