The European Union (EU) ban on the words port or sherry for wine countries including South Africa has remained controversial since it was implemented.
Having just returned from another insightful trip to Europe, SA champion port-maker Carel Nel believes the EU’s earlier decision may lie at the heart of the port wine industry’s current doldrums.
“There are a lot of similarities between port and whiskey,” says Carel. “Both are high alcohol luxury products; can be enjoyed on special occasions; and, have a history dating back hundreds of years. But there it stops.
“Today, however, the whiskey industry is booming in sales and image while Port is generally stagnant.”
He points out the huge disparity in retail space between the two categories. “Port has tiny shelf space compared to whiskey and even gin. In many cases, Sherry is nowhere to be seen.
“Some sherry and even port producers are making more money out of selling seasoned barrels to whiskey producers than out of the Sherry or Port itself.”
The sales statistics tell the story. Scotch whiskey’s total sales are more than £4,6 billion – 1,23 billion bottles – with port at £499 million. Sherry sales dropped from 22 million bottles in 2005 to 10 million bottles in 2015 (UK). Port sales in the UK dropped 26% in 10 years, from eight million litres in 2005 to five million litres in 2015.
“On the positive side, vintage Ports and aged Tawnies that are generally higher quality have increased their market share of total sales,” Carel points out.
Whiskey producers in the US, India, and China are however expanding production to keep up with demand.
“The Scotch whiskey producers allow their whiskey – both malt and grain varieties – to be blended into foreign whiskeys with fairly relaxed regulations. In some India cases, less than 5% of Scotch is blended into local products while stating it’s a blend of Indian and Scotch Whisky.
“Scotch (and even Irish) whiskey is still regarded worldwide as the pinnacle of quality,” Carel says, referring to the recent sale of Macallan 1926 whiskey that sold for more than R14 million per bottle.
“In contrast, many port producers in Portugal were responsible along with the EU for forcing countries like South Africa and Australia to stop using the word port. They even tried unsuccessfully to stop using of the terms Ruby, Tawny, and Vintage.”
Carel is convinced that instead of port promoted across the world as a quality drink, Portugal is on its own and losing market share to other liquor categories. “Even annual gin sales in the UK are more than £1.6 billion,” he says.
“Portuguese port producers would still have been on top of a much bigger pyramid if the term had been allowed and categorisation simply identifying the country of origin. They would have been the leaders of a much bigger industry.”
South Africa currently imports 52 million bottles of Scotch whiskey and less than 100 000 bottles of Portuguese port a year.
“The situation resembles a legend from the European Middle Ages, of a prince who fortified his kingdom to keep the poor out. A few years later, when spies returned with news of how the outsiders were doing, they could only report the free was in fact doing much better than those within the walls.”
Carel Nel is the patriarch at Boplaas Family Vineyards in Calitzdorp. The farm has a long history of producing excellent wines from Portuguese varieties and ports, thanks to ideal terroir and years of expertise. Carel celebrated his 40th vintage of making wine this year and has spent more than 10 000 hours achieving world-class knowledge and skill in producing port-style wines. He is an authority on the category.
Caption: Carel & Daniel Nel at Macallan