The Czech market

Most visitors to the Czech Republic, especially to the capital Prague, have no idea there is any decent wine of local provenance to be had. Grocery stores are full of bottles with unpronounceable grape varieties, sitting next to more approachable-looking examples from Spain, France, Italy and Germany — usually bearing far lower price tags.

Despite the many excellent local wines now on offer, unsuspecting visitors would be well warned not to buy anything costing under €4.00 ($4.60), twice as much as an acceptable Valdepeñas Tempranillo. Most wine lovers would raise that minimum to €6.00 ($6.75) and as much as €12.00 in a supermarket.

Transformation

So is the Czech industry on its knees? Far from it. Huge EU subventions have encouraged investment on a scale that was unimaginable 15 years ago: stainless-steel tanks in aircraft-hangar-sized facilities, self-opening doors, automatic temperature-regulating sprinklers, and all the other electronic toys one could wish for. And that’s not to mention on-site tasting rooms and classy accommodation for thirsty busloads of city folk, who are often on weekend work excursions, where the wine flows to the sound of folk music. All this glitter is probably undreamed of by the average proprietor of a family winery in a renowned region such as Burgundy. In fact, money is pouring into wine production as never before in the course of the country’s long vinous history.

That history is indeed long. The lands that now form the Czech Republic have a proud winemaking tradition. Like most of its neighbours, the country proudly traces the arrival of viticulture with the coming of the Roman legions under Emperor Probus in around 280 AD.

There is a unique tradition here, shared with neighbouring members of the Austro-Hungarian Empire, whereby every wine village will have another settlement adjacent to it, composed entirely of wine cellars, in which the local families have produced wine from their own small strip of vines since time immemorial. In the post-war Western-European boom, many Austrian cellars went to ruin; in communist Czechoslovakia, the tradition thrived. It was tolerated by the regime because the privately made wines were officially for consumption by family and friends.

Meanwhile the government, although never daring to interfere with the quality of the national drink (beer) determinedly set about optimising the potential of its vinous counterpart. Great factories were constructed in which state-run cooperatives made it their business to extract maximum quantity, using plenty of added sugar, sulfur and sorbic acid along the way. So much so, that unsuspecting urban consumers came to associate the strength of the hangover with the quality of what they had had the night before; that is, the greater the headache, the better the wine. Such was the perceived wisdom of the time, in a society that was all but isolated from the huge changes in wine production techniques taking place in the outside world.

When the 1989 Velvet Revolution came, the wine business was in an uncompetitive state, not fit to fight against the new products arriving from around the world. Ugly litre-sized bottles were the norm, sealed with unwieldy plastic covers that needed to be prised open with a knife to access the not-very-appetising contents. Labels were ghastly, as were brand names, such as Pražský sklepmistr (Prague Cellarmaster), Hodonínské slunce (Hodonín Sun) or Ostravský kahan (Ostrava Miners’ Lamp). The future looked bleak.

Nor were the public’s expectations very high, since this was how things had always been and would no doubt continue to be. People went on buying the very cheapest products they could find, as there was not much spare money around in the 1990s.

That has, to a great extent, changed over the past 15 years. Quality has improved immeasurably. Society has opened out and with it has come inequality, with some 7% of the population having become fabulously rich, able to obtain the most expensive wines that exist. Lower down the economic scale there is plenty of cash available among the professional classes.

Wine overview

Imports now account for over half of the market. Most are from the major EU producing nations, led by Italy. Since these attract no import duties, there is plenty of room for wines across the entire price range. Wines from the New World – Chile, Argentina, South Africa and Australia – generally need to be between €3.00 and €5.00 to catch the eye, while California is too expensive. About a quarter of all imports arrive from former Eastern Bloc countries, although much of this is in cistern for local bottling or blending with the local product, although €2.00 to €3.00 Moldovan wines in kitsch bottles and of sweetish taste also have a niche. Organic and raw wines are making inroads into the wine public’s consciousness, but remain very much of niche interest, while screw caps are frowned on, being associated with cheapness.

The local industry has begun to consolidate. The market leader is the Bohemia Sekt Group, owned by Henkell & Co of Germany, which — according to a recent Euromonitor report —accounts for a 9% sales share of the market. It has also acquired a number of smaller companies that specialize in still wines, including Víno Mikulov, Habánské sklepy, Chateau Bzenec and Vinařství Pavlov. Other major companies include Chateau Valtice, Znovín Znojmo and Vinium.

In contrast to more-established markets with long-established wine merchants, the Czech Republic has a huge number of active importers. Many do it as a sideline, bringing in a few pallets here and there while conducting their main business in, for example, shoes or lawn mowers. Such businesses will sell direct to the customer, thus cutting out the middle layer. Well-established importers also exist: Bacchus Vins et Champagnes, Global Wines, Kupmeto, Tombalina Wines, Merlot Grands Vins, Riesling & Co to name a few.

Knowledge has increased apace, and today people actually know something about the subject. Specialist publications include the lifestyle-oriented Wine & Degustation and Víno a Styl or Vintners’ Horizon, a trade monthly. Wine festivals and competitions abound and wine courses with tutored tastings are legion. Annual per capita consumption has risen from 15.5 L in 1996 to today’s 21 L. In short, wine has become fashionable, especially in urban centres and among the opinion-makers and trend-setters.

Most wine is either purchased in grocery stores or supermarkets. Of these, the largest is the Dutch subsidiary Albert. The Dutch giant recently acquired 50 stores from Spar, bringing its total number of outlets to 330. Before its recent financial crisis, Tesco had 200 Czech stores, but began closures in early 2015 — sparking employee protests — and is reported to be considering the sale of all of its Eastern European businesses after a fall in sales. In the Czech Republic, Tesco has faced heavy competition from the German discounters, Rewe’s Penny Market, which has nearly 320 stores, and Lidl, with 230. The latter chain spent CZK 1bn ($41m) on refurbishment in 2014 and has plans for further expansion, while Aldi’s imminent arrival has been rumoured for several years.

The German influence on Czech retailing is further evident in over 100 Kaufland supermarkets, some 200 Billa’s, 15 Globus and 13 Makro hypermarkets. Alongside these, local ownership is represented by the Coop chain which operates under several sub-brands.

Wine bars and vinotékas are to be found in most towns now, not just in Prague where the bulk of all business takes place. In many of these, wine on tap is the staple, without which a good percentage of the smaller establishments could not survive. The wine is often poor quality, either being punched up with sugar or watered down, to maximise profit.

What do people drink?

Burčák is another phenomenon. This is partially fermented grape juice known as Sturm in neighbouring Austria, and as its name suggests, the wine is stormy, cloudy and sweet. Low in alcohol, sold after a day or two in the fermentation tank, and subject to few controls, it is hugely popular and drunk in epic proportions in the wine bars, by the roadside, or at special vineyard events throughout the late summer. Burčák is soon followed by the first new wines on 11th November, Saint Martin’s Day, and then by the Christmas shopping frenzy.

Many wineries have their private and corporate clients whom they supply in bulk. One such example is Bettina Lobkowicz, whose winery is situated in the small Bohemian wine region just 30 km north of Prague and is thus within easy reach of the Czech capital. This Swiss-born former banker produces a broad range from 48 ha, from bag-in-box through quality Pinot Noir, to several highly praised sparklers. “After seven years of doing it alone, I am still in the stage of subsidising the business,“ she says frankly. “Three years we were flooded and twice we had severe spring frosts. These were great setbacks. Luckily wine is selling quite well in the Czech Republic these days, though I think that people will begin to buy less but better.”

Most wineries, however, are to be found in southern Moravia, some 250 km away from the capital. In this relatively small area, bordering Austria and Slovakia, wine has always been special. In fact, 96% of the nation’s vineyard area is found here.

White was always the traditional colour, representing more than two thirds of consumption; many drinkers love it sweet, too, not least because the red used to be thin and green. The reds, however, are much improved, while many black grapes are now turned into the latest fad: pink wine. Rosé had always been referred to disparagingly as a woman’s tipple, but no more; the consumption of rosé wine has risen twenty-fold over the last ten years.

While locally produced wine is not cheap — sometimes four times the price of its foreign equivalents — it often sells out. The key here is patriotism. Bohemia Sekt Demi Sec usually sells for over 20% more than a well-known Cava brand, but it’s the one for special events. (It’s made from Austrian grapes, but that’s not stated on the label.) The annual production in the Czech Republic is less than half the annual consumption, which, allied to a patriotic drinking public, keeps the producer in a highly advantageous position.