Czechs raising more wine glasses

Czech vintners are optimistic that domestic producers will continue expansion, thereby reducing the need to rely on imports.

Czech wine production almost doubled last year to record amounts, reflecting an influx of wine producers enjoying their first year of harvest after securing EU grants in 2004.

Wine production in the Czech Republic topped 820,000 hectoliters last year, up from 434,000 hectoliters in 2007, according to a report released last week by the Agriculture Ministry and the Czech Union of Winegrowers.

This increase reflects a 10-year trend of increasing production, and winegrowers expect the numbers to continue rising as more small and midsize vineyards begin producing over the next few years.

Domestic consumption of wine dropped slightly last year but has been on the rise over the past decade, as has exports of wine. Exports more than doubled last year to 17,000 hectoliters, most of which went to Slovakia. Martin Půček, secretary of the Czech Union of Winegrowers, explained that the increase in production means that domestic grape growers, many of whom receive EU subsidies, will now be better able to handle Czech demand.

"Before we joined the EU in 2004, we acquired new vineyards, and all of them were fertile this year, which explains why production doubled," he said. "But only 40 percent of the wine consumed in the Czech Republic is produced here, so that's why we're trying to increase production and the number of vineyards."

Sales of all wines have risen since the mid-1990s, and wine remains the second most popular beverage in the country behind beer. The largest increases have come from the table-wine segment, though imported wines are becoming increasingly popular as well, reaching 60 percent of all wine sales, according to Eva Karasová, a spokeswoman for Tesco, who said wine sales have grown 43 percent since 1997.

"People prefer value for money," she said. "Customers are monitoring the price on one hand and the quality on the other hand, and we expect stable growth for the future."

Meeting demand

As wine sales continue to increase, domestic producers have not been able to keep up with the growing demand, either at home or abroad. While Czech wine is becoming more recognized internationally, Czech producers have been unable to meet export demand, thus limiting awareness of Czech wine abroad, said Půček.

"We need all grapes from increased production because we still have to import wine to meet the country's consumption," he said. "Our export is small because we do not produce a great deal of wine, so it's hard to judge the popularity of Czech wine abroad."

Most of the newer wine producers are entering the lower-price wine market, meaning more competition in a crowded segment. Higher-quality wine producers are holding steady as oenophiles become more frugal, but unwilling to sacrifice quality. Petr Marek, a spokesman for Springer, a top-shelf Moravian wine producer, admitted that the market is slowing, but he hoped this trend would be temporary and remained optimistic that customers would soon return to drinking larger quantities of higher-quality wines.

"We are seeing that people are drinking less, but higher-quality wine. It's chiefly the economic crisis that has affected our business and stopped further sales increases," he said, but, in the future, "we're betting on customers drinking more higher-quality wines, and, as customers turn to quality, we expect competition within the high-grade wine segment."

The price of wine has remained relatively stable over the past few years, as both supply and demand have increased, but the price of wine does not always reflect the market, said Půček, who noted that 70 percent of Czech wine is sold at supermarkets, where suppliers often fall victim to what he called "price politics." He also pointed to the effect joining the EU has had on wine prices.

"When we joined the EU, the price pressure increased here like in every member country, and the global crisis hasn't helped either," he said.

Expanding market

The Czech wine market is becoming more populated with new growers, and competition has certainly increased, but there is still plenty of room for expansion, said Rudolf Prchal, salesman at Baloun, a Moravian winemaking company that annually produces 1 million bottles of wine for the Czech market.

"Of course, there are more producers, but mostly small-scale producers, not large players. And the consumption relates to this, because most people are looking for a smaller wine producer to cooperate with," he said. "The market isn't crowded, so small producers will always find a gap."

Most vintners are optimistic that Czech producers will continue to expand production, thus becoming more self-sufficient. Czech wine consumption shows no signs of slowing down, so production increases will only allow Czech vintners to stop importing so much wine to meet domestic demands.

The Czech Republic is most suited to producing light, fruity and sweet wines, said Půček, who predicts that, in the future, vintners could begin experimenting to meet more exotic tastes of customers curious for straw and ice wines, for example.

"I am an optimist, so I believe that Czech wine production will stay in business and grow, and wine will always be consumed," he said. "It's a good trade to be in."

Stephan Delbos