Egyptian Wine Success.

Advice, information and discussion about Egypt in general.

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Hafiz
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Egyptian Wine Success.

Post by Hafiz » Wed Dec 12, 2018 1:30 pm

Egyptian Wine Success.

Wine is a way to make good to very good money on average soils using only moderate water, if you use trickle systems. Egypt has made wine for millennia but the wine of the last 70 years has been close to awful. The local producers, particularly the hopeless ones, have an advantage in wine and in many other areas - import tariffs to protect them from competition from people who know what they are doing - up to 300% with alcohol.

In Egypt good wine needs leading edge skills on engineered grape varieties, superb farming and wine making skills, a lot of capital and excellent marketing. As if that is ever going to happen. It also needs grape varieties and blending techniques linked to middle and upper middle class tastes in the west and in China. As most know there in bankruptcy in mass market cheap wines for the export market so you need to aim for the middle/lower middle - $US20-40. Our yearly growth rates for the market higher than that have been 50%-67% pa. https://www.wineaustralia.com/news/mark ... n/issue-91

Typically, as in most things, Egypt has aimed from the bottom of the market and protected local wine makers, and awful spirits makers with huge import tariffs – 300% in the case of western wine. Protection always works in producing laziness from no competition, no incentive to export a quality product and tariff income for the government.

Wine volumes in Egypt are hard to work out but low – probably about 10-12 million bottles a year which lacks scale compared with a medium producer like Australia, which is similar with a difficult climate but about 100-120 times larger with a big percentage of that in the medium and premium market where Egypt produces nothing in that segment. The total industry in Australia is worth about $6-40 (indirect) billion, employs 140,000 so its bigger than Egyptian tourism and employs about 1/10th-15th of the staff. Its produced on about the equivalent of 140,000 feddans which is a small proportion of the rich Egyptian equivalent that produces little and no exports.

The question is with little and volatile local demand, very small scale, expensive marketing, awful farming skills, low winemaking skills, a difficult environment and an external market that isn’t going to show much interest for Egyptian wines does it have a future other than hiding behind a tariff wall and producing 1-2 star wines. I think not.

Industries can be built from nothing, indeed all of Australian agriculture lacked 5,000 years of experience. The first vine cuttings were brought out from South Africa by that beacon of enlightenment Captain Phillip the first and humane governor of the Sydney convict settlement and a man of science and horticulture. Wine from local vines was sold from the 1820’s. Exports started at the same time and international awards were contemporaneous. The skill base was zero but success in a new climate and new soils was near instantaneous. https://web.archive.org/web/20060828070 ... C/wia.html

By the 1850’s Australian wines were wining gold medals against French vineyards in Paris competitions.

Its an exacting long term project and there are few Egyptian investors or managers interested in either. Typically local investors look for quick and speculative areas or at least one where the Minister’s pen can make you a millionaire overnight. I also think agriculture has low status in snobby Cairo which explains why the overwhelming new agricultural investment in the new areas in the last 15 years has come from the Gulf.

Ideally the industry would benefit from an investment from a wine specialist but that has never happened nor has any major or medium western agricultural/farming company invested a penny in Egypt in 50 years and the latter is very odd and unlikely to change.

Jobs created by wine, assuming manual harvesting, are seasonal and less low skill than you might think, but the skills in the factory, even for lower jobs are precise and demanding. A complicating factor for Egypt is the need for immense volume refrigerated storage of the liquid which can be expensive and electrical service stable. Serious interruptions could be catastrophic. Running the ‘factory’ requires a supply of lower skilled staff competent in medium technology – at least in many places.

What I don’t know is how the industry operates. For example the large Australian industry is spread over an area 10 times the size of Egypt in terms of distance and climate and suffers seasonal wins and losses like Egypt. As a result, unlike the Italians and French but like the US and other places, there is often ‘buying in’ of grapes or juice from other areas unaffected by climate negatives or from areas with a surplus. It is also the case that blending in some good years still requires characteristics from grapes 2,000 ks away – or from next door. As a result of all of this the internal market is very large to meet the needs of winemakers in good years and bad. This is relevant to Egypt and the stability/viability of individual wine businesses because an unexpected heat wave at the wrong time can devastate a harvest but if you can buy from, say, the delta you may have a chance. This system implies a capitalist market, effective transportation and mutual trust which are not strong points in Egypt.

There are some trying although stories are dated and I suspect some have given up.

Reuters runs a very recent story it hasn’t checked about the success of a local wine producer, Karoum of the Nile, The ‘vineyard’ has won 14 international medals, including Bronze at the Decanter World Wine Awards in 2012 and the Challenge Millesime Bio for their Jardin du Nil red wine. They say its located in Gouna/Sawirisville, which is suspicious for heat and water reasons as well as bad soil and that it has a Lebanese manager which is good because I know the Lebanese make often good wine, particularly their reds. They also say its small – which is usually code for business suicide in this capital intensive industry. https://www.reuters.com/article/egypt-w ... SL4N1XX4KS

Oddly the companies website tells another story. They have nothing at Sawirisville, but 500 acres in the Delta – which is huge for a single vineyard – and something in Menia (? Probably Minya) in Upper Egypt – details unclear and its a lot hotter micro climate than the Delta.. http://kouroumegypt.com/?page_id=826#winery

Ownership is impossible to trace and news articles are strangely elusive on this matter. Usually if you win awards the owner wants to be front and center.

They have been going for quite a few years, their web site doesn’t show their vineyard but does show their storage and processing facilities which are modern and expensive stainless steel long rejected by the French wine snobs to their disadvantage and the ‘discomfort’ of drinkers’,
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Alas, and very Egyptian, their bottle shapes and label design are predictably awful but it could be worse if they had the pyramids and sphinx. Grape types are mainly French and some Italian – a bit boring and they stay away from the newish fashion/and big profits for Sav. Blanc and Pinot Noir. Rose seems to be making a comeback – god knows why but maybe connected with the new Barbie Doll image some have of themselves. They don’t do Rose.

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Whilst they claim to be upper end their grapes and wines aren’t or at least aren’t for the export market. Given cheap labor they could even try hand picked hugely expensive Sauterne – if they had the hard to find skills to grow, harvest and make this king/queen of wine. Their choice of some/all Biodynamic/Organic systems, whatever that means, is odd and not cheap. Why anyone other than laughs at that dribble Rudolf Steiner (who knew nothing about agriculture or food production) and his madder friend Annie Bessant, I will never know but maybe the bio label works in marketing to urban fools. The bio. part of the industry has a few idiots in it and maybe that accounts for Egyptian success at a number of Bio awards at Montpellier. The Bio status is self certified – just like the mental health of a few of the participants. They have also won prizes at the Decanter show in London but its hard to confirm this.

Worryingly from a management and quality control point of view their head office is in central Cairo. I know of no similar situations for other that wine multinationals in the world but it fits with Egyptian management theory ‘management should never be contaminated by going near where the work is done/money is made’.

Most idiots have naïve and romantic views about wine making and are horrified by stainless steel. However in the emerging production markets – NZ, Australia, South Africa (long established but emerging for a second time from the shadows) Argentina, Chile and of course in the well established new leaders in California its about science, technology and painstaking learning from skilled and elderly growers and wine makers. Even young winemakers in Sicily have got rid of their unchanging fathers and gone modern with effect. Mentorship and training are not highly esteemed in certain countries but is the source of skills in this industry. The Turks do well in the upper middle except on marketing and distribution. To me most Greek wine is awful but I like their Mextxa brandy – even low star versions, if no alternative exists.

Most of these emerging markets understand that there is only one premium mass market and its very expensive reds ($US50-1000) and its China and even the Chinese are hiring westerners to build huge vineyards in its south to cater for this. There is not a single word anywhere that Egyptian domestic producers are interested in exports, the middle or upper market or China. They must have brain damage. A few years ago they were overwhelmingly focused on the tourist market and therefore took a hit after 2011. The dominant low rent coast tourist market that has emerged in the last four years probably isn’t much good for them. In some ways they are like much Egyptian business – concentrate on one market, the home market and all the risk that involves. Most businessmen try to spread risk, but not Egyptians, https://www.xing.com/communities/posts/ ... 1004586770

As at 2009 it was illegal to publically advertise wine, and maybe all alcohol, in the media – such are the freedoms in a secular state or extreme fears about stirring up the Mad Mullah’s who lurk everywhere and no one dares discipline.

In general terms white wine is difficult to produce in hot dry climates so someone should tell the Egyptian geniuses, none of whom have ever worked in a proper vineyard, to stick to reds.

How much Egypt exports isn’t clear and its website mentions only the Egyptian market and in typical florid language. There is no money and small profits in the Egypt market.

Here is a press photo from 3 years ago of their vineyard at Karm al Nada north of Cairo. Note the line of trees which might be to reduce wind/evaporation from wind, the veiled female worker, the primitive carrying equipment, and the stunted vines and gaps in line of vines. Its flood irrigation, not modern trickle, and the vines have no mulch or black plastic around them to save water/inhibit evaporation. Seems primitive and badly managed.

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The Gianaclis Vineyards were nationalised in the 1960s,after which the quality of the wines declined until Al Ahram Beverages Company (ABC) took over the vineyards in 1997 and started to revive the winery. Today, Gianaclis Vineyards is the biggest modern winery in the region, producing a variety of wines for the Egyptian market. The company is now part of Al Ahram Beverages Company (ABC), a Heineken International company. What Heineken know about wine let alone wine in a harsh climate wouldn’t fill a postage stamp. They are superb at one thing monopoly and control 90% of the Egyptian beer market protected from the real world by astronomical tariffs. Its like a license to print money – whilst you sleep.

They do/did vineyard visits for Cairo based western tourists which included a ‘video screening, the walking tour begins and you are given a fluorescent bib to wear’ which seems to indicate they know nothing about tourists.

Its not only bottles that are tasteless, this is a restaurant on this vineyard that catered for western tours in 2011. I think it failed on the basis of dark baronial Bavarian/Egyptian taste.

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Their vineyards (150 hectares) have straggly vines for a long established planting.

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Flood irrigation not trickle which accounts for the salt in this photograph taken by an informed and enthusiastic French visitor who went there in 2014.

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Their wine/grape types are near identical to the above but their bottles and labels are more mainstream and western.

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Their marketing is shocking, Cheap glasses in the photo, no consistent background and some of it fuzzy, poor lighting etc. If you aretrying to sell something people don't expect/trust you need to try harder - and avoid a Sphinx image.

The Luxor connection. Apparently Heineken have planted 450 acres near Luxor sometime around or before 2009. Does anyone know anything of this huge planting? https://www.jancisrobinson.com/articles/wine-in-egypt

Here is a photo of it from 2009.

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Its hard to interpret the photo but the vines look healthy and prosperous, the poles at the ends of the row are rough and unsupported therefore cant keep tight the long wires which support the vertical growth of the vine, the high poles in the distance imply an unusual way of growing vines which you see in Sicily and other places where the plant growth goes high and starts to cover the lanes like a green umbrella. I’ve never understood this, its not done in hot Australia but maybe it’s a traditional way of dealing with extreme heat. The green wood cross bars I can’t work out. Probably flood irrigation again. Who knows.

The article above is revealing about local laziness and why most Egyptian wines are awful:

“Wines (in Egypt) are produced mainly from concentrate and from imported grapes, mainly out of Lebanon and South Africa”

It’s the standard story on the Egyptian upper middle management class – no risk, quick profits, no long term view, no capital, no skill, few local jobs and lie about the ‘achievement’.

The article, dated, also makes the point that quality control is poor – mainly in the factory and a deal of it to do with cleanliness. Its possible, but the article is confused, that the Luxor enterprise is owned and run by an expatriate Egyptian, Karim Hwaidak of Sahara Vineyards (website now dead), The reviews of his wines are poor, very poor.

Another vineyard – set up then stuffed up by Naguib Sawiris and then flogged to another.

‘Close to the Red Sea, El Gouna is Egyptian winery, EgyBev Wadi. 75 hectares of vineyards owned by a passionate André Hadji-Thomas with its lovely organic cuvée, Les Jardins du Nil. It represents about 15% of the country’s production. Tourism – with the lure of foreign currencies – remains the bulk of Egyptian wine sales and proclamations of principle on the prohibition of wine does not overshadow the production thereof, although alcohol remains a sensitive subject in Egypt.’

Whether its any good Newcastle may know.

If Egypt had a future in wine and wine exports, which its cheap labor gives it an advantage in, multinationals would have invested a while ago. They haven’t and its reasonable to assume that their careful judgment is that Egypt has no future in this product. Not for the first or last time an Egypt with 13 million people on farms proves its no good at farming/marketing/export or ill-suited to the products some fool has told them to grow. In agriculture value adding/premium products are good ideas but requires capital, patience, science, marketing and skills. And a fair bit of luck.

Centrally managed farming in Russia under Stalin and China under Mao was much worse than the current miserable state of Egyptian farming so that should be a consolation.

Already in Australia 3 generation long established vineyards are selling up and moving to cooler/wetter climates, scientists are manipulating grape genes and government is spending money on testing shaded grape vines/vineyards. Interesting times ahead – for those who aren’t destroyed by the present.



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Re: Egyptian Wine Success.

Post by Who2 » Wed Dec 12, 2018 3:14 pm

One only has to travel down the Nile to see all the new vineyards under black netting.
The quality has greatly improved since Al Ahram bought in French vinicultulists.
Which can only be a benefit, but one gets used to Omar Khayam and Obelisk and at £4.87 it's ok!
Iv'e noticed the upper class wines are not that good, being totally honest.
What the 'classes that rule should really investigate is, the tax's raised upon quality Marijuana which in this
Country is deplorable, seeing they have been growing it for thousands of years...
It has to be far more acceptable than Tramadol et al... 8)
Ps: Les Jardins du Nil tastes like it, 'sorry to say...
"The Salvation of Mankind lies in making everything the responsibility of All"
Sophocles.

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