Lebanese wine industry going strong…

While waiting for full opening up to European wines, Lebanon is working on improving the quality of its wines, and preparing the way for a Controlled Appellation of Origin label.

Delphine Darmency - Beirut, Eurojar

In Lebanon, wine production is soaring (from 5 to 7 million wine bottles between 2000 and 2009) and the number of producers increased five times during the last 30 years. Since the 90’s, Lebanon is giving special attention to wine-production and sales, demonstrating a strong will to issue new rules and regulations that will govern the sector and give it worldwide visibility.

In 1996, a number of Lebanese producers gathered to form the “Union Vinicole du Liban” (UVL), in order to give a voice to Lebanon's wine producers, bring them together in one harmonized entity and defend their interests. “We had to issue a law that governs the wine production sector. It was also important to build on Lebanon's image as a wine producing country”, says President of UVL Serge Hochar. The UVL successfully lobbied for a new wine law, which was passed in 2000 with the support of the EU (the old 1938 law was thrown out in 1983) and is currently working on the establishment of a National Wine Institute. The UVL aims as well at providing answers to EU interrogations that are related to Lebanese wine exports to its markets. It is to be noted that Lebanon’s wine exports are twice as much as its wine imports, which correspond today to 38% of its local wine production, and still going strong.

In order to enter the European market, the Lebanese wine is subjected to laboratory analyses accredited by the Lebanese authorities, before being validated by an autonomous body that is related to the Ministry of Agriculture. “Entitled Vl1, this form is designed to replace the EUR1. It is a visa that allows the EU to get certified information on the Lebanese wine composition”, says Charles Ghostine, Managing Director of Lebanon’s oldest winery, Ksara, and one of the two major players in the country (with Kefraya).

However, this kind of analysis seems sometimes problematic to Lebanese producers. “If each time we want to send two bottles of old wine to Europe, we have to open two others, it is not worth it”, said Gaston Hochar, from Chateau Musar.

The end of the customs protection
On another hand, a temporary agreement focused on the commercial level entered into force on March 1st, 2003, that’s before the Association Agreement between the EU and Lebanon started to be implemented in 2006. This temporary agreement concerns the free movement of goods, particularly the exchange of industrial and agricultural products on the basis of reciprocity. So, it is about reducing import duties between the EU and Lebanon. According to this agreement, import duties on Lebanese wines are abolished when exported to Europe. Import tax in Lebanon on high quality European wines is reduced from 70 to 35%; but from 70 to 56% on entry-level wines. Within 2013, high quality or entry-level European wine imports will be exempted from customs duties.

“We have accepted the agreement with full knowledge of the facts. We should adapt to EU requirements. In order to remain competitive, we are trying to reduce production costs and we are building the image of our brands. We are prepared to enter competitive markets.” With these words, Director of Ksara expresses his point of view but also other Lebanese producers’ state of mind: Lebanon’s wine producers are not frightened by market competition but confident about the quality of their products. “Wine is like painting, says poetically the President of UVL, the consumer’s choice depends on many subjective parameters.”

Today, efforts are focused on improving productivity and strengthening the reputation of Lebanon’s wines that are entering upscale wine markets. According to Serge Hochar, “Lebanon’s wine production is able to increase ten times if the rules are respected, as the wine sector is expanding.”

Multi dimensional support
As a matter of fact, the EU has been engaged within its Neighborhood Policy to achieve these two objectives. Thanks to the Euro-Lebanese Center for Industrial modernization (ELCIM), created in 2001, three experts visited Lebanon within a know-how exchange project. Raja Haber, Director of ELCIM, says that experts’ mission covered three main axes: technical support for local wine production (grape variety, vineyard illness, etc.) to improve productivity, marketing assistance services as well as legal support.

The EU endeavors to achieve 4 objectives through its support to Lebanese producers: shed light on the high potential of the Lebanese wine sector, help create job opportunities, allow the Lebanese wine to enter high quality wine markets and help Lebanon to be member of WTO. “This would facilitate exchanges; it is always easier to rely on one unified international system. This will help ensure high quality of wine”, says the head of Economic Development unit at the EU delegation in Lebanon, Francisco Lopez-Menchero.

The issue of Lebanese wine’s recognition by international markets is crucial. Some producers affirm that “there is no low quality wine in Lebanon”. Lebanon should issue a law that allows obtaining Controlled Appellation of Origin label for a worldwide visibility, “which depends on the government’s efforts”, says Charles Ghostine. This is why it is very important to form the National Wine Institute “that will be in charge of discarding the wine that does not comply with Lebanese quality standards. The quality control is done through chemical analyses”, says Serge Hochar. Concerning the marketing, the objective of the UVL is to consolidate and build on Lebanon's image as a wine producing country by highlighting its history and promoting its potential.

The President of UVL says that the sector is still facing numerous challenges, among which a decrease in wine consumption in Europe, the necessity of restoring balance between wine consumption and potential health concerns, and the necessity of increasing wine production. According to the President of UVL, the fourth and major challenge is that “the Lebanese wine must reflect our cuisine, our culture; we do not have a wine culture yet. It existed apparently during the first millennium, but it disappeared with time. We should now give a proper identity to Lebanon’s wine.”