Bulgarian winemakers pin hopes on quality

Mon Dec 22, 2008 7:15pm EST
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By Tsvetelia Ilieva

BRESTOVITSA, Bulgaria (Reuters) - Bulgaria's economy is fast losing steam, exports are shrinking and corruption is threatening the European Union aid that has underpinned growth. But the Todoroff winery has a strategy.

"We expect a collapse which we will try to overcome with high-quality wine," says its manager Kiril Izmirov.

Wines from the Balkan country have been known more for quantity than quality, and Bulgaria now accounts for only 0.6 percent of world production.

Boutique wineries such as Todoroff, which have made use of European Union funds in the past five years to recast Bulgaria's reputation, hope a mix of Thracian mystery and top-quality grapes from one of the world's oldest winemaking regions will help.

Perched on the hillsides of what was once the heart of ancient Thrace, Todoroff includes a chic hotel that offers body therapy based on grape products. Its bet is that consumers will keep drinking wines and, even if overall prices come down, good quality at a reasonable price can survive.

Financial problems and an economic slump in Bulgaria's main export markets -- Russia, Britain, Poland and Germany -- are likely to reduce sales abroad by about 30 percent this year, says Radoslav Radev, managing director at Vinimpex, Bulgaria's biggest wine exporter, controlled by Belvedere of France.

Tighter credit has cramped the wine industry's investment plans globally and consumption of expensive drinks has suffered. Analysts say demand generally will remain high, however, and financial turmoil opens the way to consolidation and efficiency.

"The view is that consumers would not walk away from wine because it is considered by many as a luxury for the masses," said Arend Heijbroek, a wine analyst at Dutch Rabobank.   Continued...

<p>Yordan Stefanov, executive director of Vinzavod Asenovgrad, poses for a photo after an interview at the winery's wine-cellar, some 170km (106 miles) east of the capital Sofia in this November 17, 2008 photo. Picture taken November 17. REUTERS/Stoyan Nenov</p>