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Russia’s wineries are on the rebound as the rising middle class rediscovers a taste for a long-neglected local product.by Nikolay Protsenko 9 January 2012
ROSTOV ON DON, Russia | For many years Russia was a blank spot on the world wine map, even though the country has a long tradition of winemaking and large vineyards dot its Black Sea and lower Don regions. That is changing rapidly as wine writers discover the products of local wineries, or rediscover wines known throughout Europe in pre-revolutionary times. Several Russian wineries won medals and prizes at prestigious European exhibitions in 2010. These wines come from large industrial producers. The scant few boutique winemakers in Russia say they, too, can make a splash, but only when the thicket of regulations on making and distributing wine is cut back.
AN INDUSTRY REDISCOVERS ITSELF
“Export is not our principal task,” says Romanishin, Fanagoria’s chief executive. The Russian market is far from saturated, he says. Wine sales rose by about 10 percent a year in the second half of the 2000s as Russians’ real incomes climbed.
Winemaking in southern Russia claims a heritage going back two and half millennia to the Greeks who colonized the shores of the Black Sea. In modern times the Russian wine industry enjoyed its heyday during the belle-époque before World War I, when the sparkling wines of Abrau Durso, a village in the Krasnodar region, conquered not only the tsar's court, but Paris connoisseurs as well.
A time of obscurity then began, as the most prominent wineries in the Soviet Union were concentrated in Crimea (now part of Ukraine), Moldova, and Georgia. During the anti-drinking drive instigated by Soviet leader Mikhail Gorbachev, wine consumption plummeted from a respectable 15 liters to three or four liters annually per person, according to the Center for Federal and Regional Alcohol Markets Research.
The growth of the middle class – aided by official, ostensibly health-related bans, on wine imports from major producing countries Georgia and Moldova – helped the industry bounce back in the 2000s. By 2010 annual consumption reached seven to nine liters per person, still far below the level of Western Europe.
In 2010 Fanagoria for the first time entered the local business magazine Expert South’s list of the biggest companies in southern Russia. With 2011 sales of 1.84 billion rubles (about $58 million), the winery ranked 227th in the ratings and sells its products in most of Russia, including the Far East. Romanishin says the company’s efforts in quality control and marketing are paying off.
Two years ago Fanagoria was the first Russian winery visited by Jancis Robinson, the wine correspondent for the Financial Times. Robinson noted that winemaking in Russia looked pretty much as it does everywhere, unlike in Soviet times. “The big transformation in Russian wine production has been in the infrastructure, with new winery equipment and even whole new wineries being installed,” she wrote.
“In some ways we’re treading the path of South Africa,” Romanishin says, this time over a Cabernet-Merlot blend from Fanagoria’s premium Cru Lermont line, named after the classic Russian poet Mikhail Lermontov. Only 20 years ago South Africa had “nothing serious” in the way of wine, but after a makeover of the industry the typical product is on par or better than European brands, he says.
“Russia has always been an integral part of the European cultural and mental space, and now, after the decades of communist experiment, we are coming back.” This notion leads Romanishin to coin a phrase for Russia as a place to discover wine: “The new Old World.”
In June Fanagoria, along with the Abrau Durso and Tsimlyansk wineries, for the first time won medals at the London International Wine Fair.
Russian wineries are not looking only to the domestic market. Romanishin says his company supplies wines to Japan, the United States, Israel, and the United Kingdom. It has even presented a Cahors-style red in Colombia. And last year Abrau Durso chief executive Boris Titov announced plans to market its famous sparkling wine in China.
Russian wines can compete based on their quality to price ratio, Fanagoria’s trade director, Sergei Kolosov, says. The vintner’s Aligote sold online in the UK for 8 pounds (about $12), blogger Lyons noted. Good quality domestic wines sell for $5-$15 in Russian shops.
“Our dessert wines have some advantages in the world market, but first we have to promote them,” Kolosov adds.
“We are just at the beginning, but slow and steady wins the race,” Romanishin chimes in.
ROOTS IN TRADITION
Yanis (Ivan) Karakezidi meets me early one Sunday morning at his farm a couple of miles from Anapa, once a Greek colony called Gorgippia. The landscape here suggests the south of France, a reminder that Anapa and Bordeaux lie approximately at the same latitude.
Russian wine experts consider Karakezidi the only indigenous “garage” wine maker, an honor he accepts wryly: “It’s true. Do you know another guy as foolish as me?”
In fact this is a bitter joke. The legal strictures on producing and distributing wine are so tight that in practice only large-scale wineries can survive. Small producers say it is nearly impossible to obtain the necessary licenses from Rosalkogolregulirovanie, the federal alcohol regulator, even if they can pay the 12,500 euro license fee.
For the Karakezidis and the other so-called Pontian Greeks living along the Black Sea coast, wine making for their own use is a matter of routine, although Karakezidi, who was trained as a musician, had to be talked into it.
“When I was a boy, wine was a kind of labor service for me, as I had to help my parents,” he says. “Under the Communists it was impossible even to dream of having your own wine label. But times changed, and my friends told me that I could succeed.”
Compared with Fanagoria’s 2,500 hectares of vineyards, Karakezidi’s 16-hectare Stretto winery is a minnow. Local and international wine connoisseurs began to take note soon after his first wines appeared in 2001.
“No one could imagine that our local man could produce a wine the French ambassador would drink with pleasure,” says Marieta Yemtyl', who has made Stretto an obligatory stop on the weekly tours she leads to the Northern Black Sea region’s wineries.
Karakezidi says he wants to revive the tradition of small wineries this area was famous for a hundred years ago. Industrial-scale production is untrue to the meaning of fine wine, he insists. But what joins Karakezidi and wine magnate Romanishin is a strong sense of local patriotism. “From time to time I feel that my optimism is at an end and I think about emigration. But this land is where my ancestors are buried, and it would be a desperate decision to escape. Well, don't ask me such difficult questions, let's drink the wine,” he says, taking up his flute.
Local politicians are beginning to realize the potential benefits of small wineries, too. In August, Krasnodar Governor Alexander Tkachev and the heads of two Russian winemaking associations proposed to cut the Gordian knot of regulations surrounding the industry, suggesting that winemakers be classified as ordinary farmers. This would obviate the need to apply for an expensive wine license and allow artisanal winemakers to join forces to distribute their products across the huge Russian market.
“There’s a direct connection between what a person drinks and eats and what he or she is. I’m absolutely sure that the true Russian citizen will come into being when people begin to drink good wines,” Karakezidi says.