The wine business in Lebanon is experiencing both exciting and testing times. Stephen Quinn reports from Beirut.

Lebanon represents a classic example of the cliche of first the good news and then the bad when describing the wine business. The industry has significantly increased in size over the past decade, consumption has doubled, exports are booming, and innovation is becoming more common. Younger consumers are embracing wine and drinking wine is generally seen as sophisticated.

But as always in the region, political factors create complications. Over the past three years the civil war in neighbouring Syria has limited local exports and tourism, relations with Israel remain fraught, and a challenging and confused political system has seen money move to countries whose infrastructures are considered safer.

Wineries are also suffering from a recent cut in the customs duties for imported wines, after Lebanon and several Mediterranean countries signed the EuroMed agreement with the EU. But Lebanon’s producers benefit from reciprocal agreements when their wines are exported to the EU.

On balance the outlook appears positive. Production costs are relatively low and the industry has seen a surge in the number and calibre of winemakers, with resulting innovation. Local taxes on wine at 10 per cent are low compared with many European nations.

Wine consumption doubled in the past decade from 0.8 to 1.6 litres for each adult. The number of vineyards jumped from a handful a generation ago to 40 as of early 2014, according to the Union Vinicole du Liban (UVL), the association that represents most vineyards. In 2013 the industry was valued at $US 41 million. That year the export market was worth more than $US 14m, UVL said.

UVL estimates domestic production in 2013 was about 7 million litres. That year imports totalled 1.1 million litres and exports reached almost 1.9 million litres. Total consumption was therefore 6.2 million litres for an adult population of around 4 million, which means each adult consumed roughly 1.6 litres. Lebanon’s population is about 5.8 million, according to the CIA World Factbook, but a quarter of those are aged under 14 and presumably do not drink much wine.

Emile Majdalani, commercial director at Chateau Kefraya, agreed the local market was suffering from the geopolitical situation, especially the tensions in Syria. “Producers are therefore led to increase their export activity, developed in about 50 territories worldwide with main markets in the UK (32 per cent), France (17 per cent) and the US (14 per cent).” Kefraya was established in 1978, with its first vintage in 1979. Only estate grapes are used. The site has 430 hectares, with 300 hectares under vines.

Lebanon is one of the world’s oldest wine regions. The Phoenicians made wine at least 6,000 years ago. Winemaking started in the Bekaa Valley, the historic site of grape growing, but newer regions such as Batroun in the north, plus Metn and Chouf in Mount Lebanon and Jezzine in the south, are witnessing new developments. Currently about 2,000 hectares are under vine and about 25 different international and local grape varieties are being grown.

Gaston Hochar is general manager of Chateau Musar, one of Lebanon’s oldest and best-known vineyards, and grandson of the founder. They both share the same name. Hochar confirmed the wine business had grown in size and quality over the past quarter century. The number of wineries surged “from about five at the end of the ‘civil war’ [1975-1990] to about 40 today”.

Kefraya’s Majdalani said the majority of those 40 joined the industry during the past 15 years, following the example of the five original and still major wineries.

Lebanese winemakers are innovating with a range of wine-related drinks to attract younger consumers. At Chateau Karam, winemaker Habib Karam launched a local form of grape spirit. The Phoenicia hotel, the most prestigious in Beirut, organised several blind tastings of cognac and Chateau Karam’s creation came second. It sells for about $US 105 a bottle. At Chateau Kefraya, winemaker Fabrice Guiberzeau makes a wonderful dessert wine, Nectar de Kafraya, that will delight palates around the world. He also makes superb table wines.

Jalal Nakad, winemaker at Chateau Nakad, released a meska liqueur in April 2014. Meska, also known as gum Arabic, comes from tree sap and has traditionally been used to flavour ice creams and sweets. A year ago Nakad’s winery launched a drink infused with orange and clementine peel.

Local winemakers are moving away from international grape varieties and French-centric styles to make wines with indigenous grapes such as obeideh and merwah. An organisation known as the Wine Mosaic has been working for the past year to preserve indigenous grapes in the Mediterranean region.

Gaston Hochar’s Chateau Musar has produced a white blend of obeideh (66 per cent) and merwah for decades. Musar releases its whites after eight years in the cellar and seven years for its reds. These have become cult wines and museum releases command high prices. The 1977 Chateau Musar red sold for £3.99 a bottle when released in the United Kingdom in 1984. It currently sells for $US 420 a bottle at the winery.

The food and wine scene in Lebanon is booming, aided by a younger generation with money to spend. Thomas Figovc, executive chef of the country’s best-known hotel, the Phoenicia, described wine consumption as “trendy” among a range of generations.

Chateau Karam’s Habib Karam said the country was changing from a place where people consumed arak, whiskey and vodka to a wine-consuming society where much of Lebanon’s wine production was enjoyed internally.

Many hotels, including the Phoenicia, offer serious wine promotions. In early May 2014 Pierre Lurton, the chief winemaker at Cheval Blanc, gave seminars and specialist tasting of his wine and Chateau d’Yquem at the Phoenicia. The hotel sells Cheval Blanc for what it costs them, about $US 470.

Chateau Ksara is easily the largest producer of any Lebanese vineyard – almost three million bottles a year – and exports about 40 per cent of that total.

Jesuit priests founded Chateau Ksara in 1857 but in 1973 the then government forced them to sell to a local company. Ksara has the largest collection of natural caves of any vineyard in Lebanon. It is believed the Roman used the caves to store wine more than 4,000 years ago.

Elie Maamari is the chief winemaker at Chateau Ksara. His first vintage working alone was in 1982, at the height of the civil war. Maamari is proud that even during the war years (1975-1990) the vineyard produced a vintage every year.

“When the war started we had a French oenologist and because of the war his wife did not want to stay in Lebanon. So he was kind of forced to leave but before so he initiated me into winemaking and taught me a lot – even after his return to France he would come back every couple of months to check on how things were going. This spurred my passion in wine so I went to France myself and studied oenology.”

Ksara is present in even the smallest restaurants in Lebanon, and is served on the national carrier Middle East Airlines. Maamari said newcomers to the Lebanese wine industry had a tough time getting into restaurants “because Ksara is so popular and of an assured value”.

Winemaker James Palge has been with Ksara since 1994. He said Ksara has 14 hectares of estate grapes and grows another 400 hectares of grapes elsewhere in the Bekaa Valley.

The twenty-first edition of Lebanon’s main annual food and wine trade fair, HORECA, was held at the Beirut international events and leisure centre in the first week of April 2014. Some participants told me the deteriorating security situation meant fewer tourists were visiting Lebanon.

Wine sales to Syria have dropped because of the civil war. One major vineyard normally sells 450,000 bottles a year to Syria, but last year sold only 70,000. The war has also affected wine tourism. One vineyard near the Syrian border that preferred not to be named usually receives 70,000 visitors a year. Over the past year the number has been closer to 20,000. A neighbouring vineyard has seen its visitor numbers drop from the typical 60,000 a year to about 20,000.

Yet overall the outlook appears positive for Lebanon’s wine industry, and life can only get better once the war ends in Syria. Chateau Kefraya’s Majdalani believes Lebanon has the potential to be recognised as a serious wine-producing country “given the beautiful specificity of its complex terroirs and wines”.

Chateau Karam’s Habib Karam agrees: “Lebanon is gaining a reputation as one of the serious wine making countries of the world.”

Chateau Ksara’s Maamari believes the industry needs to focus on quality because the maximum vineyard surface available in Lebanon is about 3,000 hectares. “That is why quality is very important since we can never compete with volume.”

Words: 1,473. Published in Meininger’s Wine Business April 2014, pages 52-53, and reprinted in Circle Update, the magazine of the Circle of Wine Writers, May 2014, pages 18-19.