There are only three great wine countries with continuous culture of fine wine – France, Germany and Hungary,” announced writer Hugh Johnson recently, highlighting that Hungary’s first vineyard classifications in around 1700 pre-date those of Burgundy, with vineyards even mentioned during Shakespeare’s time.
The region of Tokaj has always been in the forefront of Hungary’s fine wine claims, though it is widely agreed that wine culture was killed off during the communist era. After regime change, considerable foreign investment arrived on a wave of enthusiasm for rebuilding the region. Sadly, the last decade has seen this investment grind to a halt and the region is teetering on the edge of financial ruin. Wine is the major industry in this part of Hungary and news that the Hungarian government is to channel €330m into the region shows serious will to do more than just tinker round the edges.
András Tombor, the man heading this huge project, is head of both Tokaj Kereskedőház (also known as Tokaj Trading House (TTH) or Crown Estates) and the Tokaji Regional Development Board and, as such, has huge responsibility in delivering a successful outcome. His background includes studies in classics and ancient philology, then a switch to international economics, followed by roles at EBRD and PricewaterhouseCoopers and as advisor to the Hungarian government, before joining TTH in December 2012. “Wine is the cornerstone of the project, starting with grape producers and winemaking, then everything else to follow,” he says. “But we need to do much more than just show a romantic wine region. It must also be a sustainable economic business, too. The first phase of the project is a complete analysis of all 11,000 ha that are designated for production of Tokaji.”
Tombor expects that this phase should be completed by June 2015. “We’re going to have very accurate information down to every 0.25 ha,” he notes, adding, “We’ve invited French, New Zealand and South African experts over who have been amazed at the depth of analysis, but we need this judgement to learn exactly what grapes should be planted where and what is the optimum end product for viable economic outcomes.” We will know where to direct money for reconstruction and replanting – or to direct unsuitable land to other agricultural products.” Tombor believes the whole region is effectively bankrupt. “It’s quite simple, people don’t make money. They rely on state support and grants to keep them going, and many wineries are up for sale. My job is to turn this around,” he says.
Structural reforms
Tokaj Kereskedőház (TTH) is now Hungary’s only state-owned winery and, until recently, it has held a reputation for poor quality and cheap pricing, undermining the region’s attempts to better itself. Multiple attempts to privatise the company in the past have failed, partly due to the huge number of small growers it effectively supports in a region with little other rural employment. Some producers believe the operation should have been allowed to fail, but the Hungarian government is now committed to retaining the winery in state hands, recognising its role in providing social and economic support.
However, reforming this business is critical to the whole region. As Tombor points out, “TTH is responsible for buying one third of the region’s grape production and for producing 40% to 50% of the region’s wine output, so everything starts here.” He goes on, “This way we can help around 2,000 people stay in the wine business and teach them new skills and about new technology in wine production. We’ve made a completely fresh start at the winery too,” explains Tombor: “We have a new winemaker, new equipment throughout, and we won’t reproduce lesser-quality wines.” There’s a major audit of wine stocks underway, partly prompted by a legal case in the US of a Tokaji Aszú that was not the vintage purported on the label, and suspect stock has been recalled from the trade. “Poor quality stocks will be destroyed or sold without the Tokaji name – we are not keeping a single bottle of this old stock.”
New production regulations introduced from 2014 are also important in setting new, higher- quality standards. “We have redesigned Aszú as a true flagship – it’s always going to be there as the most limited and most premium wine so the new regulations started with this,” says Tombor. Aszú wines with sweetness levels below the previous 5 Puttonyos standard of 120g/L residual sugar have now been banned, as has the Aszúeszencia category. Mention of the Puttonyos number is no longer required, though still an option, and bottling within the region is now mandatory.
Traditionally, and confusingly for the consumer, Tokaji has been sold in various sweetness levels from 3 Puttonyos to 6 Puttonyos. This was based on the historic measure of the number of wooden buckets or ‘puttony’ of Aszú berries added to base wine – the more the sweeter. More recently, each Puttonyos level conformed to a minimum analytical measure of residual sugar. “There were too many products and a lot of confusion previously,” says Tombor.
Use of grape concentrate to sweeten Tokaji has been forbidden – previously TTH was one of the biggest users of this product. TTH has also introduced a new payment system with a price incentive that Tombor hopes the region will adopt. “We offer a 40% premium for higher quality, provided growers sign up in advance, and in return they get help in the vineyards for free.” In 2014 he reckons around 10% of growers signed up to the programme. “I think people didn’t believe us,” he says. “For 2015, the campaign started in December, and we already have more than 10% signed up so I’m hoping for up to 30% participation, and a turnaround in attitudes to quality.”
Tombor is also an advocate for the future of encouraging small shareholders in the company to strengthen their commitment: “But I won’t do this upfront,” he says, adding, “growers have to show that they are strong supporters of our new standards over several years and take on long- term contracts.”
The next step is the marketing and branding project, which Tombor believes is critical, as people in this area have little choice of alternative employment. “There must be a market for the wine at a price that will give economic returns.
We have to get away from making people poorer and poorer.” Marketing efforts and quality initiatives in Tokaj over the past few years have tended to be piecemeal efforts led by a multitude of different groups with their own agendas, and too often insufficient funding. Working collectively can be difficult in a country where memories of enforced collectivism are all too recent but, as Tombor says: “My job is to convince smaller associations and even individuals – but it's a big challenge as everyone hates change.”
How it will happen
Tombor was elected head of the new Tokaj Regional Development Council (TRDC) in July 2014, which brings together representatives of County Council, the Tokaj Council of Wine Communities, the Supervisory Board of Tokaj Crown Estates (TCE), and the Ministry for the Economy and the Prime Minister’s Office. In particular, he cites a close working relationship with the Tokaj Council of Wine Communities: “That meant that the new quality regulations could be agreed.” He added, “I see so many organisations fail because no one could bring all the participants to work together, but I am telling them they all need to get into the same boat – there’s no room for smaller communities stepping out.”
For Tombor, rebuilding a market for Tokaj and developing unified branding is important. He has set up the Tokaj Marketing Board with delegates including winemakers, and national and international wine branding and marketing experts, with the aim that it will be “a unified and – indeed, only – marketing body for the region.” The first steps of this project are already underway with in-depth market research in 10 key markets, in conjunction with Claessens International. Some early research findings show that Tokaji is listed by 29% of the Michelin-starred restaurants in the UK and 20% in the US, while this drops to just 5% in France, Germany and China.
The research will lead into shaping the creative side of the project. “Together we will decide on the future shape of the Tokaji bottle, based on research and data,” says Tombor. Labelling policy will also be developed based on this research, and this will be mandatory for the whole region. A programme of external marketing events will follow, starting this year. The Board plans to target wine experts and premium product traders with seminars, master classes and exclusive meetings. “These events are open for every winemaker in Tokaj and we expect to involve as many stakeholders as possible.”
It doesn’t stop there though; future plans include changing wine control procedures and ensuring the tasting approval system is free from bias. Tombor also has visions to develop tourism and wider infrastructure. He says: “We have a beautiful region, with rivers, scenery and wineries, and while I agree that hotels and restaurants are not great, to improve there has to be an economically sustainable demand for the long term.” The project will also develop other agricultural sectors, along with industry within the region, and infrastructure (“we want to limit truck traffic,” Tombor says), and will develop activities around the rivers. Finally, Tombor says: “We also have a huge stock of old Tokaji dating back as far as the 1860s – we need to get an expert assessment and valuation, and work out how to use this and how best to keep it.”
Tombor sees an important role for the recently established annual Great Tokaj Wine Auction and has delegated a member of the team to its organising committee. Here exclusive barrel lots from top producers are sold ‘en primeur’, creating interest and awareness of Tokaji’s quality; the third auction will be on 25 April 2015 at Sárospatak Castle. “I can see this helping to create a ‘Friends of Tokaji’ circle,” says Tombor, adding, “I want to attract consumers interested in exciting exotic wine regions; people with an interest in new wines that have the budget to pay for them.”
Undoubtedly, this is an ambitious plan, and there are still dissenting voices in the region. However, for once, this is a project that seems to have the money, resources, and vision to bring the whole region together to put itself back on the wine map.
