Tokaj Wine

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Restoring The King of Wines

"Under communism we wanted to be known as an iron and steel country. It's terrible how can an ideology change people," said Laszlo Koradi, technical director of the French-owned winery Disznoko Kft in Tokaj, the region in Hungary where the "King of Wines" is produced. "Agriculture fell out of fashion and so did wine."
Today the Tokaji-Hegyalja region, where the centuries-old aszu is produced, tries to recover its name and fame. The region produces 20 million liters of wine a year and, in good years, up to a total of 3 million bottles of aszu and szamorodni.

Communism left its mark

Since the 1940s The Bor Kombinat (the state-owned winery) had a quasi monopoly over the production and commercialization of Tokaj wines. Until the fall of communism, it owned 1,600 hectares of vineyards, thus eliminating competition and bringing uniformity to the more than 28 varieties of Tokaj wine. The wine was exported mainly to the Soviet Union - 20 to 30 million bottles were bartered every year for mineral or industrial products. But the Soviets consistently wanted larger quantites and the wine quality slowly went downhill.
Simply shipping the wine by railway meant employment for people. 2,700 persons were working in three shifts to reload the wine in the different sized Russian trains.
"It was more practical to sell them a cheaper wine," said Istvan Szepsy, former manager of the cooperative of the Mad vineyards and now a relatively succesful private aszu wine producer. "But even this was was better quality wine than they were paying us for.

My conscience is clear, we sold a 5 putonyos aszu for $4-5, now I sell it for $60-70. However, quality remained important to us."
"Before '89 we also produced extremely high quality wines," said Andras Urban, deputy president at the National Wine Experts Committee. "Today's '64, '68, '83 or '88 aszus or Szamorodnis fetch a very high price."

With the collapse of the Soviet Union the company was stuck with its huge lines of bottling machines, a large number of employees and a large quantity of unsellable wine. Total sales plummeted to 12 ,000 bottles a year.

Rebuilding the past

In 1990, the government began to privatize Bor Kombinat, hoping to revitalize the old structure that existed for three centuries before communism.
Negotiations took place with various foreign investors, principally from France and Spain, and initial foreign investment in Tokaj soon reached 1 billion ft.
In 1992 AXA, the largest French insurance company, bought the 40 hectare Disznoko estate and turned it into one of the world's most modern winery in just three years.
Their initial investment of $4 million has increased to $10 million.
The Royal Palatine Wine in Szegi, grouped previous owners such as Michael Habsburg and Thomas Dusoczky. "In our family wine making was an emotional matter," said the latter. "I wanted to rebuild what my family owned. What we got for our compensation vouchers was not

much and not good vineyard soil. We were not given back our property, so we bought new land and cellars."
The main problem today is to regain the western markets. "This is not an easy work," said Dusotzki. "A market quickly forgets you. All we can hope is that in the next 10 years we will be able to recover the quality and fame the wine once had."
For The Royal Tokaji Wine Company of Mad -a company of mainly British capital with a $2.5 million investment -the returns had just started to go upwards. "We might make a profit in the end," said general manager Sandor Tompa, "It will take a long time to sell the world such quantities as we sold in the past to the USSR."
Moving toward that goal the company made an agreement with American Airlines to sell them Tokaj aszu. "This gives us confidence in the future," Tompa said.

Foreign techniques criticized

Though Tokaj aszu is only 10 to 30 % of the whole Tokaj production - most of the production is lesser-quality table wine - the intention of foreign investors to add sulfites to the wine, rather than pasteurize it, to prevent re-fermentation, raised a lot of commotion. The old way was to let the wine in barrels for more than three years and not aging it in bottles after this time. Disznoko officials say the barrels add an inconsistent wooden flavor that Western consumers dislike.
All quality wines have to get the approval of the National Wine Experts Committee.
"Foreign investors produced very perfumed new wine styles like the Tokaj Furmint and Harslevelu (dry white wines) through speeded up reductive methods," said Andras Urban. "But the quickly matured aszus didn't get our approval. We still argue with new owners. We have made aszus for more than 3 centuries. We don't want them be confused with other liquorous wines."
"In '95, when the National Wine Experts Committee refused of our '92 aszu, some newspapers articles [published in France] - which we didn't want at all - irritated many people," said Dominique Arangoits, general director of Disznoko Kft. The articles reported that Disznoko's wine had not been certified. "But after our second presentation in front of the committee, 70% of our wine was accepted in a most normal fashion, due to these articles."
Nevertheless other wine specialists like Jozsef Domotor, production manager at the Grape -Wine Council, an association representing the interest of its 114 members, small wine makers or sellers, to the Agriculture Ministry,

who said that: "The French reductive technology is new for Tokaj Hegyalja. I think this is the right path to follow."
"We have divergent opinions concerning the way to produce aszu," countered Laszlo Gerwald, general director of the Tokaj Kereskedohaz Rt. (Trading House Company). "We keep the aszu in barrels for as many years as its puttonyos plus two years. It may not be good business, but we stick to traditions. May the best win!"
Disznoko won the silver medal with their '92 wine at the National Wine Festival in Budapest and the gold medal at the local competition in Tarcal. "This recognition reassured us," said Arangoits. "It meant the Hungarians recognized our wine as Hungarian wine."
But Attila Talos, director of the Wine Society in Budapest, said, "Things are not black and white. We sold the 1988 Bor Kombinat aszu in England and the feedback was terrific. But it seems that clients prefer the new reductive wines."

In '95 14 grand crus (superior wine) producers established the Tokaj Renaissance association to promoteTokaj wine. "We have a common need for promotion marketing activity since the wine has to be newly introduced at home and abroad," said its president Andras Bacso, also the director of Spanish-owned wine company Oremus. They participate to international and regional wine exhibitions, and organize wine tastings.
"We got many people to taste the wine," says Jean-Michel Cazes, director of Disznoko Kft. "We make wines in Bordeaux, in Portugal and in Burgundy, and clients listen to us when we say that we also have a good wine in Tokaj."

Small-time owners should band together

Foreign investors brought important technical modernization that makes grape farming easier. But the small producers - ranging from 10 to 16,000 -are on the verge of bankrupcy. "Those who live out of honest, everyday cultivation of grapes can not cover such investments," said Bacso. "There is not enough credit from the state or elsewhere."
The vineyards are old and many of them had to be reworked. The density of the vines is very low - 2,800 to 3,500 vines per hectare -while the Hegyalja tradition is 6,000 to 7,000 vines.

Originally, the vines were worked only by hand, but when there weren't enough workers the communists brought in tractors, so they had to cut every second, even third line of vines to make room for the tractors.
There are problems affecting the whole of Hungary, not just in the Tokaj region, said Csaba Horvath secretary and oenologist at the Agriculture Ministry. Selling grapes is ten times less profitable than selling wine and does not provide enough capital to develop wineries further.

Hungary produces around 4 million hl wine every year from its 131,000 ha, in '96 3 million hl were sold in Hungary and 1,1 million hl were exported.satisfied."
Agriculture exports are subsidized - in 1996 the government put 40 billion fts toward all agriculture exports, including wine. Thus wine producers got for the wine in bulk with 4 fts per liter, for quality wine in bottle 30 fts per liter, 40 for Szamorodni and 100 fts for aszu.
But small subsidies - around 12 billion fts - for the development of vineyards and the purchase of wine making equipment have soon dried up. "Demand is larger than the funds available," Horvath said. "Consequently that by the middle of last year we ran out of money and only those who had applied for subsidies up to then could be satisfied."
This provoked great disappointment, said Domotor. "Many had bought the seedlings but couldn't plant them. They lost money instead of gaining from the state subsidy!"
Another disadvantage for the small owners is that the ministry has subsidized the replantation of 1,000 hectares of vineyards, but just for those farms of more than 100 hectares. "We cannot help those doing it as a hobby," said Csaba Horvath. "We advised them to form associations that would consolidate all their business activities to apply and take advantage of their rights for receiving subsidies."

A nostalgic look back in time

There still are possibilities for investment.
In Tokaj Hegyalja around 3,500 to 5,000 ha of uncultivated terrain are fit for grape production.An additional 30 to 40 companies, each with 100 ha, could be established.
There are already successful small entrepreneurs such as Istvan Szepsy,

whose ancestors made wine for 400 years. Since '91 he has worked his 5 ha vineyard alone. Most of his aszus are exported. He produces 3,000 bottles a year at $ 60-70. "Nevertheless we live worse than in the '70s and '80s," he said. "Until now, I covered my investments and maybe next year will bring a bit of profit.
He said the region could produce 2.5 to 3 million bottles of aszu a year, but there is not enough demand yet on the Western market. "To produce large quantities of high-quality wine, we need to introduce new technology, but there is no money,"he said. "Those who have small vineyards and no professional agricultural schooling can not survive on the market independently. The foreign investors make a huge advertising work for the Tokaj wine, so for long term it's good for everybody, but currently the masses cry out for the past Bor Kombinat."

Years of hardship before profit

Foreign privatization of the Tokaj Hegyalja region involved roughly 400 ha, 8-10% of its total vineyards. From the remaining vines of Bor Kombinat, 50% was distributed to its employees and 40% returned to those who owned the land before nationalization. The assets and 70 ha vineyard stayed with the Kombinat renamed Tokaj Kereskedohaz Rt (Trading House) and are now managed by The Privatization and State Holding Company or (APV Rt.).
"The region needs leadership that can advise small entrepreneurs and unite them," said Szepsy. Tokaj Kereskedohaz, according to Szepsy was not given enough capital for a new start. The APV Rt is irresponsibly neglects the company. No one checked what's going on here for the last four years."
However Bela Szabo, deputy director of APV Rt., said everything works well. The Kereskedohaz made a profit in 1996 for the second year. After the '93 loss of 700 million fts, it now has total assets of more than 3 billion fts.
"We also have to think about the mid-quality productions," said Gerwald. "Most years at Tokaj areonly average for wine, not good for aszu, and the best buyer for it is the Eastern market." The Eastern market is picking up - Kereskedohaz sold 2 million bottles in 1996 at $2.50 each. "The company will stay in the state's hands to further fulfill the role in the integration process," said Szabo.

"To bring profit to the state and employment for the people. There aren't many industries in the area, and it's a good thing to have such company. I think the workers at Tokaj Kereskedohaz are satisfied."
But of the 2700 workers originally there are still some 470 left. "Our life is hard, Tokaj Hegyalja is economically ruined," said Andras Kamenyiczki, the owner of a 2 ha vineyard in Mad, a region with 60% unemployment.

"I almost feel like saying that it was better when they could give some work to some hundreds of people at the Bor Kombinat or in the Mines. Now, many of us live on 7,000 fts a month - the unemployment benefit - for there are no work oportunities in our county. They buried the great name of wine together with my grandfather. Those of us who have been grape cultivators for a long time won't give up even now, though the gain is almost zero."
"Whoever goes into this business must know it asks for time and money," said Tompa. "Years of work are needed until it turns profitable. Whoever doesn't know or want to know that will go bankrupt, for he's not capable of surviving."
According to Szepsy the state has a responsibility to help the farmers. The small enterpreneurs will go bankrupt if the state doesn't subsidize them. "Of course the state can say 'well, they asked for democracy, they should eat what they cooked now,' but the small farmers were misled during this transitional period, no one thought they would head straightly towards destruction. This doesn't interest anyone now. All politicians just fear their personal power. The government doesn't realize this region is one of our national symbols."

Grape prices spur wrath

Grape selling is a contentious issue over which small entrepreneurs are battling large businesses.
For the first 3 years in this decade grape prices fluctuated around 20 fts per kilogram, with no significant price difference according to quality. This meant total loss for grape cultivators since the price of tractor work, pesticides and fertilisers grew. The grapes price went higher lately - good quality grapes are many times 50-60 forint per kilo.
The Tokaj Kereskedohaz could buy cash 8,000 tons for 300 million forints. In '96 they bought from more than 2,000 small enterpreneurs, but they could work with 5,000.

"This year we bought only from those who had signed an agreement with our company," said Ferenc Marczinko, head of the production and research department of the Tokaj Kereskedohaz. "We want to do the same in the future, so we can ask for quality. This would be good for the farmers too, because the market could then be predictable."
Nevertheless, locals say they were forced to sell for less than they were initially promised before harvest, said Kamenyiczki. "They offered a minimum price of 40 fts per kilo, and then they bought it for 25 fts."
"As in any transaction there are people who are more or less satisfied," Szabo countered. "Those with contracts got the guaranteed price, but those who didn't have a signed agreement, soldtheir grapes at free-market prices, depending on quality. Unfortunately the sugar level was low in such a bad year as this one, so that the price went down too."

Hope despite the odds

Farmers accuse Mad and Hegyalja leadership of corruption.
"The mayor and all the other local leaders make their games among themselves," said an owner of 4,000 vines who wished to remain anonymous. "The average persons don't have the money to enter their deals. They arrange prices among themselves. Those who are not pleasing them, they don't buy from them."
In order to meet European standards, new winery councils were established in '95 at local, regional and national levels. In the Tokaj Hegyalja wine region there are 21 councils with around 16, 500 members.
"We raised a lot of hostility," said Istvan Lesko, president of the Tokaj Hegyalja Winery Council. "Everybody in grape cultivation has to be our member, though it's a voluntary organization. We have to respect the same 'traffic regulations.' The peasants will never make themselves an association to collaborate for a common interest. That's why the law was written."
"The local winery council is a totally dead turkey," said the anonymous producer. "It doesn't work for us. During harvest they just disappeared. Instead of working to raise the grape price, they lowered it without explanation. Why did they establish it if they cannot ensure purchase? I don't know on what grounds the

Ministry of Agriculture conceived this council. Again they force us in everything. Is this democracy? They order me around in my own vineyard. Why?! Slowly they will regulate what should I eat and what not."
"The fact that they told you such stories proves their hostility," closed the matter Lesko. "We are not a buying organization. We coordinate and further information. Since they didn't accept us, they don't hand out any information and we cannot do our job."
"Viticultors are very secretive about their achievement, making our activity impossible," confirms Domotor. "The wine is not a cereal - people have to know the specific qualities of the wines we produce. Information has to be shared, otherwise the world won't accept us. In the future it would be difficult to adhere to the standards of the European Union. We will lose important subsidies." why the law was written."
Despite troubles plaguing the wine industry, the Tokaj Renaissance Association's Bacso has hope. "If there is new work opportunity, people who left for the city during the industrialization period, may return as the vineyards regain their former status," he said. "Wine is the engine that brings the region to life. It can build up tourism all over the year."

Philipos Lithopolou contributed to this report
Various versions were printed in
The Budapest Sun, Nepszava, autumn 1995
The Budapest Week, January 30-February 5, February 6-12, 1997

The wines of Tokaj are classified as:

- aszu - meaning desiccated - grapes are formed through over maturation. Can be desiccated, which normally occurs each year, and desiccated and botrytised - botrytis occurs only during a favorable climate (light rain and fog, followed by fine weather). It is at the origin of great years. concentrated grape berries.
- szamorodni - either dry or sweet - made from a non-sorted harvest containing desiccated and botrytised aszus and concentrated grape berries.
- varietal - these are made from healthy grapes and make for dry or lightly sweet wines (Furmint, Harslevelu, Muscat). These wines traditionally undergo an oxidative process in wooden vats.

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