University of Cincinnati

UNIVERSITY OF CINCINNATI

Date:______

I, ______, hereby submit this work as part of the requirements for the degree of: in:

It is entitled:

This work and its defense approved by:

Chair: ______

The Role of Wine Production in the Changing Structure of an Island Economy: A Case Study of Santorini Greece

A thesis submitted to

Division of Research and Advanced Studies of the University of Cincinnati

in partial fulfillment of the requirements for the degree of

MASTER OF COMMUNITY PLANNING

School of Planning College of Design, Architecture, Art, and Planning

May 13, 2005

Curt Christopher Freese B.A. History, University of Cincinnati, 2001

Thesis Committee

Chair: Michael Romanos, Ph.D.

Member: Carla Chifos, Ph. D.

Reader: Wayne Durrill, Ph. D. History

Abstract:

The inspiration for this thesis arose out of a summer spent in 2004 on the island of

Santorini as part of the University of Cincinnati’s Sustainable Development Program.

While on this enchanting island, this author couldn’t help but notice the oddly beautiful vineyards that were growing in soil that looked no different from the surface of the moon, nor indulge in a few glasses of wine produced from grapes grown under the incessant pounding heat of a hundred-degree sun. Much to my surprise, the wine had a most fascinating taste unlike anything I had never experienced before. Yet, as the days passed on the island, and I took in more sights of its interesting vineyards on terraces or on hills, and I experienced more of its wine. I became quite shocked with what I witnessed and tasted. Acres and acres of vineyards lay untended with Hotels and Rental rooms built amongst them, and a vast majority of the terraces were crumbling. I also soon unfortunately discovered most of the wine produced on Island was no better than swill.

What was wrong? Why were these vineyards not producing the amazing and delicious

Vin Santo? And finally, the most important question, what can be done to save the vineyards? This thesis is in direct response to these questions.

The hypothesis is that wine, which historically has been a major product and source of income for the island, can once again become an important economic sector. To explore how this change can occur, two successful models were selected for inspiration and comparison to the present-day Santorini wine industry to suggest new wine scenarios. And the rich history, wines and viticulture of the island was reviewed and analyzed to develop a new wine-marketing strategy based on the uniqueness of Santorini.

Acknowledgments

This thesis grew out of a memorable summer as part of the 2004 University of Cincinnati

Sustainable Development Program in Santorini. I would like to thank the leaders of the program, especially Prof. Michael Romanos and Prof. Carla Chifos, for leading me down the right path. I would also like to thank The Municipality of Thira and Mayor Angelos

Roussos for being so gracious and putting us up for the summer. Without the help of many of my colleagues, I would never have completed this thesis. Thus, thanks to the talented Michael Steele for creating many of the maps. The wonderful Hayfaa Wadih for her knowledge and expertise of Santorini and tourism. Andy Meyer for his many pictures and ideas. The lovely Yana Yablonovskaya for offering her time and putting up with me while formatting my rather lengthy thesis. And finally, thanks to my family and their unwavering support.

Table of Contents

CHAPTER 1: INTRODUCTION...... 1

1.1 Purpose of the Study...... 1

1.2 Focus of the Study...... 2

1.3 Problem Statement...... 3

1.4 Methodology ...... 5

1.5 Outline of the Thesis ...... 8

CHAPTER 2: ECONOMIC HISTORY OF SANTORINI’S WINE INDUSTRY .....10

2.1 The Early Minoan History ...... 10

2.2 Wine History from the Great Eruption to the Roman Empire ...... 12

2.3 Byzantine to Venetian Times ...... 14

2.4 The Wine Industry from the 17th century to 1821...... 17 2.4.1 Santorini in the 17thcentury...... 18 2.4.2 Santorini in the 18th Century...... 19 2.4.3 Wine Market 16th-18th Century...... 21 2.4.4 Change in Wine Market...... 24

2.5 Wine from 1821-1880’s...... 26 2.5.1 Changes in the World Wine Market ...... 26 2.5.2 Production...... 28 2.5.3 Rise of High Quality Estate Wine...... 29 2.5.4 Santorini, 1821-Late 19th Century ...... 30 2.5.5 Rise of Shipping...... 31 2.5.6 Quality/Transport...... 31

2.6 Wine from the Late 19th Century to 1956...... 34 2.6.1 Phylloxera ...... 34 2.6.2 Government Intervention and World War ...... 35 2.6.3 Transportation...... 36 2.6.4 The Santorini Economy From the Late 19th Century to 1956...... 37 2.6.5 Resurgence of Santorini Wine from World War I to 1956...... 43

2.7 The World Wine Market 1956-Present Day...... 44 2.7.1 Quality/Modernization...... 45 2.7.2 Marketing...... 47 2.7.3 Santorini 1956-Present Day ...... 48 2.7.3 The Rise of Tourism as the Dominant Economic Sector...... 49 2.7.4 The Wine Industry ...... 51 2.7.5 Production/Quality...... 51 2.7.5 Appellation of Origin...... 53 2.7.6 Production...... 54

2.8 Wine History Findings...... 55

CHAPTER 3: THE WINE OF SANTORINI TODAY...... 58

3.1 Viticulture...... 58

3.2 Santorini’s Grape Varietals ...... 68 3.2.1 Assyrtiko...... 70 3.2.2 Athiri...... 73 3.2.3 Aidani...... 76 3.2.4 Mandilaria...... 77 3.2.5 Mavrotragano...... 78

3.3 The Wines of Santorini...... 79 3.3.1 Vin Santo ...... 79 3.3.2 Red Vin Santo—Nama/Mezzo ...... 81 3.3.3 Mezzo...... 82 3.3.4 Red Table Wines...... 82 3.3.5 Assyrtiko...... 83 3.3.6 Nykteri ...... 84 3.3.7 White Table Wines ...... 86

3.4 The Wine Industry and Stagnation...... 87

CHAPTER 4: THE ECONOMICS OF THE GREEK AND SANTORINI WINE INDUSTRY ...... 90

4.1 Wine as Part of GDP...... 90

4.2 Greek Wine Production...... 91

4.3 Wine Production in Santorini...... 92

4.4 Wine Exports...... 95

4.5 Wine Industry Employment ...... 96

4.6 Government Support...... 100

4.7 Wineries ...... 102

4.8 Cooperation ...... 103

4.9 Wine Tourism...... 104 4.9.1 Regional/ and or Government Wine Support...... 106 4.9.2 Wine Networks and Wine Trails...... 107 4.9.3 Brand Equity ...... 107

CHAPTER 5: TWO SUCCESSFUL WINE MODELS: AUSTRALIA AND SOUTH AFRICA ...... 111

5.1 Australia...... 111 5.1.2 Statistics and Production Data ...... 113 5.1.3 Government Regulation/Support ...... 115 5.1.4 Wine Export...... 124 5.1.5 Wine Tourism ...... 125

5.2 South Africa...... 128 5.2.1 Statistics and Production Data ...... 129 5.2.2 Private Industry Cooperation ...... 134 5.2.3 Wine Exports ...... 138 5.2.4 Wine Trails...... 140

CHAPTER 6: WINE MODEL COMPARISONS ...... 144

6.1 Comparison of Australia to Santorini...... 144 6.1.1 Statistics and Production Data ...... 144 6.1.2 Comparison of Government Organizations ...... 145 6.1.3 Comparison of Wine Exports...... 149 6.1.4 Comparison of Wine Tourism ...... 150

6.2 Comparison of Santorini with South Africa...... 152 6.2.1 Comparison of Statistics and Production Data ...... 152 6.2.2 Comparison of Private Wine Organizations ...... 154 6.2.3 Comparison of Wine Exports...... 156 6.2.4 Wine Trails...... 157

CHAPTER 7: FINDINGS/WINE SCENARIOS...... 159

7.1 Do Nothing...... 159

7.2 Creation of a Local Government Wine Agency ...... 166

7.3 Creation of a Private Wine Agency...... 171

7.4 A New Marketing Plan For Santorini Wine...... 173

CONCLUSION...... 178

BIBLIOGRAPHY ...... 179

APPENDIX: GLOSSARY OF TERMS...... 193

List of Figures

Figure 1.1 Present-Day Map of Santorini...... 9

Figure 2.1 Ampelia...... 13

Figure 2.2 Map of Santorini in 1703...... 17

Figure 2.3 1898 View of Vineyards from Pyrgos ...... 39

Figure 2.4 Total Land Area of Vineyards on Santorini From 1731-1999...... 52

Figure 3.1 Viticulturalist Pruning a Ampelia in Winter ...... 61

Figure 3.2 The Volcanic Soil of Santorini...... 66

Figure 3.3 Terraces of Santorini...... 68

Figure 3.4 Assyrtiko...... 71

Figure 3.5 White Athiri ...... 74

Figure 3.6 Red Athiri...... 75

Figure 3.7 Aidani...... 76

Figure 3.8 Mandilaria...... 77

Figure 3.9 Mavrotrango ...... 78

Figure 3.10 Bottle of Vin Santo...... 80

Figure 3.11 Nama...... 81

Figure 3.12 Bottle of Mezzo Wine ...... 83

Figure 3.13 Bottles of Assyrtiko...... 84

Figure 3.14 Bottle of Nykteri Wine ...... 85

Figure 4.1 Agricultural Land Use on Santorini ...... 91

Figure 4.2 Two Maps Documenting Change in Vineyard Coverage on Santorini 1970-2004 ...... 94

Figure 4.3 Old Untended Terraces...... 95

Figure 4.4 Old Time Farmer Amongst Vineyards...... 100

Figure 4.5 Diagram of Wine Tourism Motivation ...... 109

Figure 5.1 Area of Australian Vineyards 1978-2000 ...... 113

Figure 5.2. Area of new plantings vineyards 1992-2000...... 114

Figure 5.3 South African Land Under Vine Cultivation...... 130

Figure 5.4 Wine Grape Vineyards Planted and Uprooted Annually South Africa 1993-2003 ...... 131

Figure 5.5 South African Wine Input/Output 1993-2003...... 133

Figure 5.6 South African Wine Exports in Millions of HL 1998-2003...... 140

Figure 7.1 Vineyard Coverage Pre-1900...... 161

Figure 7.2 Vineyard Coverage 1970...... 162

Figure 7.3 Vineyard Coverage Today ...... 163

List of Tables

Table 2.1 Quantity of Wine Produced and Stremmas Devoted to Vine on Santorini 1970-1999………………………………………………………………………………..55

Table 4.1 Quantity of Wine Produced and Stremmas Devoted to Vine on Santorini 1970-1999………………………………………………………………………………..93

Table 4.2 Selected Manufacturing Employment on Santorini by Company………..97

Table 5.1 Australian Wine Statistics…………………………………………………115

Chapter 1: Introduction

1.1 Purpose of the Study

The inspiration for this thesis arose out of a summer spent in 2004 on the island of

Santorini as part of the University of Cincinnati’s Sustainable Development Program.

While on this enchanting island, this author couldn’t help but notice the oddly beautiful vineyards that were growing in soil that looked no different from the surface of the moon, nor indulge in a few glasses of wine produced from grapes grown under the incessant pounding heat of a hundred-degree sun. Much to my surprise, the wine had a most fascinating taste unlike anything I had ever experienced before. Yet, as the days passed on the island, and I took in more sights of its interesting vineyards on terraces or on hills, and I experienced more of its wine. I became quite shocked with what I witnessed and tasted. Acres and acres of vineyards lay untended with Hotels and Rental rooms built amongst them, and a vast majority of the terraces were crumbling. I also soon unfortunately discovered most of the wine produced on Island was no better than swill.

What was wrong? Why were these vineyards not producing the amazing and delicious

Vin Santo? And finally, the most important question, what can be done to save the vineyards? This thesis is in direct response to these questions.

1.2 Focus of the Study

Small islands in many parts of the world, because of their limited physical area

and resources, have focused their development efforts on tourism. Tourism has been

selected as it best utilizes the competitive economic advantages most small islands

have—unique and beautiful landscapes and environments (Orbasli 2000, 52). Hence, the

selection of tourism as the dominant economic sector is economically feasible; tourism

does allow the development of the infrastructure of small islands, and creates jobs and economic opportunities otherwise impossible (Inskeep 1991, 370). However, there are a number of significant problems when tourism is the only economic sector of an economy.

Tourism, unlike other economic sectors, is an incredibly economically sensitive sector.

External factors out of the control of an island’s tourism industry, can dramatically and negatively affect the tourism industry; wars, weather, earthquakes, economic recessions, terrorism, are all such influencing factors (Williams and Shaw 1998, 40). In addition, the tourism industry is fraught with severe competition throughout the world. In fact, tourism is one of the most widespread economic sectors around the world; thus every small island has to compete with almost the entire world for every tourism dollar

(Apostolopoulos, Loukissas and Leontidou 2001, 7). Therefore, although there is nothing wrong with tourism as the dominant economic sector for small islands, it is obvious, because of the fragile nature of tourism, that small islands must identify alternative economic sectors and sources of income to stay afloat and diversify in off years—to become economically sustainable (Theobald 1998).

The Aegean Islands in Greece are excellent examples of all of the aforementioned small island and tourism problems. The Aegean Islands are largely small, arid islands,

with limited resources; but they also offer one-of-a-kind landscapes and environments.

With nothing to capitalize on but their natural beauty, the Aegean islands have turned entirely to tourism for the structure and development of their economies (Seaton 1994,

818);(Fernando and Rebollo 2001, 50). Within the Aegean Islands, an island that exemplifies the problems of tourism as the only economic sector is Santorini, and it is the island this thesis will focus on.

Santorini is one of the most important tourist destinations in the Aegean—second only to the island of Mykonos (Ministry of the South Aegean Hotel and Rental Room

Report, 2004). This study explores the potentiality of other economic sectors to play a positive role for the sustainability of Santorini’s economy. This study will propose that the wine industry of Santorini has the economic potential, quality, and history to become another significant economic sector, creating a more diverse and sustainable economy. It is hoped that this proposal for Santorini can become a successful model for other Aegean

islands: especially the wine-growing Aegean islands.

1.3 Problem Statement

This study offers an analysis of the history and characteristics of the Santorini

wine industry, and building upon this foundation proposes possible economic development-related wine production and wine marketing scenarios. The story of wine

and the story of Santorini constitute one natural symbiotic relationship between the

people and the environment; wine directly influenced the economic life of the island, and

the wine itself was tied to the dry climate and volcanic soil of the island. In the past,

every aspect of life, from economic, to social, to building patterns, was influenced by the

wine industry (The Santorini of Santorini 1995).

Santorini wine was once renowned the world over; the sweet unfortified dessert wine Vin Santo produced on Santorini, was shipped throughout Europe and even to the

Americas based on its notoriety. The global thirst for the wine created the need for a shipping fleet to quench the demand. The shipping fleet that arose on Santorini became one of the largest and most important in all of Greece. The process for cultivating and processing the Vin Santo was, and still is, unique only to Santorini, was tied to the harsh natural environment and the unique varietals grown only on Santorini. Santorini wine thus flourished because of the comparative advantage its one-of-a-kind wine produced due to its natural environment. Therefore, the reason for the aforementioned analysis is to

give perspective to the importance to the wine industry in the past, and to possibly in the

end, create strategies that will utilize the wealth of Santorini’s wine making past.

In the past Santorini was dominated by a single economic sector: wine. Today,

the economy of Santorini is once again dominated by a single sector, but this time it is

tourism. The island and its vineyards are being overrun by tourism-related over- development that threatens to destroy the natural beauty of the island, as well as its

cultural heritage that was so rooted in the wine industry (Selwyn 2001, 42; Orbasli 2000,

2). The wine industry itself is economically stagnant. The low yields of Santorini wine,

as well as the continuing loss of vineyards to development, have caused a supply

shortfall. There are simply not enough grapes to create and support a large export-based

wine industry. Marketing and promotion of Santorini wine are still in their infancy. The

wine industry relies on the tourism industry to market and buy its wine. Wine tourism is

devoid of networks between producers, marketing, or quality service as exemplified by a

number of other wine-tourism destinations around the world. A large percentage of the

wine produced on Santorini is low quality bulk wine, the production of which creates a situation in which Santorini foregoes the opportunity to produce high quality, high-priced estate wine (Santo Wines 2004; Kafouros 2004). Wine is not one of the major attractions or economic sectors of Santorini-- it is merely an ancillary industry to tourism.

1.4 Methodology

Three methods have been utilized in this thesis: 1) Historical method, 2)

Economic analysis of the modern wine industry, 3) Case studies/comparison based on the findings of the case studies and historical method.

The first method employed is that of the historical method-- used in Chapter 2 and

Chapter 3. The analysis of the history of wine production on Santorini describes the wine’s economic impact and evolution, and how its natural uniqueness, due to the environment and processing created its dominance on a small island for four millennia. I contrast and give context to the development and history of the wine industry, with local and world economic trends for each period of time. The historical analysis will be split into seven significant historical periods: 1) Early Minoan history; 2) Wine history from

the great eruption to the Roman Empire; 3) Byzantine to Venetian times; 4) Wine history

from the 17th century to Greek Independence; 5) Wine from 1821 to the 1880’s; 6) Wine

from the late 19th century to the earthquake of 1956; 7) and finally the Santorini wine

industry from 1956 to today. These historical periods have been selected due to

significant changes in Santorini’s wine industry that occurred during each period. Each

historical period will first describe the issues and data from Santorini, and then compare

and contrast these changes with the changes and data of the wine industry throughout

Europe.

The second method is used in Chapter 4 to examine the economic underpinnings

of the Santorini wine industry today. This economic analysis focuses on wine as part of

GDP; production and its many facets from inputs to total vineyard acreage; exports as

part of wine production and sales; wine industry employment and seasonal employment;

government interaction and support; the existing Santorini wineries themselves;

cooperation and lack of wine networks amongst wineries; and finally a detailed

examination of the current trends, methods, and ideas of wine tourism.

The third method I have utilized, found in Chapter 5, is based on comparisons

with other case studies and models. This chapter uses production, export, employment

data, and the latest wine-tourism studies to compare Santorini to two successful models

of other wine growing regions and countries—Australia and South Africa. The two

models have been chosen as they each have unique qualities that relate to Santorini, or

provide inspiration for a dynamic new wine future.

Australia was chosen, as it is the center of rapid innovation in the wine industry,

especially in production, exports, and in terms of wine-tourism and wine-networks. This

innovation has occurred in part because of large-scale government support and

corresponding private industry cooperation within the Australian wine industry

(Anderson 2004, 272). South Africa was selected for many of the same reasons as

Australia; rapid innovation and increases in production, large-scale exports, and highly successful historically based wine tourism industry, based on wine-trails. South Africa,

unlike Australia, has relied on distinctive private industry support, cooperation, and

leadership for its recent successes (Vink et. al, 2004, 245-247). Hence, the Australian

model was selected as a government support model, and South Africa as the privately supported model.

To successfully analyze and apply the relevant issues of each of the two models, similar issues of both models must be delineated. Based on the existing foundation of the

Santorini wine industry, and taking into account its weaknesses, this analysis in chapter 5

focuses on the following four major issues: 1) statistics and production data; 2)

government/private organization support; 3) wine export; 4) wine-tourism. Each of these

four issues is studied in detail, and is then compared in chapter 6 to the very same issues

in Santorini. By examining these four issues in each of the two models, I develop three

logical and reasoned proposals for the Santorini wine industry in Chapter 7.

The end result of the methods used is found in Chapter 7. In chapter 7, three

potential wine scenarios for the wine industry were created, as well as a new wine-

marketing strategy. These three scenarios were based on the summary and analysis of the

history and present day economic and production factors of the Santorini wine industry,

and the comparison of Santorini to the Australian and South African wine models. The

first proposal is the do nothing, laissez fairre approach to the Santorini wine industry.

The second proposal with inspiration from the Australian model, argues for the creation

of government supported wine and wine-tourism bodies. The third proposal stimulated

by the South African wine industry, calls for the creation of privately supported wine and

wine tourism organizations. The final findings in chapter 7, offer a marketing strategy to

craft a niche market for Santorini wine based upon the history and exclusivity of

Santorini wine. The proposal Santorini selects will in turn shape the future, for better or

worse, of the Santorini wine industry.

1.5 Outline of the Thesis

This thesis is organized into seven chapters: Chapter 1 introduces the project;

Chapter 2 summarizes the history of Santorini and its wine trade; Chapter 3 establishes and examines the viticulture, and specific varietals and wines of Santorini; Chapter 4 provides an economic analysis of Santorini’s present day wine industry; Chapter 5 analyzes specific economic factors of the two successful wine industry models of

Australia, and South Africa; Chapter 6 compares and contrasts Santorini’s wine industry with the findings of the Australian and South African models; Chapter 7 proposes three scenarios for the Santorini wine industry based on the prior research and analysis, and offers a new marketing strategy based on the unique history and wine of Santorini.

Figure 1.1 Present-Day Map of Santorini

Source: Road Editions S.A.

Chapter 2: Economic History of Santorini’s Wine Industry

How Santorini’s wine was affected by Europe’s trends and economic climate is

the subject of this chapter--the economic history of wine on Santorini. To better

understand the economic history of wine on Santorini, this chapter has been split up into sections based on the major historical events and changes in the wine industry: Early

Minoan history, from the great eruption to the fall of the Byzantine Empire; Venetian times; The 17th century to Greek Independence in 1821; Independence to the late 19th

century; from the late 19th century to the earthquake of 1956; and finally wine history

from 1956 to the present day.

2.1 The Early Minoan History

Wine, Greece, and Santorini have a long and storied symbiotic relationship. Wine

is so central to Greece, that it plays a prominent role in the first great work of western

literature—The Iliad. Wine is also central to Greek religion and culture; the Greek god of

wine Dionysus was amongst the most popular deities in the ancient Greek world. His

divine gift of the vine was one of the most cherished gifts of the gods for the ancients.

The ancient historian Diadorus Siculus reports that Dionysus-or the vine- was specifically

from Crete—the island of Minos (Hyams 1965, 69).

The Minoans were the first to introduce the vine to those who became the

Greeks—the Mycenaens. The island of Santorini was a center of Ancient Minoan society

and culture. In 1967, a Greek archeologist Professor Spyridon Marinatos, uncovered the

remains of a large technologically and culturally advanced city on Santorini. The city,

named Akrotiri, was inhabited around 1800 B.C with a peaceful people that based their existence on sea trade. Amongst the ruins of Akrotiri, archeologists have discovered

10 evidence that the ancient residents of Santorini not only enjoyed drinking wine (by way of numerous wine vessels), but also cultivated great deals of wine upon the island

(evidence of grape pips, and charcoal from vine wood)(Doumas 1995, 27). Moreover, many storerooms have been excavated in which rows of pithoi were set into benches and beside them archeologists have found conical rhytons for scooping, measuring, and transferring wine from the pithoi to smaller vessels (Doumas 1995, 32). Wine was of such importance to the trade of ancient Santorini, that special vessels made for the long distance transport of wine have been found throughout the Aegean (Doumas 1995, 27).

In fact, these jars made only on Santorini, account for over 50% of the wine storage containers found throughout the Aegean at the time (Doumas 1995, 27). Hence, wine was central not only to the cultural life of the island, but also was the economic linchpin to the trade and economic power of the island.

In 1640 B.C., Akrotiri and the island of Santorini became forever altered by the cataclysmic eruption of the volcano. Santorini and its advanced culture were destroyed; the island of Santorini was split into five islands; Thera, Therasia, Asperonisi, Nea

Kammeni, and Palaea Kammeni. The volcanic explosion created a large and steep caldera on the largest island of Thera, and on the island of Therasia. Due to the new steep morphological conditions of the caldera, and the preponderance of volcanic ash on the island of Santorini, viticulture was lost during the Archaic and Classical periods of

Santorini (Doumas 1995, 28). An island that was once an advanced trading civilization that traded wine to the “barbaric” vine-less Greeks became a vine-less island itself. What is evident, is that island of Santorini rightfully has claim to the first great wine trading

11 and producing society in history; Santorini once was the epicenter of wine—a history and tradition this author believes the island can once again reassume.

2.2 Wine History from the Great Eruption to the Roman Empire

After the cataclysmic eruption of 1640 B.C., wine and viticulture on Santorini would lie dormant for almost two millennia. The Phoenicians would be the first to resettle on the island in the 11th to 9th century B.C.-- leaving their alphabet behind

(Kourakou-Dragona 1995a, 35). With the arrival of Lacaedomonians in the 8th century

B.C. the two cultures interacted, and this interaction served as a major influence on the formation of the Greek alphabet (Doumas 1995, 28). Santorini was given the name Thera, after the mythic leader of the Lacaedomonians, Theras. Thera was a thriving Greek colony up to the Ptolemaic times; it served as a way station between the Aegean, Crete, and the Eastern Mediterranean (Doumas 1995, 28). However, wine was not a part of its survival or trade during any of these Archaic, Classical, and Hellenistic periods. No evidence of viticulture, or the trade of wine is present during these periods, a curious finding to the esteemed archeologist Doumas (Doumas 1995, 28). It seems Santorini had become a trading center and trading stop-- not a center of the winemaking and trade. One explanation of this interesting trend, points to the location of the Archaic, Classical and

Hellenistic settlement atop Mesa Vouno; a mountainous rocky outcrop unsuited for agriculture, possessing two natural harbors at Kamari and Perissa, and naturally fortified and protected by the mountain (Doumas 1995, 28). The location of this settlement seems to suggest the residents fear of sea based attack and pillage, creating a reliance on food and goods traded to Santorini from outside sources. Hence widespread agriculture and viticulture was neither needed, nor attempted.

However, despite the present lack of archeological evidence, wine was most

likely cultivated in Santorini during the Phoenician times and up to the 15th century. The

evidence of this cultivation is not only the survival of unique wine varietals like

Assyrtiko, but through the continued use of a unique and ancient cultivation technique called ampeliaes. Ampelia is the basket like pruning system employed by Santorini’s vine growers for centuries.

Figure 2.1 Ampelia

Source: The Santorini of Santorini 1995, 37

In the summer the baskets are covered in the green annual shoots to make a protective basket from the wind and sand (Kourakou-Dragona 1995a, 35) This system of pruning is not found anywhere else in the world but on the small Italian island of

Pantelleria (Kourakou-Dragona 1995a, 35). The island of Pantelleria has the same size

and volcanic soil as Santorini, and was also colonized by the Phoenicians and later

Carthaginians in the 9th century B.C. (Kourakou-Dragona A 1995, 35). The Phoenicians

are widely regarded to have perfected and introduced winemaking to most of Greece and

Europe (Kourakou-Dragona 1995a, 35). Hence, as the ancient island of Pantelleria still

also uses this ancient Phoenician technique of growing wine, and Santorini still uses the

very same ancient technique, it can be hypothesized that wine growing and making was

continual on Santorini throughout the centuries (Kourakou-Dragona 1995a, 37).

2.3 Byzantine to Venetian Times

With the conquest of the Romans of the Greek World, Santorini became an island

of little importance. Mention of the island is rare, other than the establishment of a

bishopric on the island during the reign of the emperor Justinian I (Doumas 1995, 29). It

would be odd if wine was not widely grown on Santorini and exported to Rome, as Greek

wine was praised in the most famous songs and prose, and Roman aristocrats considered one glass of expensive sweet Greek wine a necessity for any feast (Hyams 1965). The

Roman Empire however split in the 4th century A.D., and by the 5th century the Western

Empire of Rome had disintegrated. The Eastern Roman Empire with its center in Greek

Constantinople became known as the Byzantine Empire. Not until the Byzantine

Emperor Alexius I (1050) who built the Church of Our Lady of Episkopi in Gonia, is

Santorini mentioned again in historical record (Doumas 1995, 29). Wine and its trade

and production are unknown in this era, but implied through the continued use of

ampeliaes, and the presence of wine varietals unique only to Santorini.

During the Fourth Crusade the island was ceded to the Venetians and in 1207, it

was incorporated into the Duchy of Naxos under the Venetian Marco Sanudo. Sanudo

gave the island the name Santorini, taken from the church Santa Irini in Therasia-- the

only place suitable for anchor at the time (Kourakou-Dragona 1995b, 39). Duke Sanudo,

once again promoted and advanced viticulture, and Catholic Venetian families were

settled upon the island (Doumas 1995, 32). Venetian documents show Santorini became a major stop on the Holy Land pilgrimage tour from Venice; it was a stopping place for

vessels going to Crete and the Middle East (Kourakou-Dragona 1995b, 40). Kourakou-

Dragona believes the only possible reason for Santorini to be a stop-- a dry arid island

without a true harbor, water, or basic foodstuffs at the time-- has to be the one product

Santorini did have: wine (Kourakou-Dragona 1995b, 40). Wine for long journeys was

necessary, as clean water was hard to find, and even harder to transport on such a journey

(Kourakou-Dragona 1995b, 40). A glass of good Greek wine a day was even built into

the contracts of the trips to the Holy Land (Kourakou-Dragona 1995b, 40). Thus, it is

clear the only reason Santorini was of any importance in this period, is for its wine.

From 1296 to 1383, Santorini was to suffer the ravages of a number of wars and

occupations. In 1296, the Byzantines retook the island only to soon leave the island back

to the Sanudo’s. In 1354, the Genoese occupied the island during a war with the

Venetians. Soon the Venetians reclaimed the island, and granted the island back to the

Sanudos, who died out in 1383, to be replaced by the Crispi Duchy. The island once

again prospered, and viticulture flourished, until the repeated occupation and destruction

of the island by the Turks during the Venetian-Turkish war from 1469-1479. After the

conclusion of this war, Santorini was ceded to the Venetian Duchy of Crete, and then

transferred to the Republic of Venice itself. The Venetians once again sponsored

viticulture on the island; again most likely due to the fact that viticulture had continued

throughout these years of turmoil, and Santorini wine was still found to be excellent

(Kourakou-Dragona 1995b, 41). Santorini wine was certainly exported to Venice, as

Santorini’s Vin Santo is found to be quite favored amongst the Venetian nobility, and

other crusaders returning to Europe (Kourakou-Dragona 1995b, 39). Yet, due to the strife

of repeated wars and conquests, the population of the island during the 15th century was

estimated at no more than 800 persons (Doumas 1995, 33). By the beginning of the 16th

century the population had dropped even lower to but a few hundred (Kourakou-Dragona

1995b, 41). Thus the reputation of Vin Santo, as being a high quality and expensive wine

during this period, could largely be because of the very low production of wine possible

with such a small population upon the island.

The island was finally annexed in 1579 to the Ottoman Empire; but the Ottomans

never settled on the island, and largely left the small communities to their own devices

(Doumas 1995, 33). In fact, no feudal Turkish lord ever settled on the island, and

janissaries were never stationed on Santorini (Kourakou-Dragona 1995b, 41). The entirety of the winemaking and trade process was thus in the hands of the locals, not the

Turks or Venetians. Furthermore, with the Ottomans in control of the whole Aegean and

Eastern Mediterranean, sea trade and plunder by pirates was no longer an issue. The remaining residents of Santorini went back to cultivating in peace, the one export good that flourished on Santorini—wine. The centricity of the vine to Santorini’s economy would continue until the turn of the 20th century.

2.4 The Wine Industry from the 17th century to 1821

The wine industry of Europe and Santorini would undergo profound and lasting changes in everything from production, quality, and transport; to changes in tastes and markets that will be detailed in this section.

Figure 2.2 Map of Santorini in 1703

Source: The Santorini of Santorini 1995, 43.

2.4.1 Santorini in the 17thcentury

Because of the weakening and destruction of the feudal system on Santorini after

the fall of the Venetians in the mid 16th century, locals were able to purchase their own

agricultural lands and trade freely throughout the Ottoman controlled Mediterranean. The

Orthodox and Catholic churches and monasteries also purchased a large amount of

vineyards. Upon this newly unencumbered land, the locals grew grapes, barley, and

tomatoes. Yet, wine was the chief product; the only export product—and the only reason

for settlement on Santorini. A French traveler who visited Santorini in the 17th century,

Francois Richard, stated in his accounts, “ There is no fruit, but in summer they have many grapes…the only saleable product which the earth produced was wine” (Kourakou-

Dragona 1995b, 44).

From the 17th century on, Santorini grapes were processed into a wine of very high quality for the tastes of the time; the quality was due to the excellent climate and

volcanic soil of the island in which grapes grow with very little water. A number of

accounts from the 17th century mention that Santorini wine “ is of good quality, it sells at

a higher price than the wine of Naxos or Paros…the wine is sold directly to

Constantinople, Candia, Smyrna, and Chios” (Kourakou-Dragona 1995b, 46). It is

because of the high prices and high quality of wine, that people emigrated to Santorini to

enter the wine trade.

By the mid 17th century the population of Santorini had reached 7,000 people; a

more than 800% increase in less than a century (Kourakou-Dragona 1995b, 42). And the

entirety of population was in some way tied to wine production and trade, as the

Frenchman Richard notes, “ It cannot be denied that this island is poor. It produces no

corn to nourish its inhabitants apart from barley, nor green herbs in any variety to feed its

animals, nor is it watered by any brook or spring…Their common food is rusk, they eat

vegetables and fava, and they very rarely taste meat” (Kourakou-Dragona 1995b, 45).

Thus, life was hard, no other agricultural goods were grown other than for basic

sustenance—and the harsh nature of the land seems to barely provide sustenance for any

crop but the vine and the bean. The climate and the work conditions of cultivating this

wine were so demanding and harsh, a European observer commented that Santorinian’s

were the hardest working people he had ever encountered (Kourakou-Dragona 1995b,

44).

2.4.2 Santorini in the 18th Century

In the 18th century the cultivation of grapes had become an even more

encompassing economic activity on the island. In 1731, the first agricultural records kept

by the Catholic Bishop of Santorini found that 6,000 stremmas of grapes were being cultivated (Danezis 2001, 479). And although vines covered only 24% of cultivated land,

they accounted for over 50% of all incomes (Kourakou-Dragona 1995b, 47). The yield

per hectare of vines produced an income sufficient enough for farmers to pay their taxes,

and offset the deficit they incurred growing cereal crops (Kourakou-Dragona 1995b, 47).

By the later half of the 18th century, vineyards covered the entire island. The reason for this change is largely due to the changing geo-political situation Santorini found itself in. The first Russo-Turkish war of (1768-1774) ended with the Treaty of

Kutchuk-Kainardji (1774) that opened up the trade of the Black Sea—to Russia

(Kourakou-Dragona 1995b, 47). Under the terms of the treaty, majority Orthodox populations under Turkish rule sailed freely under the Russian flag (Kourakou-Dragona

1995b, 47). This provision made shipping, and shipping Santorini wine a very attractive

and profitable profession. Its effect was immediate; every stremma of the harsh

landscape of Santorini was terraced to grow vines wine production (Kourakou-Dragona

1995b, 47). The population according to a 1791 publication, stood at well over 10,000

inhabitants; all living on a land that did not have the water or food stuffs to adequately

support such a population (Kourakou-Dragona 1995b, 47). The French, Swedish, and

Russians all quickly established consulates on Santorini to take part in the wine trade.

The French consulate reported that a huge amount of wine--over 1,300 tons--was

exported from Santorini in the late 18th century (Kourakou-Dragona 1995b, 49).

One can ascertain the explosion of viniculture as the number of stremmas of

grapes cultivated, in 1874 amounted to 48,000 stremmas (Danezis 2001, 479). The yield of the vineyards also experienced a similar explosion; for example in 1731 600,000 kilos

of grapes were cultivated, in 1835 the number stood at 2,160,000, and doubled again by

1874 with a 4,800,000 kilo yield (Danezis 2001, 479). Such a dramatic increase likely

occurred because the Vin Santo wine of Santorini was renowned and thus very expensive

throughout the European world in the 17th and 18th century (Kourakou-Dragona 1995b,

48). The residents of Santorini also had developed new and more efficient ways to

harvest grapes in the harsh climate of Santorini. Due to this increased production and

demand for Santorini wine, residents had the incentive to work hard. The Orthodox and

Catholic Church also became some of the primary actors in this wine boon; by 1841, 39

per cent of vineyards were owned by one of the two religious orders (The Santorini of

Santorini 1995, 202). Economically, wine became of such importance that it was reported

Santorini’s wine paid the taxes for almost all of the Cyclades in the 19th century,

“Santorini contributed 43% of the total tax the Cyclades had to pay on wine and alcoholic drinks produced” (Monioudi-Gavala 1997, 49).

2.4.3 Wine Market 16th-18th Century

The wine industry and Santorini like all trade and economic pursuits, was subject

to the trends and changes in Europe’s economy. The wine industry in Europe in the 16th century had barely changed since Roman times; in fact, in terms of the quality of the wine, the 16th to 18th century wine may have been worse. Wine in the 16th to mid 18th

century, was not anything like the wine of today: wine was watered down, spoiled by

oxidation, and blended with a number of ingredients not found from grapes. In short,

most wine was not very good. To make wine palatable, persons would fortify the wine

with herbs and honey. In addition, the lighter reds and whites we think of as table and

finer wine today, were cheap, low quality wines, generally watered down and flavored,

and drank only by the unfortunate masses. The wines in vogue with the aristocracy; the

wines sung about in songs and poems and sonnets; the wines of great cost; were the sweet

and fortified wines like Madeira, Cretan and Cyprian Malvasa, and Vin Santo from

Santorini. The economic dominance of fortified and sweet wines would continue for

another 200 years.

Why was fortified sweet wine favored, over the French Bordeaux’s, the German

Riesling’s, and the Tuscan Sangiovista’s? The answer has much to do with trade. From

the 16th to the late 18th century, wine was traded in much the same way as it had been

since Roman times. Wine was blended into large storage vessels, that were loaded onto

ships, or wagons, and sent to taverns, and northern countries where the vine could not

grow. These storage vessels were largely made out of large wood barrels; not the large

pottery amphorae of the Roman and Greek times. Unfortunately these wood barrels were

poorly sealed, old, and rotten, and thus any wine stored in them had a shelf life of just a

few months, before it oxidized. Hence, wine was not aged, in fact; most wine was drunk

within a few months of creation to prevent spoilage. Greek and Roman wine sealed in pottery amphorae actually were sealed in a much better way than the 16 and 17th century

counterparts, and thus had a longer shelf life of up to a year. Because of the time, cost,

and risk of spoilage involved in shipping, most of the German, French wines were drank

by the locals where they were grown (Unwin 1991, 232). Thus, the great wine traditions

of wine growing regions in France, Germany, Italy, where the people made wine a

second staff of life to bread (and also the fact wine and alcoholic beverages in general

were resistant to bacteria unlike water, and thus wine and beer were drank as a safe

replacement to water) (Unwin 1991; Phillips 2000).

Sweet and fortified wine however, did not spoil as easily, as the high sugar

content allowed it a much longer life, thus sweet fortified wines could easily be shipped

throughout Europe, and even to the New World (Unwin 1991, 232). Either because of

the fact they could be shipped and incurred a higher price, or because of the long

historical traditions favoring sweet wines that began with the ancient Greeks, sweet wines

were the favorites of the rich aristocracy (Unwin 1991). The aristocracy would spend

great quantities of money on entertaining, and wine was a must have—and sweet wine at

that (Hyams 1965). Cypriot and Cretan wine won all the equivalents of 16th and 17th

century wine tasting contests; these wines found their way into poems, and into the

parlors and dinners of aristocrats who demanded excellence (Phillips 2000). Thus, despite the fact sweet wine from Santorini or Cyprus would cost up to 60 times the price

22 of a local wine, the rich greedily bought and drank up rather than drink the local swill

(Phillips 2000). The trends of wine consumption spread down the social hierarchy; there emerged a distinct division between quality wines and low quality wines. To the rich, expensive and quality wine remained a symbolic element of status. The urban and rural poor consumed the low quality locally made wines (Unwin 1991, 232).

The most favored sweet wine was that made from the malvasa grape (Unwin

1991, 233). The malvasa grape is native to the island of Crete, and needs a hot dry climate with short mild winters to grow. Hence, the malvasa grape could only be grown on Greek islands like Santorini, Cyprus, and Samos, and dry climates like the newly colonized Canary Islands and Madeira. The demand for wine made from the malvasa was far greater than the supply, driving up prices to such a point, that fleets would travel from Greece to England just to sell the wine at incredibly high prices (Unwin 1991, 232-

233; Kourakou-Dragona 1995b, 48). The prices were so high that Greek settlers and farmers re-inhabited the island of Santorini, despite its harsh unforgiving climate, and started to once again grow grapes—including the malvasa grape, and the native grape of the island, Assytriko (Kourakou-Dragona 1995b, 48). The sweet Vin Santo of Santorini made out of a natural process drying the Assytriko grape in the sun, became quite popular with the Venetians, and with many of the aristocrats of the east. Its popularity, as well as the popularity of the Cretan and Cypriot wines, necessitated the creation of shipping fleets to transport the wine throughout the Mediterranean. The nature of shipping on

Santorini will be discussed in detail later in the Santorini section of this chapter.

There were other fortified wines beside those of Greece, although the Greek wines were considered the best—and thus the most expensive. With the creation of

fortified port wines, ships would stop at Oporto, and load up on port wine to be sold to

the aristocrats in England. Spain would also become part of the wine market, by creating

the sweet sherry wine, from a hybridization of a Cretan vine (Unwin 1991, 222).

2.4.4 Change in Wine Market

Innovation, change in ownership, and more efficient production all brought about

by the Enlightenment, Capitalism, and a new political system, drastically changed the

makeup of wine industry. France was the epicenter for this change, and would remain so

for the next one hundred and fifty years. The French Revolution brought about drastic

changes not only in government, but also in vineyard ownership. Large vineyards owned

by aristocrats and the church, were nationalized and bought up by the new French

bourgeoisie (Phillips 2000, 214-217). The aristocrats for centuries cared little for

innovation, or improvement of their vineyards; they were content to merely make the same money on wine on their estates year after year. The church and monasteries suffered from the same problems as well; the monasteries, once centers of wine innovation, no longer could count such large numbers of educated members amongst their ranks as they had in the Middle Ages. Winemaking was farmed out to local peasants. All this technological and productive stagnation changed with the acquisition of vast amount of vineyards by the merchant class.

The enlightenment spirit of rationalism and science also led a number of French chemists to experiment with winemaking. Two French chemists made discoveries that were to change the French wine industry forever: Pierre-Joseph Macquer and Jean-

Antoine-Claude Chaptal.

In 1777 Macquer first discovered that adding sugar to wine would stabilize and preserve wine (Phillips 2000, 195-196). Macquer noticed that under-ripe grapes used by

French vintners were too low in sugar, and too acidic to produce good wine; Macquer decided to add sugar to these unripe grapes, and let the concoction ferment in a barrel for a year (Phillips 2000, 196). The result of Macquer’s experiment was an excellent tasting,

and longer lasting French wine.

Jean Antoine Chaptal took Macquer’s findings one-step further. Chaptal

methodized the process that is now known as Chaptalization--the process of adding sugar

to more acidic unripe grapes (Phillips 2000, 196). Chaptal popularized his method by

writing one of the most important writings ever on wine, The Art of Making Wine

According to the Method of Chaptal (Phillips 2000, 196). This seminal work became

distributed and almost mandatory for all French wine producers by order of Napoleonic

government in 1803; spurred in part by the fact Chaptal was Napoleon’s Minister of the

Interior (Phillips 2000, 196). Chaptalization was thus the result of a complex set of

interactions involving government, wine growers, merchants, consumers, and chemists

that made French wine the preeminent wine throughout the world (Gough 1998).

The new capitalist vineyard owners read and implemented the process of

Chapitalization, producing the balanced French wine one thinks of today, overcoming the

problems of climate and weather that had plagued French wine with un-ripened grapes

for centuries. These new French vineyards could now produce dry wines, not the old

sweet wines of the past. No longer were sweet heavily sugared wines from hot climates

favored by elites and connoisseurs, the new high quality French dry wines became the

standard bearers of quality. The new middle class consumers of French wine became

25 accustomed to bottled wine as well, thus the new chaptalized French wine was now frequently bottled. And consumers quickly took to the lighter and more complex taste of

French wine: French wine no longer needed to be drunk in a few months; blended with a variety of low quality wines; nor supplemented with honey or herbs; nor macerated

(exposing it to skin contact as long as possible) to deepen its color (Gough 1998). Of course many of these quality control problems persisted into the 20th century, but the quality of wine drastically improved in the span of just 20 years. The Continental System of Napoleon spread the new French wine and techniques throughout the Empire, changing European tastes. And after the defeat of Napoleon at Waterloo, the British market that relied heavily on sweet wine from Spain, Portugal, and Madeira, also accepted the new lighter French wine. Thus, the world wine market, shifted its consumption patterns, from the sweet fortified wines that once were the only wines that would hold up during transport and with age, to the new bottled French wines that also could easily be transported, and got better with age.

2.5 Wine from 1821-1880’s

The wine consumption and production trends of the early 19th century continued throughout the entire 19th century. However, a number of new but lasting factors would hit the wine industry for the first time; changing alcohol patterns, and the rise of high quality estate wines.

2.5.1 Changes in the World Wine Market

The 19th century also brought with it, drastic changes in consumer consumption and preferences. Other alcoholic beverages besides wine had also benefited from better and more scientific production processes. As the author Braudel notes, “ The great

innovation, the revolution in Europe was the appearance of brandy and spirits made from

grain—in a word: alcohol. The sixteenth century created it; the seventeenth century

consolidated it, and the 18th century popularized it” (Braudel 1981, 241).

Beer, which had suffered many of the problems in transport and quality as wine,

had drastically improved in quality and could easily be transported. Grain spirits, which

had been developed in the 15th and 16th centuries, had also become better and more

popular (Unwin 1991, 240). The northern European countries that could not grow wine

became especially dependent on their own grain spirits and beer, decreasing their

demands for wine (Unwin 1991, 241). In addition to the rise of grain spirits and beer in

Northern European countries, the temperance movement gathered steam; and would

become a major force in Protestant countries by the turn of the century.

Another major change in consumption patterns was in the quantity of alcohol

consumed by the average person. During the dark ages and the middle ages, alcoholic

beverages such as beer and wine were the major sources of sustenance and clean drinking

water. This was due to the lack of knowledge about the existence of bacteria in drinking

water. People only understood that fermented beverages did not make them sick with

dysentery or other such bacterial ailments, when water made them sick. With new

sewage and water systems resulting from advances in science, the common laborer no

longer need worry about contracting disease from drinking water. Per Capita consumption of alcohol in many cases fell to half its rate a century earlier (Hyams 1965).

For wine based cultures like Italy and France, where wine had become an indispensable

part of every meal, consumption of wine was not too aversely affected; however wine

consumption in other non-wine cultures and countries fell, crippling wine exports for

much of the mid 19th century (Phillips 2000, 229).

Finally, throughout Europe the tastes of wine consumers changed; there was increased demand for wines that were lower in alcohol, fruity, and not as sweet after the

1840’s (Agriantoni 1995, 70). These wines were the products of the new wine technological and quality revolution in France. Wines were now prized for their subtlety, not their sweetness and relative shelf life as before.

2.5.2 Production

Wine production exploded in the 19th century due to the aforementioned property

reorganization and technological innovation of vineyards. In France alone, wine

production went from 51 liters per person in 1840 to 60 liters in 1859, to 77 liters in

1872; a 50 % increase in 30 years (Phillips 2000, 222). In Bordeaux, production

increased even more dramatically: 1.9 million hectoliters in 1950, to 5 million plus

hectoliters in the 1870’s (Phillips 2000, 222). In Spain, the amount of vineyards increased

fourfold; in Catalonia, production increased 600% from 1850 to 1890 (Phillips 2000,

222). In Italy, wine that could not survive the long shipments of the past—now could, and

the number of vineyards dramatically increased. German wines, dramatically improved in

quality with the creation of a customs union (Zollverein) that replaced the old tariffs of

the independent German states. Wine became a mass-market commodity that was no

longer produced by smaller independent owners, but large-scale growers. In fact, France

produced so much wine, the price of wine fell dramatically from the 1820’s-1850’s due

to oversupply (Phillips 2000, 223). Due to the low rates of profit due to low prices, and

profusion of mediocre mass-market wines, small vineyards were forced to create

cooperatives, or sell their vineyards to larger producers. The trend towards large mass- market wineries had begun.

2.5.3 Rise of High Quality Estate Wine

The origins of high quality, high price estate wines go back to the 1855 Paris expedition. Napoleon III requested a classification of the best Bordeaux wines from the wine merchants the Synidcat des Courties de Commerce (Phillips 2000, 235). The association created the cru system: the cru system ranked fifty-eight wines in five

different categories; first growth (or the prestigious Premier Cru Superieur), second

growth, third growth, fourth growth, and fifth growth. These rankings were based on

price of the wine, its district, tradition, and history (Phillips 2000, 236). The rankings

were hotly contested and long lived; Mouton Rothschild was classified as lesser quality

second growth until 1973 when it became Premier Cru Superieur, no other French winery

has changed its classification (Phillips 2000, 236). Complaints that the rankings left out

excellent regions, wineries, and excellent wine all because of the financial and historical

pull of the fifty-eight wineries, continue in France to this day. The concept of the

chateau, or the estate wine named for the family or winery that owned the land, was

derived from the 1855 classification (Phillips 2000, 237). In 1855, with the creation of

the cru classification, only five of the fifty-eight wineries were called chateaus—i.e.

Chateau Margaux, Lafite (Phillips 2000, 237). By the turn of the century, every winery

on the list went by chateau (Phillips 2000, 237). Interestingly enough almost every

chateau name was derived from the nobles that used to own the estate—with the

exception of Chateau Margaux, all of the chateaus were owned by stockbrokers, wine

merchants, and bankers who merely stamped the nobles name on the winery for tradition

and marketing (Phillips 2000, 237).

By the 1870’s the concept of using the name chateau to market and represent finer

quality wines, had spread throughout the wine-growing world. Wineries from as far as

Australia and South Africa were now chateaus. The marketing and justification in high

prices of the chateau classification is obvious from this 19th century advertisement for

Chateau Margaux wine:

The house is in the image of the vintage. Noble, austere, even a little solemn…Chateau Margaux has the air of an ancient temple devoted to the cult of wine…the same words spring to the lips: elegance, distinction, delicacy and that subtle satisfaction given by something which has received the most attentive and indeed loving care for generations. A wine long matured, a house long inhabited. Margaux the vintage and Margaux the chateau are the products of two equally rare things: rigor and time (Phillips 2000, 238).

The origins of the estate wine were thus steeped in a problematic ranking system, and the effectiveness of the chateau and history as a marketing tool.

2.5.4 Santorini, 1821-Late 19th Century

After independence, the economic power of wine made a significant impact on

Santorini. No longer tied to Turkish rule or laws, Santorini businessmen and merchants

could trade and invest freely throughout Europe, a change that had begun with the 1774

treaty of Kutchuk-Kainardji (Agriantoni 1995, 68). The island had 20,000 inhabitants in

the mid 19th century and one traveler remarked, all were either involved with growing and making wine, or were merchants shipping wine (Kourakou-Dragona 1995b, 51). In fact during the reign of King Otto, one government official remarked, “ There was but one marketable product on Santorini—wine—and one market: Russia” (Kourakou-

Dragona 1995b, 51).

2.5.5 Rise of Shipping

With so much wine to be exported, it makes perfect sense that Santorini would develop a large merchant marine fleet. The merchant fleet was created to ship wine, and it emerged as a major force in shipping throughout the Aegean. In fact, in the 19th century Santorini had the third largest merchant fleet in Greece (Kourakou-Dragona,

1995b, 51). The size of the merchant marine fleet at the time of Greek Independence based in Santorini was recorded at 615 ships (Monioudi-Gavala 1997, 49). The merchant fleet shipped all 7,000 tons of the wine that Santorini produced in an average year in the

19th Century (Monioudi-Gavala 1997, 49). Almost all of the wine went to Russia, where

Vin-Santo was the official chalice wine of the Russian Orthodox Church, and a favorite of the aristocracy (Kourakou-Dragona 1995b, 51). Merchant boats even sailed as far as

America, where it was noted that three shipments of wine were carried (Monioudi-Gavala

1997, 49). Thus, the Santorini shipping industry was international in scope, and not just confined to the Aegean. By 1842 Santorini boasted a fleet of 40 brigs, 7-8 schooners, and 100 other sailing ships with a fifteen hundred-man crew based in Oia (Monioudi-

Gavala 1997, 49). This large important shipping industry anchored itself in Oia, a town that was built by the captains and sailors of the ships. The unique architecture of Oia, owes its development to those adventurous and enterprising members of the Oia shipping industry of the past.

2.5.6 Quality/Transport

In 1834, King Ludwig of Bavaria, the father of King Otho, visited Santorini, and found the wine very much to his liking. King Otho commissioned a Bavarian engineer to make a stairway down the caldera for the ships. It was thought that this stairway would

decrease the many transport problems Santorini wine faced (Kourakou-Dragona 1995b,

53). Before the stairway, the transport of wine in bottles was out of the question, as they

would easily break on their way down (Kourakou-Dragona 1995b, 51).

Yet, even with the creation of the new stairway, Santorini wine still retained the

same problems according to a visiting French wine expert named Pegeus: “ the little care

Santorinians devote to wines manufacture or to putting it into clean and suitable bottles

that will not give it a bad taste, as well as the greed of the mariners, whom replace it with

sea-water after they have drunk it; only then will Santorini wine be appreciated and

granted the great sales it should throughout the world (Kourakou-Dragona 1995b, 57).

Pegeus goes on to describe that Santorini would make far more than the 60 francs a

barrel, if the production and quality control process was improved, allowing the wine to

diversify its market (Kourakou-Dragona 1995b, 57).

Other problems were just as serious, especially the lack of aging for Santorini

wine. Wine produced on Santorini was quickly put into barrels after a few months without any other decantation (Agriantoni 1995, 72). This practice was economic in origin, as the producers knew the riper the grapes were, the less yield they would have; thus the 18th century wine was usually of poor quality (Agriantoni 1995, 73). The

Santorini wine producers were in the dark as to the new French discoveries of Macquer

and Chaptal as to the importance of sugar in creating quality wine-- Santorini wine had

luckily been naturally sweet. In fact, the haste to get as much money and yield out of the

harvest, was in large part due to the many numbers of small producers who desired to

make as much wine, and money as possible without understanding how higher quality win could yield higher profits (Agriantoni 1995, 72). Very few wine producers on

Santorini, even bothered to label dates and vintages; this quite antithetical position to the new vintage based French chateau wine market, only proved to make Santorini wines cheaper and of even lesser quality to any other European markets (Agriantoni 1995, 73).

Yet Santorinians did achieve a Pyrrhic victory in their domestic market;

Santorinians did care for their wine better than any place in Greece. This care was in part due to the harsh climate and terrain found on Santorini (Agriantoni 1995, 72). Vines were

planted in quite large distances from each other; the ground was ploughed three times a

year; vines were pruned and trimmed into the special inverted Santorini cones called

ampelias that allowed the vines to deepen; and fertilizer in the way of manure was

applied (Agriantoni 1995, 72). All of these practices were quite innovative for the time,

not found anywhere else on Greece, and produced the possibility of excellent quality

wine. One Santorini winemaker, the De Kigallas family, did attempt to create a modern

export based winery in Fira (Agriantoni 1995, 73). The De Kigallas winery marketed

their wines as red “brousko”—the Bordeaux of the East. The Bordeaux, which was but

an imitation of the new style of French wine, was exported throughout Europe only

briefly, as the style and varietals of grapes did not match the Santorini environment

(Agriantoni 1995, 73). Unfortunately, no other winemaker attempted new scientific methods, or marketing to improve Santorini wine. And by the 1850’s the price of

Santorini wine was dramatically falling, as even the Russian elites had decided to drink higher quality wine from elsewhere (Agriantoni 1995, 72).

The most telling indictment of Santorini wine still rings true today, “ These wines will be appreciated and not sold at their real value until the Santorinians learn how to

make them a fashion on foreign markets. This is because they have the features that can

make them fashionable everywhere” (Kourakou-Dragona 1995b, 60).

2.6 Wine from the Late 19th Century to 1956

The period from the late 19th century to 1956 was a period of profound crisis for

the wine industry. Phylloxera threatened to wipe out Europe’s vineyards; small wineries

closed down as grafting required to save the vines was too expensive; prohibition and

temperance movements decreased wine demand; World Wars destroyed vineyards and

the depression took care of any remaining demand.

2.6.1 Phylloxera

In the 1860’s with widespread circulation of plants between countries, American and European botanists exchanged vine stocks. The importation of American vines also led to the importation of the phylloxera pest that was native to America. American vines had developed a resistance to phylloxera, but they were much inferior as wine producing vines to native European varieties. By 1863, the first evidence of phylloxera was spotted in France; by 1880 most of central and southern France was infected; by 1890 it has spread throughout all of Europe severely damaging the worlds wine industry (Phillips

2000, 284). Phylloxera is a small yellow aphid about a millimeter long that feeds on the roots of the vine. As it consumes sap it infects the root which swells into galls that strangle the circulation of the root; as the sap ceases to circulate, the infected root shrivels and dies, leaving the vine without sustenance (Phillips 2000, 281). The viticulturists of the time found just one way to battle phylloxera—graft their vines onto resistant

American rootstocks. In fact the International Wine Congress endorsed this method in

1881 as the only viable solution to save European vineyards (Phillips 2000, 285).

The consequence of phylloxera was the abandonment of a great many vineyards throughout Europe, especially in Southern Europe; the owners of these smaller vineyards could not afford to graft their vines. Hence, wine supplies sharply dropped, and prices rose correspondingly. Those larger vineyards in France that could afford to graft, by the

1920’s became incredibly productive with yields of over 72 million hectoliters; far more than the demand, creating a wine glut that would continue until WWII (Phillips 2000,

298). To support the smaller farmers, in the 1920’s and early 1930’s, the French and

German governments sponsored wine co-operatives that allowed these smaller producers to pool their resources (Macdonough 2000, 28). The co-operative idea was also adopted in other countries, including Greece, where in 1934 the Greek government set up the first co-operative in Samos. In 1937 the Wine Institute of the Ministry of Agriculture was created (Cobb 2005).

2.6.2 Government Intervention and World War

Another problem phylloxera created was widespread fraud: winemakers labeling their inferior wines as Bordeaux and Burgundy to capitalize on the high prices and low supply of fine wines. To combat this problem, the French government created the appellation controlee system in 1908. The appellation controllee system was a set of regulations that established distinct regions for wines, that continues to this day. In 1935, a comprehensive Appellation of d’Origine Controlee was passed that regulated even the varietals covered by Appellation regulation for each distinct region (Phillips 2000, 300).

World War I brought about vast changes to the wine industry. The French army considered wine a necessary ration for its troops; French troops consumed 12 million hectoliters of wine in 1916 (Phillips 2000, 294). The French military machine thus

35 subsidized wine for the period of the war throughout the world, as French producers still recovering from phylloxera and due to wartime conditions produced less than 20 million hectoliters of wine annually (Phillips 2000, 294). The result was the importation of bulk wine throughout Europe—and especially from Greece--at the French government’s expense. In addition, WWI caused the destruction and abandonment of Germany’s vineyards, and the death of thousands of viticulturalists throughout Europe (Macdonough

2000, 26). Prohibition was made law in Canada and the United States immediately after

WWI, and it drastically curtailed wine consumption in England as well. For years largely protestant temperance movements in the United States, Canada and England, claimed alcohol was immoral and the cause of many a man’s and his families misfortune. Thus, although French vineyards became more productive due to government support and more productive vines, demand had fallen sharply, and this trend continued through the Great

Depression.

2.6.3 Transportation

The transportation of wine traditionally had been one of the biggest obstacles to winemaking and export. Two large insurmountable problems existed until the beginning of the 20th century: the inefficiency of transport, and the bottling of wines at the source.

One of the biggest problems affecting the quality in the past was the length of time needed for wine transport. As we have discovered, all but fortified or heavy sweet wines spoiled during the length of transport. The transfer of wine to glass bottles in the

19th century, created yet another problem of transportation; glass bottles were too heavy and awkward to be transported efficiently by horses (Jefford 2000, 38). Due to the inefficiencies of transport, all but the finest wines were consumed in the surrounding

region. With the introduction of the automobile and modern roads, wine finally could be

easily transported from the vineyards, to transatlantic cargo ships, across highways

The second difficulty of wine transport solved in the early 20th century, was the

bottling of wine at the source of production. Before the 20th century—and in all but the top estate wineries in the 19th century—wine was transported in casks from wineries, and

bottled by a wine merchant (Jefford 2000, 39). This caused a serious problem in terms of

quality control; wine makers could not effectively control or produce wines of quality.

By the late 1960’s, winemakers around the world changed to the practice of bottling on

premise to assure wine drinkers of the exact origin of the wine, and its quality. What had

once been a practice of only estate wineries like Mouton became standard practice

throughout the entire wine industry.

2.6.4 The Santorini Economy From the Late 19th Century to 1956

The late 19th century brought about great changes to Santorini’s economy and its

wine industry. The Santorini economy had become quite insecure; its one good export

product of wine, had to pay for all its imports and other goods brought into Santorini

(Agriantoni 1995, 70). Prices on all goods were among the highest anywhere, “ Regular

shortages put prices up to intolerable levels…in no other place is this the rule…such

overpricing of all commodities in general as there was in Santorini” (Agriantoni 1995,

70). However, the cost of imports could no longer be satisfied by the export of Santorini

wine.

Throughout Europe, tastes of wine changed to wines that were lower in alcohol,

fruity, and not as sweet after the 1840’s (Agriantoni 1995, 70). The sweet Vin Santo wine

of Santorini was no longer preferred, in fact the sweet Greek wine that was so popular

37 from the 16th-the 1840’s, was reported to be only consumed by the lower classes of the late 19th century (Agriontoni 1995, 70). As aforementioned, other European countries like France, Italy, and Spain, had drastically increased production of this fruity and stable lower alcohol wine; and France and its Grand Cru system became the wine of the elites— even the Russian elites. This change of wine tastes especially amongst the Russian elites, led to the resulting rapid decline in the price of Santorini wine. The decline of the wine trade to Russia began in 1857-59 during the Crimean War, and in 1859 Turkey absorbed more than 50% of Santorini’s wine exports (Agriantoni 1995, 69). After 1859, Russian duties on foreign wines would reach prohibitive levels for import to the Russian market, and by 1906 wine exports to Russia accounted for just 6% of total exports (Agriantoni

1995, 69). The sale of Vin Santo to Russian nobles could obviously no longer satisfy the money needed to pay for imports.

The Santorini wine industry could not compete. The Santorini wine remained expensive to produce, the prices were much higher than demand; the wine industry was no longer as economically viable as it was before. No new road or transportation system was built on Santorini until 1929 save for King Otto’s aforementioned path from Thera to

Limenas (Agriantoni 1995, 71). Thus the cost of transporting the wine to ships remained quite high, as did the problem of bottling due to the problems of transportation. And due to the nature of the Santorini ecosystem, increasing production was impossible in the late

19th century. The one period of wine modernization occurred during the 1930’s with the opening of a number of wine distilleries (Monioudi-Gavala 1997, 50). The resulting decline in the market of Santorini wine, forced the shipping industry to look elsewhere,

from Marseille to the Americas, but the prices of Santorini wine were considered far too

expensive for the taste (Agriantoni 1995, 71).

Figure 2.3 1898 View of Vineyards from Pyrgos

Source: University of Cincinnati Sustainable Development Report 2004

Due to the negative changes of the wine market, Santorini’s economy was forced to diversify. Instead of only relying on wine and shipping, other industries sprouted up ranging from tomato cultivation and tomato paste processing, to weaving, quarries, and the beginnings of the tourism industry. Many farmers decided to switch to growing tomatoes, that were far more profitable than the once in demand Santorini grapes. By the

1870’s due to the lack of profitable work because of the dispersal of so many vineyards, residents began leaving Santorini for Attica and Athens; those residents that stayed entered the new economic sectors (Agriantoni 1995, 71).

Agriculture was the first industry to start diversifying in Santorini from vines, to other products. Agriculture up to the earthquake of 1956 had become much more diversified, relying on three export goods all rather unique to Santorini’s ecology and climate. The importance of agriculture up to 1956 is embodied in the sheer amount of land used for cultivation. The total cultivation of agriculture on the island up to the earthquake amounted to 55,000 stremmas (Santo Wine Cooperative 2004). This was a substantial amount, considering that the entire island is made up of 75,000 stremmas, and only 22,000 are cultivated today (Santo Wine Cooperative 2004).

Tomatoes replaced wine as the primary export product of the island. Tomatoes were first mentioned as an agricultural good in passing in 1842, and by 1880, the widespread cultivation of tomatoes began (Agriantoni 1995, 203; Danezis 2001, 480).

The tomatoes grown in Santorini were renowned for their sweet taste due to the lack of water, and thus could be marketed as one-of-a-kind throughout Greece. In fact tomato cultivation, like grapes, was a specialized affair, local farmers successfully learned to struggle with the un-compromising environment, and produced tomatoes out of desert- like conditions. Local farmers and their families went as far as making their own tomato paste using the primitive yet environmentally feasible power of the sun. The tomato paste was first exported to Turkey and Egypt by 1902 (Agriantoni 1995, 203). However, despite the local innovations, the full-scale cultivation of tomatoes did not begin until after the first tomato paste-processing factory was built in 1929. After the processing factories were built, tomatoes could easily be packaged and shipped as an export good in the form of tomato paste. Before, due to the low yields of tomatoes, and the primitiveness of tomato processing, very few tomatoes and tomato products could be sent for export.

One can easily understand how quickly tomatoes came into importance because of the export power of processing when one observes the cultivation numbers and yields of tomatoes. In 1931, 2,000 stremmas of tomatoes were cultivated, with a yield of

1,000,000 kilos (Danezis 2001, 480). Before 1931, only much smaller areas of land were used for tomato cultivation (Danezis 2001, 480). By 1949, 12,000 stremmas of tomatoes were cultivated, with a 7,000,000-kilo yield (Danezis 2001, 480).

Tomatoes weren’t the only agricultural good being grown for export; fava was also exploited for its uniqueness and thus desirability for export. Fava could claim higher prices as a unique good because of the dryness of the climate and soil, the fava grown in

Santorini was sweeter than other favas cultivated throughout Greece. Fava became another product of cultural importance due to the specific knowledge needed to cultivate such a plant in such an unforgiving climate. Fava was yet another export crop, but of much less importance than tomatoes due to the lack of its processing, and its very low yields. The unique fava bean of Santorini has a long history on the island, it is called

Lathyrus Climenium, and according to DNA testing was the same strain of fava bean that was found at Akrotiri in 1500 B.C. In 1850 just 450 stremmas were used for the cultivation of fava, with a yield of just 44,000 kilos (Danezis 2001, 481). By 1921-1923

and up to 1943, 830 stremmas were actively used for the cultivation of fava, yielding

100,000 kilos (Danezis 2001, 481).

Yet agriculture was not the only sector of the economy: manufacturing and

quarries were also of great importance starting in the 1880’s up to the earthquake in 1956.

As aforementioned, many manufacturing opportunities presented themselves through the

processing and export of agricultural goods. Other manufacturing industries included a

knitting factory that was set up in Messaria in 1889 (Monioudi-Gavala 1997, 50). Also, a

stocking manufacturing industry was opened in 1929 (Monioudi-Gavala 1997, 50).

Factories were established in Santorini due to the cheap source of reliable labor Santorini

provided. Because of the decline in wine based agriculture, many women were left in

Santorini alone, as their husbands left to find work in Athens. These impoverished women left behind to form the nucleus of the workforce for the knitting and stocking

factories (Agriantoni 1995, 68). Furthermore, the garment factories used a local product

that has already gone extinct due to the upheaval of traditional ways of life--perennial cotton unique to Santorini. This special form of cotton that existed on the island for hundreds of years was used extensively in the island’s turn of the century weaving and stocking garment industry. However, after the ravages of World War II and the earthquake, most of the industries relocated to Attica and Athens (Monioudi-Gavala

1997, 50).

The quarries were another major sector of the economy in the late 19th to early

20th century. Quarries were set up for the extraction of Tufa or Possuolana, which has special insulatory properties. In 1890 a Greek and a German founded the Hephaistos

Company that concentrated on the extraction of Possoulana (Danezis 2001, 474). The

Possoulana was widely exported and was used in the construction of the Suez Canal. In the 1920’s a large plant was built for drying, pulverizing and packaging Possoulana into sacks for export (Danezis 2001, 474). Other companies soon entered the fold, including the Lavas quarry, and the Heracles Cement Company (Danezis 2001, 474). However, when tourism developed in importance after the 1956 earthquake, all but the Heracles

Cement quarry closed down in the 1970’s (Danezis 2001, 474).

One of the developments of the economy before the 1956 earthquake was the

emergence of tourism as an economic activity. Tourism was almost non-existent on the

island until the earthquake. But in 1935, the first and only form of tourism on the island

was an annual cruise of Santorini by a German luxury liner of German aristocrats

(Damigos 2004). Then, after World War II, from 1950-1956, cruise ships arrived at

Santorini once a month, and the passengers from the cruise ships were provided with

donkeys for transportation to a few local tavernas (Damigos 2004). Thus, before the

earthquake, tourism was nothing more than a side industry for locals. A few locals could make money off of cruisers once a month or week, by serving food or providing transportation up the caldera via donkey. No other tourist infrastructure existed--no hotels or rooms to rent, and just a handful of tavernas that primarily served the local population.

2.6.5 Resurgence of Santorini Wine from World War I to 1956

The First World War offered a new market for the low quality Santorini wines; the French soldiers in Northern Greece became large consumers (Kourakou-Dragona

1995c, 75). In addition, the northern vineyards of Macedonia were plagued with phylloxera, and could not produce enough for even local consumption (Kourakou-

Dragona 1995c, 75). Santorini, phylloxera-free, sold 100% of its production to the Greek domestic market from 1916-1920 (Kourakou-Dragona 1995c, 75). This sudden boom of the wine trade produced by World War I and phylloxera created a situation where wine was once again the dominant industry of the Santorini economy.

In 1920, the vine accounted for 84% of land under cultivation—3,500 hectares

(Kourakou-Dragona 1995c, 75). Vineyards on Santorini accounted for 39% of viticulture

production of the Cyclades from the 1920’s to World War II (Kourakou-Dragona 1995c,

77). Over 350 separate canavas sprouted up to take part of this boon. Day laborers

wages went from 1.50 drachmas, to 5.50 drachmas in 1920 (Kourakou-Dragona 1995c,

76). The day laborers that did not own the land suddenly were in the position to buy

vineyards--small ones--and moderately sized wineries expanded their vineyard holdings

(Kourakou-Dragona 1995c, 76). The churches and monasteries that had owned 40% of

the vineyards, also sold off a great deal of their vine holdings that had been operated by

businessmen and contracted laborers for over 50 years (Agriantoni 1995, 202). The new

widespread ownership of vineyards led to the creation of the wine cooperative, as many

of these new vineyard owners did not own their own winemaking business or distribution

company, and only sold their grapes to wineries. In 1910, the Santorini Wine

Cooperative, “ The Thera and Therasia Wine Production Defense Fund,” was founded,

but the Cooperative’s first winery would not open until 1951(Kourakou-Dragona 1995c,

76). The Cooperatives first large project was the creation of a copper plated pipeline that

would transport wine to a large 55-ton concrete tank at the port of Fira (Kourakou-

Dragona 1995c, 77). This pipeline greatly reduced the cost of transporting wine to the

port, but was a disaster in terms of wine quality. Another problem that came with the

resurgence, was the lack of technological and viticultural know how of all but three of the

largest canavas (Kourakou-Dragona 1995c, 77). Independent growers did little to

improve production methods, yields, or quality.

2.7 The World Wine Market 1956-Present Day

For the last fifty years the wine industry has found prosperity and transformed

itself. The demand for wine has drastically changed: wine marketing, wine ratings, and

44 the health benefits of wine all have done much to increase the popularity of wine. Yet the increases in demand and quality have been met by overproduction and the mass commercialization of wine.

2.7.1 Quality/Modernization

The mechanization and innovation of the wine industry has been one of the most significant changes in the last fifty years. Modern mechanized tractors not only harvested the vines, but also sprayed the crops with sulfur and pesticides in a fraction of the time it took previously by hand. By the 1950’s, pesticides and herbicides became quite popular methods for disease and insect control. The process of mechanization and chemical products was immediately accepted by American vineyards, and resulted in a more than

100% increase in production from 1957 (28 million gallons) to 1996 (304 million gallons) in California (Phillips 2000, 312). However, mechanization was not widely adopted in continental Europe until the 1960’s; horses cultivated the vineyards, as the existing vineyards were too narrow to accommodate tractors. In time, continental Europe accepted mechanization but only the large vineyards could afford the high prices needed to enlarge the vineyards. Most vineyards in Europe in the 1950’s and 60’s were less than five hectares—some 84% of them in France (Phillips 2000, 313). By the late 1960’s, production in Western Europe increased 43%, and worldwide production rose 45%, creating a supply glut.

Modernization and quality have improved due to scientific and genetic research as much as they have owing to mechanical and chemical improvements. Most wine experts agree the most significant quality change has been the discovery of the process of malolactic fermentation in 1930, but first popularized in wine in 1948 by Alan

Hickenbottom; and not truly accepted and implemented until the 1960’s (Halliday 2000,

53). Malolactic fermentation is the bacterial conversion of malic acid (a strong acid) into

a lactic acid (a softer and weaker acid), which is accompanied by a rise in pH alongside

the rise in alcohol (Halliday 2000,53). Without going into too much detail, high and low level pH’s kill a good wine; yet if a winemaker understands what level the wine’s pH is,

he can adjust the pH balance with the addition tartic acid (Halliday 2000, 53). Another

major research breakthrough has been Clonal selection. Clonal selection-- or the

breeding of varieties of vines to make them resistant to viruses and disease-- increased

yields and production even further. However, a clonal mix—even from high quality

vines-- will not produce a better wine, just a healthier more resistant vine (Halliday 2000,

62). Genetic modification (GM) also has become another important breakthrough in the

wine-growing arena. The major thrust of GM research has been to find new ways to

build resistance to mildews, and viral diseases of wines of which there is no known

chemical cure (Halliday 2000, 62). The paradox of GM research thus far, is that GM

research seeks to reduce the need of chemical inputs into a vineyard; a desire of

proponents of organic chemical free farming, but GM research is far from a natural and

organic process.

The wine surplus caused by the innovation in production and cloning, and a

corresponding drop in wine consumption, created what has been called a wine lake in the

1970’s to 1980’s. Wine was a commodity whose production exceeded its demand. The

European Community in the 1980’s created a two prong solution to this devastating

problem: they instituted mandatory distillation on over-producers of wine, and in the

1980’s started a policy of reducing vineyards called The Community Agricultural Policy

46 or CAP reform. CAP reform has had many far-reaching consequences. The European

Community paid unproductive vineyards to rip up their vineyards. In just under five years, 10 percent, or 320,000 hectares were destroyed (Phillips 2000, 314). Production fell from 210 million hectoliters to 154 million hectoliters, balancing out the surplus

(Phillips 2000, 314).

The end result of this period of mechanization was not only a dramatic increase in production capacity, but also a dramatic decrease in the number of small vineyards. The large vineyards gradually assumed control of the wine industry. Due to the costs of modernization and the lower prices due to the flood of wine supply, large producers became the only producers that were able to produce non-estate wines profitably.

2.7.2 Marketing

Robert Parker created the influential consumer wine guide, The Wine Advocate that rates wines on a one hundred-point scale. This wine guide has spawned similar newsletters, magazines and wine experts in Europe and America: The Wine Spectator,

Clive Coates in Britain, Michel Bettane and Thierry Desseauve in France (Jefford 2000,

49). This objective style rating has been quite controversial, and has drawn the ire of many wine makers and critics who complain that Parker’s ratings induce producers to fashion wines that conform to his own tastes; defined as oak, tannin, color, and alcohol

(Macdonough 2000, 36). The financial implications of Parker’s ratings are so significant, no European fine wine producer can ignore Parker’s stylistic preferences (Jefford 2000,

50). A good wine for Parker is considered anything over 90, a bad wine anything lower than 75 (Macdonough 2000, 36). A high rating by Parker, effectively doubles, triples, or quadruples the price of a wine (Macdonough 2000, 36). The result of Parker’s objective

wine assessments has been the dramatic increase in the price and quality of fine wines in

Bordeaux, Burgundy, Piedmont and Tuscany (Jefford 2000, 50). Parker is a tireless

advocate for terroir, low yields, and not heavy-handed mass wine production (Jefford

2000, 50).

Parker’s journalistic wine rating offspring have now found their way into daily

newspapers and magazines. The local wine writer in the daily newspaper has been found to be quite beneficial to retailers and producers, who find a recommendation, can move

their wine quite quickly (Jefford 2000, 50). And the flood of wine writing on different wine producing regions has had a beneficial effect on spawning wine-tourism (Jefford

2000, 50). Producers have found that direct sales of their wines to tourists is profitable,

and creates wine loyalty—with tourists regularly buying wines they enjoyed on vacation

over the internet/mail order, or at their local wine seller (Jefford 2000, 50). Wine ratings

and wine writing, have thus created a growing high priced fine wine market, and a

healthy wine tourism market.

2.7.3 Santorini 1956-Present Day

In 1956, Santorini experienced a massive earthquake that destroyed much of the

island, and led great numbers of residents to emigrate. The resurgent wine based

economy of Santorini was forever altered. Lands that were cultivated for centuries using

methods developed only in Santorini were abandoned, as most of the population in

Santorini left the island. By the 1980’s the lands being cultivated were less than half what

they were in 1950. For example in 1988 the land being cultivated for grapes amounted to

just 16,500 stremmas and 1,500,000 kilos, in contrast with the over 30,000 stremmas of

grape cultivation and 2,500,000 kilo yield of 1940 (Danezis 2001, 479).

The shipping industry had already dried up and moved to Piraeus because of the

emergence of the steam engine, and the decrease in both markets and prices for Santorini

wine (Monioudi-Gavala 1997, 50). The aforementioned manufacturing industries had

been dealt a fatal blow by World War II, and the earthquake, and would never to return to

the island (Monioudi-Gavala 1997, 50). Thus with the destruction of the old economy

based on the traditional culture of Santorini; agriculture, shipping, and manufacturing, as

well as the exodus of so many of Santorini’s residents due to the earthquake, the tourism

sector stepped into fill the economic vacuum.

2.7.3 The Rise of Tourism as the Dominant Economic Sector

How the tourism sector developed is quite important to the present development

of Santorini. The major and destructive earthquake of 1956 brought Santorini to

worldwide attention. Photographs of the caldera were printed throughout the world, and

inspired tourists to become interested in this extraordinary natural phenomenon they had

never been exposed to before. After the earthquake of 1956, cruise ships increased in

frequency to 1-2 per week (Damigos 2004). The need for an improved infrastructure to

meet the tourist demand was evident by the late 1960s, as tourism became more and more

popular, and thus a new cable car was built in 1972, connecting Skala with Fira. The new cable car allowed cruise boats to tie to buoys in Skala, and then take the cable car up to

Fira instead of walking or using donkeys. Cruise tourism exploded after this development; with cruise ships anchoring in Santorini at least daily since 1973 (Damigos

2004).

The building of the cable car was not the only major event to occur in the 1970s.

The construction of the airport near Monolithos had a major impact on the further

development of tourism. Tourists from all over Europe began to have direct access to

Santorini via charter flights. Because of the new tourism related attractiveness of

Santorini, Kamari and Perissa began to be developed in the 1970’s as beach resort alternatives to the caldera sites of Imerovigli, Oia, and Fira. In addition, one could begin any discussion of the growth of tourism in Santorini without mentioning the importance of the discovery of ancient Akrotiri. In 1967, Professor Spyridon Marinatos started his excavations at Akrotiri. Quickly, word got out around the world, that a very well preserved advanced 4,000-year-old Bronze Age settlement had been found. The world was told that the civilization found was the most advanced at its time in not only the practical fields of metallurgy, but in culture, religion, and art. Historians hypothesized that Akrotiri could be Plato’s famed Atlantis. Of course, such speculation reached the eyes and ears of people around the world, and whetted their appetites to see Santorini in person.

To meet the demand of these new tourists, the remaining locals raced to build hotels, rental rooms, and tavernas. The Greek government encouraged the construction of hotels, without regulations, to foster and encourage the otherwise poor economy

(Bletsis, 2004). In 1988 there were officially just 2,500 beds in hotels and apartments, and 7,000 beds in rental rooms to rent- with another 13,000 illegal beds (Gyzis, 2004).

Today of course this number officially has increased to data lists 9,095 official hotel beds, and 4,370 hotel rooms and 13,005 beds in rooms to rent, with 2,815 rooms in 2004

(Ministry of the South Aegean Hotel and Rental Room Report, 2004). Officially,

Santorini has tripled the capacity of rental rooms and hotels in the last 15 years, not to mention the increase in illegal rooms. Thus, it is clear that in the last 30 years, residents

of Santorini raced to build new tourism related businesses to keep up with tourist

demand, and did so without regulation from the government.

2.7.4 The Wine Industry

The wine industry on Santorini has followed the opposite trajectory of the tourism

industry. As was aforementioned, land devoted to viticulture has decreased annually.

The many pre-earthquake small vineyard owners, stopped growing vines, and instead

have sold their land for more profitable hotels, and rental rooms, leading to the recent

massive decline in cultivated vineyard land areas as seen in Figure 2.4 below. Despite the loss in land area and the disappearance of so many small individual wine growers, the same persistent problems of lack of quality, innovation, and high yields of the old

Santorini wine industry continue today.

2.7.5 Production/Quality

Despite the creation of the Santo Wine cooperative, the quality and amount of wine

produced on Santorini did not increase. The cooperative continued using the copper pipe that connected Fira with the port, as well as renting tanks in other parts of Greece

(Kourakou-Dragona 1995c, 80). These other tanks In Attica, Patra, Pylos were rented, as the cooperative did not have enough room to store all the grapes within its Santorini tank

(Kourakou-Dragona 1995c, 80). The winery used by the cooperative during this time was also quite small, and not even large enough to handle the relatively low yields of

Santorini grapes. The cooperative also did not re-acclimate itself to the scientific, economic, and technical changes in the wine industry (Kourakou-Dragona 1995c, 80).

Santorini’s wine industry largely remained in the pre-industrial period of wine making.

Figure 2.4 Total Land Area of Vineyards on Santorini, 1731-1999

60,000 50,000 Str em 40,000 ma 30,000 20,000 10,000 - 1731 1874 1920 1930 1970 1988 1993 1999 Year

Source: Danezis 2001, 479

The wine made on Santorini up to the 1970’s was of poor quality, as even leading winemaker Sigalis noted, “ Even today (1968), the wines of Thera do not occupy even the second position on the market, because as they are supplied, they are suitable only for blending on the part of merchants to fortify wines from other regions” (Kourakou-

Dragona 1995c, 83). So backward was the cooperative in terms of wine innovation and science, that the cooperative issued reports calling for, “ the progressive replacement of the local wine varieties by American rootstocks resistant to phylloxera” (Kourakou-

Dragona 1995c, 83). Santorini, as the reader will recall, was one of the only wine growing regions in the world that was not infected with the phylloxera disease. Simple understanding of winegrowing, geology and chemistry, would have informed the cooperative that Santorini’s volcanic geology made Santorini’s wines totally resistant to phylloxera; in fact Santorini remains one of the only places in Europe with its original un-grafted vines (Kourakou-Dragona 1995c, 80). Had the proposal been enacted,

Santorini’s unique ancient varietals would have been replaced by mundane popular wine

varietals. Another wine quality disaster the cooperative wished to enact was the

acquisition of, “ freezing machinery, since only thus will the standardization of wines be

possible” (Kourakou-Dragona 1995c, 83). Again, if such a proposal had gone through,

the quality of Santorini wine would have decrease even further (Kourakou-Dragona

1995c, 83).

2.7.5 Appellation of Origin

Yet, even despite the problems of quality and the ignorance of oenology by the

wine cooperative, the inherent qualities of Santorini’s wines were vindicated when they

received their own Appellation of Origin. In 1962, the Greek Ministry of Agriculture

performed a number of oenological studies of Santorini’s ecosystem and on the three

varitetals native to Santorini; Assyrtiko, Athiri, and Aidani (Kourakou-Dragona 1995c,

85). The study determined the degree of maturity necessary for the bottled wines to reach

their potential; the study also determined the quality of Santorini wine could be greatly improved with modern wine method techniques (Kourakou-Dragona 1995c, 85). After this successful experiment, the ministry’s findings were presented to the EEC (European

Economic Community—precursor to the EU) during Greece’s application process, and

Greece negotiated in Brussels for an “appellation of origin” for Santorini and other Greek wines. In 1970, the Appelation of Origin Santorini of High Quality was created and legislated by the EEC (Kourakou Dragona 1995d, 206). The appellation of origin is labeling method that indicated quality unique to a specific geographical location. With the entry of Greece to the EEC in 1981, Greece also successfully lobbied to have

Santorini wine labeled vqprd (Vin de Qualite Produit une Region Determinee’) on the

EEC market (Kourakou-Dragona 1995c, 83). The vqprd labeling essentially also claims that the wine produced on Santorini represents the region’s ecosystem.

The effect of receiving the appellation of origin was the immediate recognition in

the 1980’s of the inherent quality of Santorini wine by the creation of a number of new

wineries. The Boutari Company built a new winery upon the island; the new winery of the Santo Cooperative opened, and most of the island’s ten independent wineries

modernized or were opened during the 1980’s. The immediate effect of the new wineries

on wine was a resulting rise in the price of both grapes, and the price in a bottle of

Santorini wine. A kilo of grapes that cost just 17 drachmas in 1986, cost 86 drachmas in

1990, 125 drachmas in 1991, and reached 145 drachmas in 1992; a more than 1,000 per

cent increase (Kourakou-Dragona 1995c, 85).

2.7.6 Production

Quality was not the only problem; production failed to increase despite many new

innovations in the world wine industry. In 1970, the total yield of Santorini was just

4,500-5,500 tons of wine; the same yield as today-and the same yields from 70 years ago

(Kourakou-Dragona 1995c, 83-85). Yields per hectare have gone from 3,000 tons in the

1970’s to just 3,500 today, a small increase that varies by year (Kourakou-Dragona

1995c, 86). One older Santorini wine grower mentions a few reasons for the decline in

yields,

In the old days, as there was unemployment and poverty, the day wage was low and cultivating the vine was worthwhile even at 1.4 tons per hectare…Now, however, when living conditions have changed, the non-productive vines have been left uncultivated and even gone wild. Thus, with the productive vines only, the average crop per hectare would appear greater. In practice, the productivity of the islands vines is still very small” (Kourakou-Dragona 1995d, 98).

This author witnessed countless former vineyards abandoned, with juicy green grapes

sprouting from the vines. Despite supposed increases in productivity, much of the productivity gains come from harvesting and caring for only the best most productive

vineyards on the island; it is no longer economically viable to harvest all the vineyards on

the island. The exact yields and amount of stremmas devoted to wine growing are found

on Figure 2.5. As one notices, each year is quite different, due to changes in weather.

Table 2.1 Quantity of Wine Produced and Stremmas Devoted to Vine on Santorini 1970-1999

Year Quantity (Millions of Liters) of Wine Total Stremma of Produced Vineyards 1970 5,000,000 22,000 1991 1,500,000 16,500 1993 3,100.000 N/A 1995 1,900,000 N/A 1999 4,200,000 15,000

Source: Danezis 2001, 479

The increases in production and quality that have occurred have also been reflected in the building of a number of new wineries upon the island. Boutari’s modern winery has a 2,000-ton capacity. The Santo wine cooperative also opened a new modern winery in the 1980’s that currently produces 3,000 tons of grapes (Santo Wine Cooperative

2004). High quality producers like Antinou and Sigalis opened up estate wineries in the

1990’s.

2.8 Wine History Findings

The economic history of Santorini and its wine is quite rich and vibrant. This small volcanic island in the Southern Aegean was once the center of the world wine industry during ancient Minoan times. The great eruption destroyed this technologically advanced

trading society, but it did not annihilate Santorini’s native wine varietals. The vines

continued to be cultivated and made into wine on this beautiful but harsh and waterless island. The residents devised one-of-a-kind techniques to harvest their equally unique

wine. They did so, because the sweet wine of Santorini was in great demand as a high

quality wine. The Venetians exported the wine back to elites Venice and Europe. Turkish

rule allowed locals the opportunity to own their own vineyards, and export their own

wines. Santorini sweet wine was then exported by the new Santorini owned merchant

fleet to Russian aristocrats and nobles throughout Europe. Yet, new advances in wine

technology, transportation and winemaking, changed the tastes of wine drinkers from

sweet wines to bottled dry wines. Santorini wine was left behind. Instead of innovating,

converting to bottled wines or dry wines, Santorini continued to produce vin santo in

barrels as it had done for centuries. Lacking a market of elites to sell the expensive

Santorini wine to, the island eventually turned to other agricultural products like tomatoes, quarries, and the clothing industry for its economic survival. Although

Santorini wine experienced a brief revival in the early 20th century, the 1956 earthquake and the rise of tourism have caused the decline and abandonment of a great number of vineyards. Those vineyards that remain today, have largely not been modernized, and are of such low yields they cannot compete with the new mass-market wine industry. Hence this is the history of Santorini’s wine industry, and how it came to be. Further in-depth descriptions and analysis of all the other factors of the current Santorini wine industry will follow in Chapters 3 and 4.

So why is this most interesting and glorious wine history important? The answer that has hopefully been answered by this chapter is that wine and Santorini are

56 inseparable. Throughout history, life on Santorini was based on the cultivation, production, and export of wine. Santorini wine was bought by elites who could afford the high prices for its production and transport. Today this glorious history is in danger of being lost. Taking a cue from this long and fascinating history, Chapter 7 proposes creating a marketing plan to develop a new niche market of elite wine consumers; wine consumers who would be willing to pay high prices for a bottle of a very unique and ancient sweet wine.

Chapter 3: The Wine of Santorini Today

To properly understand Santorini wine, one must be familiar with the characteristics and qualities of its viticulture, its varietals, and the wine produced. This chapter describes Santorini’s exceptional viticulture and varietals, and some of the extraordinary wines produced from them. The chapter also discusses the stagnation and competition found today amongst Santorini’s viticulturalists and wine makers.

3.1 Viticulture

The wine of Santorini is incredibly interesting when it is compared to the normal practices and ideas of viticulture. In almost all areas, Santorinian wines should neither thrive, or be any good; the dominant trends of viticulture all point to the weakness of

Santorini in climate, soil, wind, and sunlight. The French have long held that climate

(climat), is the reason French wines are superior; the climat of French wines, is considered incomparable with other wine growing regions. Santorini’s climat as we shall understand, is just as incomparable with the rest of the world. Climat in the traditional

French viticultural sense refers both to the actual weather: sunlight, and rain we think of as climate, and to the special characteristics of each vineyard—its soil, terroir.

In Gladstones’ seminal book on viticulture, Viticulture and the Environment,

Gladstones has determined seven critical climatic elements to viticulture that will be described in detail as to their impact on Santorini: 1) Mean January Temperature, 2)

Mean Annual Range, 3) Heat Degree Days, 4) Annual Rainfall, 5) Relative Humidity, 6)

Aridity Index, 7) Sunshine Hours (Gladstones 1992, 8).

The importance of Mean January Temperature, and Mean Annual Range arises out of the idea of Continentality of wine. Continentality is the idea that continental

climates are the best for the creation of high quality wine that encourages delicate

aromas, fine fruit aromas, and the retention of natural acidity (Beeston 1999, 9). Hence, continentality supports cold dormant winters, warm springs, and relatively hot summers;

those climate factors one would find in France. Thus the mean January temperature corresponds to the idea that winter dormancy in vines corresponds to a longer pruning season, which is considered ideal (Beeston 1999, 9). Continentality includes warm and sunny springs to encourage early wine development, and high mid summers temperatures with lots of sunshine (Beeston 1999, 9).

Santorini does not have a continental climate. The winters are rainy, but not as cold as one would find in France; the summers are extremely warm and arid, with long periods of sunshine—over sixteen hours a day. As we shall see later on, it is during these rainy winter seasons, that Santorini vines absorb the necessary rainwater and moisture they need to survive.

Sunshine hours are another important climate factor that influences wine. In spring it is acknowledged that warm, sunny conditions aid budburst and promote growth.

Pollination and fruit set (Beeston 1999,10). The warming affects of sunshine on soil promotes cytokinin (plant hormones in growing tips) development in the roots of the vines, while heating and the spectral quality of direct sunlight may help the bud by reducing its sensitivity to gibberellins (plant hormone causing growth of the stem)

(Beeston 1999, 10). The spectral quality of the light is also important as red wavelengths and normal spectral quality are recognized to cause leafy, stocky growth, vigorous branching, fruitfulness, and generous production of pigments analogous to the supply of ample cytokinins from the roots (Gladstones 1992, 26). Sunshine also assists fruit-

bearing canes to obtain a rapid sugar accumulation in their grapes (Beeston 1999, 10).

Gladstones contends that numerous sunshine hours are desirable for viticulture in theory; in practice the issue is more complex. Very sunny climates like Santorini tend to be quite variable in temperature, and have low relative humidities; both are considered detrimental to viniculture. Thus, sunshine hours are only positive if temperature variability and relative humidity remain favorable (Gladstones 1992, 21). In high temperature climates like Santorini, vines require a greater number of sunshine hours to achieve a given fullness of wine body and style than those in cool climates. This is because the consumption of nutrition by the vine increases as temperature increases (Gladstones

1992, 21).

Rainfall is another critical factor in the creation of quality wine. In the past, rainfall and irrigation were not considered to be all that beneficial to wines: years of drought were considered the best for superior wines; and irrigation was considered taboo

(Beeston 1999,11). However, today these ideas have undergone a profound change.

Viticulturists now believe that moisture stress-- whether from too much rain, or the lack thereof—does irreparable damage to vines. Today, the most modern vineyards are built and equipped with drip irrigation systems that cut in when the vineyards show the slightest hint of drought stress (Beeston 1999, 11). Drought moisture stress in hot climates like Santorini’s, may cause leaf drop, and thus expose the grapes to direct sunlight; this is catastrophic if the grapes are not fully ripe as they will ripen no further and shrivel (Beeston 1999, 12). In terms of excess rainfall moisture stress, winter is a time where the vine is dormant and needs little moisture (Beeston 1999, 12). If there is a great deal of moisture, the vigneron must employ drainage techniques to avoid water-

60 logging and damage to the roots (Beeston 1999, 12). In terms of a dry winter, the vines will need irrigation on the budpoints, so there is no stress to the vintage. Rainfall is most destructive at flowering or the weeks before ripening; such rainfall will make the grapes liable to bunch-rot, and bloat the grapes (Beeston 1999, 12).

Figure 3.1 Viticulturalist Pruning an Ampelia in Winter

Source: The Santorini of Santorini 1995, 117

In Santorini, rainfall is rare; what rainfall does occur falls during the winter.

There is no rainfall at all during the growing season--except for rare occurrences that result in miniscule amounts of rainfall. Therefore as the aforementioned viticultural techniques and preferences call for little moisture in the winter, Santorini is the exception. This exception has been ingeniously exploited by the generations of

Santorinian viticulturalists; the first plowing of Santorini vines called niato occurs during the month of December (Kourakou-Dragona 1995f, 123).

This plowing wipes out the leaves on the surface, and replaced them with leaves and vine wood to fertilize and ventilate the soil; and more importantly this ventilated and fertilized soil is better prepared to absorb the valuable water from winter rains

(Kourakou-Dragona 1995f, 123). Also a few days after the first plowing, viticulturalists hollow out the ground into an impression of an inverted cone extending 15cm deep so rainwater will collect at the roots of the plant (Kourakou-Dragona 1995f, 125). The second plowing of Santorini vineyards called divolo in February or March further promotes the absorption of rainwater before budding (Kourakou-Dragona 1995f, 123).

But plowing is not the only means Santorini’s viticulturalists have employed to conserve as much rainwater as possible: the vines of Santorini have been deliberately planted far apart, and terraces have been constructed. All Santorini vines are spaced double the traditional distances to allow each vine to absorb as much water as possible. Terraces were built on the sides of Santorini’s steep hillsides to stop and collect water (Kourakou-

Dragona 1995f, 121). Of course some years moisture stress from drought is too much for the vines; the harsh winds and lack of moisture dramatically reduce yields to less than

1,000 tons of grapes (Kourakou-Dragona 1995f, 122). Although Santorini is an arid

climate with little rainfall, traditional yet effective means of moisture collection have allowed Santorini’s vines to survive.

Relative humidity and saturation deficit are also quite important in terms of

moisture stress. Saturation deficit is the difference between actual water vapor content of a given air body and what it could contain if it were vapor-saturated at the same temperature; thus it is a direct indicator of the evaporative power of the air and relevant to the moisture stress in the vines (Beeston 1999, 12). Recent research has shown that in arid climates like Santorini, even fully irrigated vines cannot take up water fast enough to meet the extra evapotranspiratorial demands of the leaves. The result of this process is that photosynthesis ceases in mid to late morning as stomata (leaf pores) close to prevent losing moisture. The greater the saturation deficit in hot and arid climates, the more moisture is transpired by the leaves per unit of carbon dioxide taken in through the stomata (leaf pores) with the consequence that growth and yield per acre per unit of water are reduced (Gladstones 1992, 29). Another problem of saturation deficit is an increase in potassium absorption by vines, which leads to a loss of flavor freshness and a greater risk of oxidation and spoilage (Gladstones 1992, 29). Thus to get around these problems, winemakers are directed to find spots that are high in relative humidity and cool.

Wind is both beneficial and detrimental to viticulture. Air circulation is important

as it prevents frosts, equalizes temperatures, and prevents mildews and rots. It also

moves the leaves of the vine, allowing entry of sunlight into the canopy to improve

photosynthesis (Beeston 1999, 13). However, excessive wind as found in Santorini, has a

number of negative consequences: strong winds may cause direct damage to grapes in

flowering season by blowing off whole bunches of grapes; sea breezes may carry sea salt

which interferes with the flowering buds; strong winds accompanied by hot weather

rapidly dehydrate vines, closing down photosynthesis producing a much smaller yield.

Harsh winds continually blow upon Santorini causing a unique approach to vine

cultivation and to the flavor of the grape. The solution to winds on Santorini has been the

creation of the stefani or vine crowns, a round basket the middle of which provides a

haven for hanging clusters of grapes. Without such a basket or crown, the winds would

be too strong for grapes to grow; during times of extreme drought the vines no longer

have the power to resist the continual blast of the winds, and grapes are severely

damaged. The winds do create positive benefits to the flavor of the wine: steady westerly winds preclude condensation on the grapes themselves, resulting in the parallel development of high sugar and acid levels (Cobb 2005).

Soil is one of the most important elements towards making a fine quality wine.

To the French writers Jacquelin and Poulain, soil embodies the principles of terroir and climat, “The whole art of the wine grower rests in knowing his soil, supplementing it wisely, growing only suitable varieties and maintaining a judicious balance between vine and soil in order to achieve the best wine and a reasonable yield” (Beeston 1999, 14). A good soil for viticulture is described as, “ having balance—soils of sufficient organic and inorganic elements and of good enough structure—yet with comparatively poor fertility to allow the vine to develop a successful root system, which will penetrate in sufficient depth to allow us all of all available moisture and nutrition (Beeston 1999, 15). The chemical properties of the soil are also quite important; soils can be described as alkaline, acid, and neutral. Each soil has a different cec (cation exchange capacity): acid soils have a hydrogen predominance but few nutrients; alkaline soils have a predominance of

metal ions and thus high nutrients; neutral soils lie in between (Beeston 1999, 15). These

chemical balances in the soil require different cultivation methods; over- cropping and over-treatment of the same fertilizers can disturb acid soils; alkaline soils may be upset by over application of phosphate fertilizers (Beeston 1999, 15). Besides chemical

composition, soils need sixteen nutrients for proper plant growth: carbon, hydrogen,

oxygen, nitrogen, phosphorous, potassium, sulphur, calcium; and traces of boron,

chlorine, cobalt, copper, iron, manganese, molybdenum, and zinc (Beeston 1999, 15). If

one element is lacking in the soil, a variety of procedures and reasons for such

deficiencies can be employed to correct the problem.

The soil of Santorini is volcanic leftover from the great eruption. The soil is made

up of chalk and shale beneath ash, lava and pumice. The harshness of the volcanic soil

does give the vine an advantage; vines are one of the only plants that can penetrate the

volcanic soil, and stand up to the perpetual drought (Kourakou-Dragona 1995f, 121). No

trees or other deep-rooted plants--other than fig trees-- can exist in such harsh conditions.

Hence Santorini’s soil does live up to one aforementioned condition of good soil: it has comparatively poor fertility to allow the vine to develop a successful root system, which will penetrate in sufficient depth to allow us all of all available moisture and nutrition

(Beeston 1999, 15). But Santorini soils are acidic and lack nitrogen. In the past, the plowing and introduction of plant remains to decompose served to make up for this lack of nitrogen. Today, fertilizers are used. Yet despite the harshness of the soil, it is because of the soil its harshness and relative lack of moisture that Santorini grapes have developed into such high sugar, high acid grapes that compose the famous Santorini wines.

Figure 3.2 The Volcanic Soil of Santorini

Source: The Santorini of Santorini 1995, 1

Topography is another element the French place great faith in for their concepts of terroir and climat. The very best vineyard sites in France, and the rest of the world, contain at least two of the four following topography characteristics: 1) they are situated on slopes with excellent air drainage above fog level; 2) the very best are usually on

slopes of projecting or isolated hills; 3) even in hot areas, they usually face the sun during

some part of the day—part easterly and southerly aspects are common; 4) if the sites are

inland, they are usually near a body of water (Gladstones 1992, 41). The thermal zone is

another important factor created by the aforementioned four typographies. The thermal

zone is when the warm nocturnal air on the middle and lower slopes of hills sitting above the inversion or fog layer, clothes the dense cold air at the valley bottom or on the flats.

These thermal zones are quite stable in temperature, and thus when temperatures are less

variable; the vineyard warms and consequently ripens more quickly (Beeston 1999, 17).

Santorini embodies many of the principles of climat and terroir. Grapes on

Santorini grow on the eastern slopes of the caldera's edge, which begin from their sharp western edge at around 1,000 feet, ending at sea level at the island's famous black beaches. The grapes are in constant view of the sun, soaking up the suns spectral rays; but the grapes are protected from overexposure of the sun by their protective ampelie encasings that allow the grapes exposure only during the periods of high winds. The thermal zone on Santorini is one in which the night is generally a stable moderate temperature. It is during this stable nighttime that vines drink from moisture absorbed by

the ground at night, in a fortunate quirk of geology and climate that provides the perfect

bare-minimum the vines need to survive and grow fruit (Cobb 2005). Therefore,

Santorini vineyards exhibit all four of Gladstones’ aforementioned topography

characteristics, and they also have a kind of thermal zone at night that allows the vines to collect just the perfect amount of moisture. Santorini is thus from a pure viticultural

perspective a surprisingly good place to grow fine wine: a place with its own terroir and

climat.

Figure 3.3 Terraces of Santorini

Source: The Santorini of Santorini 1995, 18

3.2 Santorini’s Grape Varietals

In Greece, over four hundred indigenous grape varieties exist. Of those four hundred, thirty are grown on Santorini. Even more importantly to the wine industry, is the fact that of these four hundred grape varieties, all are found only in Greece. This uniqueness is what makes the wines of Greece and Santorini, so extraordinary from a viniculture point of view. These Greek indigenous grapes are considered outstanding by many wine experts, as the multitudes of flavors are quite different, but also delicious.

(Hall, 2004) As one writer has noted, the only way for Greek wines to stand out in the

international market is, “through the use of indigenous Greek grape varieties” (Alley,

2003).

Santorini is known around the world for the quality of its unique grape varietals.

Santorini currently grows over thirty different types of grape vines (Santo Wine

Cooperative 2004). The most popular varietals are the white grapes Athiri, Aidani and

Assyrtiko. The red grape varieties of Mandilaria, Voudomato and Mavrotragano are also grown, but in smaller amounts primarily to make red Vin Santo wines that allow for long aging (Santo Wine Cooperative 2004). All of these aforementioned grape varietals grown

on Santorini are very high in sugar content and acidity-- the only kind of grapes that can

be grown effectively on Santorini.

There are a number of issues with the varietals grown on Santorini. First,

according to an interview with the wine cooperative, of the thirty types of varietals, the

hybrids are starting to be diluted and thus are losing their individuality and uniqueness,

and there is even the possibility that these types may become very rare or extinct (Santo

Wine Cooperative 2004). Many of these rare grapes are not even used for wine making.

Second, varieties of grapes that make up small portions of the yield, less than 10%, like

Mandiliria and Mavrotragano are harvested at different times in the growing season than

other more prevalent types of grapes like Assyrtiko. This makes it difficult to get people

to work the fields to cultivate these rare varieties. Thus, these varieties, while quite

distinctive to Santorini, are rapidly fading out (Santo Wine Cooperative 2004). Third,

many of these varieties are already being grown on other Greek islands at a much lower

cost. Representatives of Santo Wines stated in an interview that, “There is a possibility of

69 other regions eventually producing similar quality wines at a lower cost” (Santo Wine

Cooperative 2004). Thus, these unique varieties, their costs, and their competition all spell for many future problems for the Santorini wine industry. But now, the unique properties, attributes, and issues of each of the important varietals used in the Santorini wine industry will be discussed in detail.

3.2.1 Assyrtiko

Of all the Santorinian grape varietals, Assyrtiko is the king. Assyrtiko has a near mystical quality; it has been growing on Santorini for thousands of years. Questions of whether it predated and survived the great 1600 B.C. eruption have yet to be answered

(Kourakou-Dragona 1995e, 110). It most certainly has been growing on the hills of

Profitas Ilias since the great eruption (Kourakou-Dragona 1995e, 110). Thus, the

Assyrtiko found on Santorini today, remains the same non-grafted plant that it was 3,000 years ago. Truly a remarkable lineage, one that is wont to be found anywhere else in the world.

As a grape variety what makes Assyrtiko so special that it makes for excellent wine? The answer is that Assyrtiko is a fine multi-purpose varietal, maintaining its acidity as it ripens. It is considered by many to be Greece's best white grape, similar in character to Riesling, and can be vinified in a range of styles as well (Alley, 2003).

Assyrtiko is made into a fine Assyrtiko white wine, Vin Santo, and can be mixed with a number of other wine varieties as well.

Figure 3.4 Assyrtiko

Source: The Santorini of Santorini 1995, 100

Assyrtiko is capable of maintaining its acidity while ripening under the blistering

Mediterranean sun (Alley, 2003). Assyrtiko’s versatility is that it has adapted so well to

the harsh climate and volcanic soil of Santorini. It is resistant to drought, oidium, and

peronospora, allowing it to prosper in areas of high humidity and high levels of ground

aridity (Kourakou-Dragona 1995e, 111). Hence, one can ascertain how Assyrtiko is the

perfect varietal for Santorini’s ecology. Santorini of course has volcanic soil with high

aridity, a brief rainy season, and continuous sunlight; all ecological elements Assrytiko

prospers in. It should come as no surprise to learn that Assrytiko comprises 65%-75% of

the grapes grown in Santorini vineyards (Kourakou-Dragona 1995e, 110). Due to

Assrytiko’s unique lineage and its robustness in Santorini’s harsh ecology, wine made

from Assyrtiko grapes has been granted the prestigious Appellation of Origin of High

Quality. Assyrtiko has thus been granted this title, as nowhere else in the world, does it

embody its unique properties, but in the ecology of Santorini.

However, the unique resistant properties of Assrytiko have attracted the attention of wine growers throughout Greece. Modern scientific evidence shows that the Assyrtiko

adapts easily to a broad range of bio-climates without its viticultural characteristics or its

oenological properties being lost (Kourakou-Dragona 1995e, 111). All throughout the

sunny and arid islands of Greece, Assyrtiko has been planted and is being cultivated and

made into wine. Representatives of Santo Wines state of the spread of Assrytiko that,

“There is a possibility of other regions eventually producing similar quality Assyrtiko at a

much lower cost” (Santo Wines 2004). Although of course the quality of the Assyrtiko

will never match that found in Santorini due to the aforementioned exclusive nature of

Santorini’s ecology. Hence, although such wines will not receive the prestigious

Appellation of Origin of High Quality, Assrytiko wines grown in other areas of Greece,

may be produced at much lower prices than in Santorini; this development may not only

reduce the mystique of Santorini’s Assyritko, but its higher price as well.

3.2.2 Athiri

Another famous varietal with a long historical lineage is the Athiri. Athiri is a lower acid varietal and one of the most ancient grape varieties in the world. Athiri and its attributes was mentioned by Galen in the second century A.D. as the wine Theraios; which can be translated into wine of Thera-although it was also found on Crete

(Kourakou-Dragona 1995e, 101-102). Athiri originally from Santorini, is now planted in

Macedonia, Attica and Rhodes.

Athiri grapes have a thin skin and give sweet, fruity juice. It produces wines that

are slightly aromatic, having medium alcoholic content (Hall 2004). Athiri grapes are

excellent when dried in the Sun, a practice Santorini wine makers have been using for

centuries to make the sweet Vin Santo wines. There are both white and dark red varietals

of Athiri: the white, make for excellent white Vin Santo, and the red make for the unique

red Vin Santo—dark, soft, thick, and very sweet. The red Vin Santo made from the red

Athiri is known as Mavrathiro.

However today on Santorini, Athiri grapes are not as widely grown as they were

in the past. The white Athiri grape is becoming quite rare in the vineyards of Santorini

(Kourakou-Dragona 1995e, 110). The wine cooperative even states white Athiri has the

possibility to become very rare or even extinct (Santo Wine Cooperative 2004).

Furthermore, since Athiri like Assyrtiko has been planted upon other Aegean islands, its

73 uniqueness to Santorini has been dissipated; again, other islands can produce the same varietal wines at a much lower cost than they can in Santorini.

Figure 3.5 White Athiri

Source: The Santorini of Santorini 1995, 103

Figure 3.6 Red Athiri

Source: The Santorini of Santorini 1995, 104

3.2.3 Aidani

The Aidani grape is quite similar to the Athiri grape; thin skins and sweet juice.

The Aidani grape varieties were introduced to Santorini from the Island of Naxos, where

Aidani is made into Naxos’ Apeiranthos wine (Kourakou-Dragona 1995e, 106). Aidani

grapes are grown on Santorini, in both their white and red varieties, and are known to be

quite productive on Santorini. The Aidani grapes grown are used entirely for the

production of Vin Santo (Kourakou-Dragona 1995e, 110). Aidani grapes are grown in

even lesser quantities than Athiri grapes on Santorini (Kourakou-Dragona 1995e, 110).

Figure 3.7 Aidani

Source: The Santorini of Santorini 1995, 107

3.2.4 Mandilaria

Mandilaria is an ancient dark red grape that has been grown historically on Crete,

the Dodecanese, and Rhodes. The Mandilaria grapes were one of the first varieties grown

on Santorini; documents from the 17th century note their cultivation (Kourakou-Dragona

1995e, 105). Today, Mandilaria grapes are used primarily for the production of red Vin

Santo, and 1/5 of the must produced upon the island (Kourakou-Dragona 1995e, 105-

111). Again, like Aidani, Athiri and Mavrotragano, the Mandilaria grape is grown in very small quantities on the island.

Figure 3.8 Mandilaria

Source: The Santorini of Santorini 1995, 103

3.2.5 Mavrotragano

Mavrotragano grapes are native to the Cyclades, but their cultivation is all but

limited to the vineyards of Santorini (Kourakou-Dragona 1995e, 108). The

Mavrotragano is a red grape that has been in the past used to make red table wine, as well

as red Vin Santo (Kourakou-Dragona 1995e, 105). Today, the grape is produced in very small quantities, and used only for the production of red Vin Santo wine.

Figure 3.9 Mavrotrango

Source: The Santorini of Santorini 1995, 108

3.3 The Wines of Santorini

The wines produced on Santorini, are like the aforementioned varietals, history,

climate, and ecology--unique to Santorini. As the previous discussion on varietals

described their unique characteristics, these characteristics shine through in the wine, as

does the Santorini soil, climate, and special method of wine making that has lasted for centuries. In short, each bottle of Santorini wine embodies the essence of Santorini. The

culmination of thousands of years of wine knowledge and history is found in each of the

styles of wine produced on Santorini. A discussion on the attributes, and awards for

each style follows.

3.3.1 Vin Santo

Vin Santo is the famous dessert wine found only on Santorini. The regular Vin

Santo is made from the indigenous white grape varieties of Santorini: a blend that of

which Assyrtiko is the majority grape variety, and Aidani is blended for aroma. Due to

its use of Assyrtiko, Vin Santo is an Appellation of Origin of High Quality. The process

of making Vin Santo has a long history that is still in use today: the Assyrtiko and Aidani

grapes are harvested in early August and left to dry in the sun for 8 to 10 days (Santo

Wine 2004). Natural fermentation takes over and the wines are then aged in oak barrels;

Vin Santo is a wine that matures with age.

The resulting product is a naturally sweet and fermented dessert wine of a copper

to golden brown color. The taste and bouquet is somewhat unfamiliar to contemporary

wine palettes: a mixture of honey, spices, and raisins, with an accompanying sweet and

rich velvet-like texture, that still contains acidity. The taste and experience is quite unlike

any other dessert wine found in the world. Italian Vin Santo, and other dessert wines are

much heavier and sweeter vintages, fortified with sugar and higher in alcohol, unlike Vin

Santo. Thus, Vin Santo is one of the only sweet dessert wines other than the highly expensive ice wine, to be both naturally fermented and unfortified.

Figure 3.10 Bottle of Vin Santo

Source: Santo Wines 2005

The process of making Vin Santo has also recently been improved upon with the

introduction of Vin Santo vin de liqueur. The Vin Santo liqueur slight difference is in its

fermentation process, where the natural process of fermentation follows and before aging

the alcohol is fortified at 15 degrees Celsius (Santo Wines 2004). This new liqueur

produces a slightly sweeter and more intense wine that has won two international

competitions (Silver Medal Bruxelles 2003, and Bronze Medal International Spirit and

Wine competition London 2003) in its short lifespan (Santo Wines 2004). The prices of a

bottle of Vin Santo range from 15 to 25 euros.

3.3.2 Red Vin Santo—Nama/Mezzo

The famous Vin Santo wine also was long made from the indigenous red grape

varieties. Red Vin Santo is made from the grape varieties of Mandilaria, Mavrotragano,

and Voudomato and Assrytiko. The process of fermentation is the same as the white Vin

Santo; grapes are harvested and left for days in the sun, they are then aged in oak barrels.

The difference in the naturally fermented and sweet Red Vin Santo, is the time needed for the red Vin Santo to age. Generally the red Vin Santo needs six years of aging before it is released upon the market (Santo Wines 2004).

Figure 3.11 Nama

Source: Santo Wines 2005; Canava Roussos 2005

In the past, the natural red Vin Santo made out of Mandilaria, Mavrotagano, and

Voudatamano varieties was the Holy Communion wine of the Russian church called

Nama, and is still used today as a Communion wine, especially during Easter (Santo

Wines 2004). This communion wine is dark red in color, and has the bouquet of roses and

Easter flowers—hence its selection as a Communion wine. The other red Vin Santo, is

made with the Mandilaria and Assyrtiko varieties, and is also a vibrant dark red in color.

Its aroma and taste is sweeter but also smooth and aromatic.

3.3.3 Mezzo

Mezzo is a less sweet version of Vin Santo that has been traditionally produced on

Santorini. The process of making Mezzo less sweet than its Vin Santo relative is due to the mixing of both un-raisened and raisened Aidani, Athiri and Assyrtiko grapes, and aging the wine for at least a year in oak barrels. The product of this mixture is a wine of tremendous acidity, wildflower honey, and peaches. Mezzo is produced in very small quantities on the island, and only produced by Santo Wines and Sigalis.

3.3.4 Red Table Wines

The wineries of Santorini also produce a small amount of dry red wines. Santo

Wines produces Mavrotragano, as well as Voudomato dry red wine in limited quantities.

The Mavrotragano wine is a strong heavy dark red wine, heavily spiced and aggressive, it must be aged 6 months. Voudomato is a bit lighter in color and flavor, and instead offers more aromatic aromas and flavors. As both of these varieties exist only on Santorini, it follows with proper initiative; both of these wines would qualify for the esteemed

Figure 3.12 Bottle of Mezzo Wine

Source: Santo Wines 2005

Other red wines produced on the island include Halaris’ experimentation with

Syrah and Cabernet varieties as well as their Rose, and Roussos’ Rivari. The Santo

Cooperative also produces low quality red table wine.

3.3.5 Assyrtiko

The infamous Assyrtiko is made into more than just Vin Santo, the dry white

wine Assyrtiko is also famous and award winning. Assyrtiko white wine is made from

100% Assyrtiko grapes, qualifying as an Appellation of Origin of High Quality Wine.

The wine is yellow with a slight tint of green. It is a full-bodied and balanced wine with

an aromatic flavor and bouquet of flowers and citrus fruits. Its aromatic full-bodied flavor

makes it the perfect accompaniment to Greek seafood dishes. The quality of the wine

depends on the quality of the conditions for that year. Recently the Santo Wine Assrytiko

83 has won two prestigious wine competitions: a bronze medal at the 2000 International wine and spirit competition in London, and the quite prestigious silver medal at the renowned Bordeaux international challenge of wine in 1999. Its high quality and taste, has led it to be produced throughout Greece, but no other region can claim the

Appellation of Origin. The prices of Assrytiko range from 10 euros to over 20. It is exported to both Europe and America.

Figure 3.13 Bottles of Assyrtiko

Source: Santo Wines 2005

3.3.6 Nykteri

The infamous Assyrtiko is made into more than just Vin Santo, the dry white wine

Assyrtiko is also famous and award winning. Assyrtiko white wine is made from 100%

Assyrtiko grapes, qualifying as an Appellation of Origin of High Quality Wine. The wine

is yellow with a slight tint of green. It is a full-bodied and balanced wine with an

aromatic flavor and bouquet of flowers and citrus fruits. Its aromatic full-bodied flavor makes it the perfect accompaniment to Greek seafood dishes. The quality of the wine depends on the quality of the conditions for that year. Recently the Santo Wine Assrytiko has won two prestigious wine competitions: a bronze medal at the 2000 International wine and spirit competition in London, and the quite prestigious silver medal at the renowned Bordeaux international challenge of wine in 1999. Its high quality and taste, has led it to be produced throughout Greece, but no other region can claim the

Appellation of Origin. The prices of Assrytiko range from 10 euros to over 20. It is exported to both Europe and America.

Figure 3.14 Bottle of Nykteri Wine

Source: Santo Wines 2005; Canava Roussos 2005

The Nykteri wine embodies both ancient vines and ancient vine production techniques. Nykteri wines are a combination of the indigenous white grape vine varieties

85 of Assyrtiko, Athiri, and Aidani. Nykteri means “staying up all night” in the Santorini dialect of Greek (Santo Wines 2004). The wine has been so named because the traditional way of harvesting the wine was to harvest the vines (done in mid-August) in the afternoon and to hold off on vinification until the early morning. This was done because of the low temperatures would hold the aromas and flavor of the wines during the night—not allowing the temperature of fermentation to exceed 18 degrees Celsius

(Santo Wines 2004). To this day, the same production method is employed.

Nykteri wines are dry and clear yellow in appearance. They are full bodied and possess aromas of jasmine, citrus flowers, and pears. Santo’s Nykteri has been awarded the Bronze Medal in the 2000 Singapore Wine Challenge (Santo Wines 2004). The prices of Nykteri wine range from 8 to 12 euros.

3.3.7 White Table Wines

Apart from the widely produced Assyrtiko and Nykteri dry white table wines, other white table wines also exist. Like the red table wines, most of the white table wines produced use the indigenous white grape varieties. Santo Wines produces an Athiri dry white wine: the Athiri is golden white with the aroma of lemon and jasmine. Santo

Wines produces six tons of Athiri to be made into Athiri wine a year. Santo also produces an Aidani white wine that is mixed with Assyrtiko. The Aidani wine is golden white with aromas of herbs and flowers. Other white wine combinations are also used by a variety of wineries; Santo produces an organic white fume, Roussos a white called

Caldera. Again, since the Athiri vine is native to Santorini, with proper initiative, it is possible this varietal could be granted Appellation status.

3.4 The Wine Industry and Stagnation

The art of wine has also been under a long spell of stagnation in the land that first

brought the world the wine god Dionysus and the experience and pleasure of wine. So

stagnant is the Greek wine industry that the first Greek Master of Wine, Constantinos

Lazarakis, was proclaimed in 2002, an event that the author Robinson believes can only

be good for the country’s wine industry (Robinson, 2004). For the moment Robinson’s chief complaint is that the Greek wine industry is too, if you will forgive the rather obvious word, insular. Greece has the highest incidence of Viognier per producer outside

France and great quantities of Syrah, yet does nothing to exploit this inherent advantage.

Syrah and Viognier are two wine varieties of high demand and quality. However, no one

in Greece is experimenting with the fashionable and rare co-fermentation of Syrah with

Viognier, when if they did they would surely make not only a lot of money selling a rare

and in-demand wine, but would put Greece on the wine map as well (Robinson, 2004).

The inherent problem is that too few Greek wine producers are aware of what is going on

in the rest of the tight-knit wine world, and no one reads the Australia and New Zealand

Wine Industry Journal (Robinson 2004). Clearly the Greek wine industry does not keep

up with the popular wine trends of the rest of the world. New varietal combinations and

research techniques developed in other wine producing countries are lost on the Greek

wine industry. Such a lack of understanding of current viticultural practices puts Greek

wineries behind their foreign competitors on the world wine market. However, the isolated nature of Greek wine and viticulture also signifies Greece’s ability not to be influenced by recent trends, thus Greece goes on growing the classic varieties and wines that otherwise may be lost in countries dependent on the changing worldwide wine trends

and consumption patterns. Hence, the insular nature of Greek wine and viticulture is a

double edged sword; it makes it difficult for Greece to compete on the world market, but

it preserves many wine varieties and wines that would otherwise be drastically reduced.

The connection between wine and culture is fundamental. "Growing and

developing local grape varieties, not only in Greece but also in every wine-producing

country, highlights local cultural identities, the constant investigation and evolution of the

local varieties and their wines is a vital part of the concept of terroir, and feeds the

creative powers of the region's cultural identity” (Alley 2003). Santorini’s wine industry

is an excellent example of the ties between wine and culture. The wine history section

detailed how wine directly influenced the culture and lives of all Santorini residents.

New wine harvesting practices and techniques were developed to grow grapes in a tough

and harsh climate, such practices were indicative of the strength and resiliency of the

culture of the people of Santorini themselves fighting the very same unforgiving climate.

Wine harvests and festivals at the canavas were celebrations with music and food. All of

these cultural practices were exclusive to only Santorini. Yet today, the ties of the culture

to wine are being lost.

Santorini is going though what could be described as a cultural wine stagnation.

Santorini’s residents no longer work the vines. The vines no longer support them, tourism

does. The festivals and wine harvest have diminished in cultural significance. The

tradition of owning vineyards and not hotels is also in danger of being lost. Boutari’s

chief oenomologist Paraskevopoulos in Santorini stated, "When I first began working on

Santorini 10 years ago, I thought the issue was technology. Now I believe the real issue is how to convince people to continue to grow their vines. We are in danger of losing a

88 historic, rare and unique grape variety (Alley 2003). The impacts of tourism and development are again stated as reasons for lament, "The old vineyards of Santorini are being ripped up for hotels, and, of course, the more they rip up, the less natural beauty there is to attract tourists. The locals are abandoning their vineyards because it is no longer a profitable business for them. The younger people are not interested, and the average age of the vigneron here is 65. I just don't think the locals have caught on yet,"

(Alley 2003). With little to no financial incentive to remain in grape cultivation, farmers are building rental rooms to “cash in” on the tourist industry that dominates the island.

There is simply no wine culture left to adequately support the wine industry. The young residents of Santorini have not entered the wine field, and many old time farmers have left for the greener pastures of tourism. No one feels they must preserve the glorious and distinct wine traditions of the past. And since wine is so closely connected with

Santorini’s past, one wonders if the younger Santorinians realize that the loss of wine and vineyards, also means the loss of a long rich history their ancestors worked so mercilessly for. Therefore, with fewer and fewer wine growers and workers, less vineyards, and more and more rental rooms and hotels, one wonders how long the wine industry has left on

Santorini?

The next chapter will analyze and present an overview of the Santorini wine industry.

Chapter 4: The Economics of the Greek and Santorini Wine Industry

The economic analysis and overview of both the Greek and Santorini wine industry is the subject of this chapter. To properly analyze and understand all the many segments of the wine industry, this chapter has been split up into sections. The first sections of 4.1-4.6 focus on the economic underpinnings of the wine industry: wine as

GDP, wine production, wine employment, government support and regulation, and the wine market. The final sections 4.7-4.9 describe and analyze the wineries, cooperation between wineries, and wine tourism.

4.1 Wine as Part of GDP

Greece has an estimated GDP of 213 billions dollars in 2004 (World Factbook

2005). Of this, agriculture accounts for 6.7%, or over 14.3 billion dollars (World

Factbook 2004). Agriculture as a major economic sector in Greece has experienced steady declines since the 1970s. The percentage share of the agricultural product in GDP fell from 16.9% in 1973, to 14.4% in 1985, and subsequently in the last official data from

Greece, to just 6% in 1998. (Ministry of Rural Development and Food 2005). Wine accounted for up to 50% of earnings in Greece’s agricultural sector in 1997 (Messini

1997). Therefore, inferring from the 1997-1998 numbers (since they represent the last official data published by the Ministry of Rural Development and Food) wine is a roughly 7 billion-dollar business in Greece.

Upon Santorini, agriculture is currently the second largest sector of Santorini’s economy (when including construction in the tourism sector) even though it only makes up around 3% of the islands GDP. Yet of this 3% GDP, wine accounts for over 90% of agricultural earnings on Santorini (Santo Wines 2004). And wine also is the prevailing

agricultural product planted on Santorini—79% of cultivated land is devoted to vineyards

(See Figure 4.1).

Figure 4.1 Agricultural Land Use on Santorini 2004

St remma of Agricultural Product s

1% 0% 0% Barley 0% 1% 15 % Cabbage 1% Calif lower 3% Dry Onions Fresh Peas Dry Peas Fresh Beans 79% Tomat o Vi nes

Source: University of Cincinnati Sustainable Development Report 2004.

Wine is the dominant agricultural product, and hence, the second largest economic sector

on the island after tourism.

4.2 Greek Wine Production

Poor production methods, low yields, and lack of high quality bottled wine plague

the Greek wine industry. Until the 1970s, Greece lagged far behind other European wine-

producing nations. Growers' cooperatives developed a reputation for making poor quality

wines, which were usually sold from the barrel in Greek wine shops and restaurants.

Political instability and the lack of financial resources and technological know-how

perpetuated the production of low quality wines (Alley 2003). It is a wonder perhaps that

Greek wine has managed to establish any sort of reputation abroad (Alley 2003). And

what export has been done, has been mainly the work of a handful of enthusiastic

importers (Alley 2003).

The amount of vines under cultivation numbers 129,000 hectares, a number that

has been gradually decreasing in the last 20 years (Budd 2004). Land used for viniculture

has faced an annual decrease of 25% from the early 1980’s due to a EU eradication

policy to increase production, as well as the abandonment of many small and

unproductive family vineyards (Messini 1997).

4.3 Wine Production in Santorini

Santorini shares most of the aforementioned production problems that plague the

Greek wine industry. Santorini’s wine sector is as equally fragmented: it has a large Co-

operative, a large private winery in Boutari, nine other smaller private producers, as well

as a number of independent wine growers that make their own wine. The Co-operative

and the smaller produces experience many of the problems in finance and management as

other wineries in Greece. The amount of land under vineyard cultivation-- as has been

explained in the previous section-- has been decreasing every year. Exports account for but a small percentage of wine sales. Yields are relatively low compared to other countries and to the rest of Greece; costs of production are quite high relative to other countries and even to the rest of Greece.

The cost to produce wine in Santorini is much higher than the rest of Greece. The reason; the high cost of inputs, labor, and land prices including how very limited the amount of land available is to grow grapes. For 2004, the island’s wine cooperative paid

0.70 € per kilo for the grapes that the local farmers harvest (Santo Wines 2004).

Factoring in wages, land costs, and cost involved for growing grapes, the cooperative

92 estimates an average rate of return of 300 € per stremma (Santo Wines 2004). The price for raw grapes is much higher than in the rest of Greece, as is the price for land. The prices of land and grapes inflate the sale price, making the final product more expensive in comparison to other Greek wines (Santo Wines 2004). This high price barely covers the cost of production creating little economic return.

Yet, despite the high cost of Santorini wines, Santorini does have a large market for its wines-- the tourists. Tourists consume an overwhelming share of the wine produced on Santorini. Tourists visiting the island, are much more willing than the average domestic consumer to pay 15 euros or more for a bottle of Santorini wine. Wine marketing geared towards tourism sales will be discussed later in section 4.9. Yet, apart from tourists there is no substantial exportation of Santorini wine, with very little possibility that mass exportation will ever occur.

The exact yields and amount of stremmas devoted to wine growing are found in

Table 4.1 below. As one notices, production and stremmas actively cultivated each year is quite different due to the weather of each year.

Table 4.1 Quantity of Wine Produced and Stremmas Devoted to Vineyards on Santorini 1970-1999 Year Quantity (Millions of Liters) of Total Stremma of Vineyards Wine Produced 1970 5,000,000 22,000 1991 1,500,000 16,500 1993 3,100.000 N/A 1995 1,900,000 N/A 1999 4,200,000 15,000

Source: Danezis 2001, 479

As a whole, the island consists of 77,000 stremma with less than 15,000 stremma dedicated to vineyards. This represents an 11% decrease from the amount of land devoted

to vineyards in 1970 when over 22,000 stremma were cultivated for grape production

(See Figure 4.5). To better understand both the decrease in vineyard acreage, and where

vineyards are located on Santorini, The actual map of vineyards is found below in Figure

4.5.

Figure 4.2 Two Maps Documenting Change in Vineyard Coverage on Santorini

1970-2004

Vineyard Coverage on Santorini in 1970 Vineyard Coverage on Santorini in 2004

Source: University of Cincinnati Sustainable Development Program 2004

As one notices, vineyard coverage has visibly decreased since 1970, especially in

the center, and western parts of the island. The reason these areas have lost their

vineyards is due to the fact new tourism development has been most prevalent in the

north and western parts of the island. Land that was being cultivated as vineyards, now

either lies untended, or has rental rooms, hotels, and other tourism related development built upon it.

Figure 4.3 Old Untended Terraces

Source: Photo by Andrew Meyer, 2004

4.4 Wine Exports

In terms of exports, Greece runs a trade surplus with the rest of the world; ten

times more wine is exported than imported (Messini 1997). This statistic is supported

due to the fact that Greek wine consumers are fanatically nationalistic in preference for

the consumption of their own domestic wine. In 2002, 96% of all wines consumed in

Greece, were domestically produced (Giamniadakis 2003). The wine that is exported

amounts to 18% of production, whereas just 2% of wine consumed in Greece is imported

(Messini 1997). Of wine that is exported, table wine amounted to 74% of exports in

1997—a total that has continued to decrease (Messini 1997). High quality VPQRD wines have rapidly increased their share as exports up to 7.4% (Messini 1997). However an increase in the VAT to 18% on all types of wine has hurt overall wine sales.

Greece exports over 90% of this wine to the EU: France and Germany combined buy 68% of exported Greek wine (Messini 1997). Annual exports of Greek wine to the

US represent only some 180,000-200,000 cases in 2004 (Budd 2004). In terms of total exports of wine in the EU, Greece had a miniscule 0.1 share in 2003 (EU Countries

Exports 2004). Total export numbers of Greece amount to 2,205 million liters in 2002,

16,416 million liters in 2003, and 4,491 million liters in 2004 (EU Countries Exports

2004). Therefore it is obvious Greece is very far behind its competitors like France and

Germany who export hundreds of millions of liters of wine each year.

4.5 Wine Industry Employment

Agricultural employment constitutes 20% of the total employment in Greece, compared to 30% twenty years ago (Ministry of Rural Development and Food 2005).

Agricultural employment when measured in annual work units of labor dropped from

956,000 units in 1980 to 644,000 in 1996 (Ministry of Rural Development and Food

2005). Moreover, the loss of agricultural employment will most likely only continue, as over 60% of the heads of agricultural holdings are over 55 years of age (Ministry of Rural

Development and Food 2005). Agricultural employment is thus in a time of flux in

Greece; fewer workers are needed, and those that remain are rapidly reaching the age of retirement. Trends we are about to discover, that are reflected in the Santorini wine industry.

In terms of employment and land ownership, nearly ten percent of the island’s residents participate in the annual grape cultivation. As discussed, there are almost

12,000 residents living year-round on the island; thus approximately 1,200 persons are involved in grape picking or cultivation (Santo Wine Cooperative 2004). Of those 1,200 persons, the vast majority of workers are involved only briefly for the actual harvest of the grapes. Approximately 1,000 residents own or work briefly on their family vineyards, and the average vineyard size on the island is between 15-20 stremmas (Santo Wine

Cooperative 2004). Between 100 and 150 of these vineyard owners are large landowners of vineyards—over 20 stremmas (Santorini Wine Cooperative 2004).

Table 4.2 Selected Manufacturing Employment on Santorini by Company Company Name Industry Employees per Company

Santo Wine Cooperative Winery/Bottling 33 Canava Roussos Winery/Bottling 15 P. Nomikos Winery/Bottling 10 G. Koutsoziannopoulos Winery/Bottling 10 I.M. Arziriou and Sia O.E. Alcohol and Vermouth 10 bottling Ziannis Koiliakoidis O.E. Production of Ready Mix 12 Cement Shell A.E. Jet Fuel 3 St. Roussos Carpentry 3 G. Bambakousis Carpentry 3 A.N. Zorzos Carpentry 2 Source: University of Cincinnati Sustainable Development Report 2004

In terms of full time employment, there are between 50 and 60 individuals employed by the local wineries, including Santo Wines, the island’s cooperative (Gavalas

2004). The list of how many employees each winery has, and the name of their employer, is presented in the graph below. This graph lists the major manufacturing employers on Santorini. The graph shows that wineries and bottling account for more than 80% of manufacturing jobs.

As for the aforementioned part time workers, Santorini vineyards require an average of four labor days per stremma for cultivation (Santo Wine Cooperative 2004).

The season begins in November, some maintenance in March, and harvesting in August

(Santo Wine Cooperative 2004). It is during harvesting, that the vast majority of the

1,200 part time workers become a part of wine business; and in fact, the annual harvest of

Santorini’s vineyards is as much a cultural practice and experience as a purely economic one. One of the benefits of needing just four labor days per stremma is that the minimal time required for vineyard cultivation and maintenance, allows small farmers to complete their harvest quickly, and finish the majority of the work during the tourist off-season.

This off-tourism season schedule enables the small farmers to maintain full-time employment in the tourism sector during the tourist season. Without such a harvest and maintenance schedule, many farmers and part time workers would most likely not even be part of the grape cultivation process, as the amount of money to be made caring for and picking grapes, is far less than what can be made in the tourism industry (Santo

Wines 2004). It is partially for this reason, that so many vineyards have been abandoned; there is simply no one to pick and care for the grapes. Economically, a resident makes more money working in the tourism industry than they do growing grapes. The other reason is the loss of farmers to retirement. A vast majority of the older laborers and vineyard owners have reached retirement age. Although there are no reliable statistics to be acquired to numerically prove this statement, one only needs to spend a little time on

Santorini to discover the majority of farmers are quite old. Two middle age farmers

Petros Ekonomou and Manolis Sigalas, were interviewed as part of the 2004 University of Cincinnati Sustainable Development Program. Each farmer stated they were the last

of a dying breed of farmers (Ekonomou and Sigalis 2004). The children of these farmers,

and the future generation of Santorini want no business working the land or tending the

grapes. It is hard work compared to serving coffee or taking reservations. When the last

generation of these farmers succumbs to age, Santorini may be in an even more difficult situation in regards to labor and even vineyard ownership. Santorini vineyards owners may be forced to import cheap labor from Albania and other neighboring countries to

pick grapes and work the vineyards. Yet such a cost effective solution does run into a

variety of problems for the island, as these migrant workers will find it difficult and

expensive to live on Santorini. Where will the migrant workers stay during the August

harvest? Do residents want an influx of poor migrant workers living on a rather high

class and exclusive tourist island? Can they afford the high costs of living on a tourist

island while earning low agricultural wages? The answer is clearly a difficult one.

One very large vineyard landholder Nikos Zorzos with land in the south of the

island around Akrotiri and Emborio, mentioned how increasingly difficult it is to find

workers willing to pick grapes (Zorzos 2004). Mr. Zorzos cannot even find a true expert

to oversee the harvest process. Mr. Zorzos is forced to oversee the harvest himself

despite the fact he has no oenological training (Zorzos 2004). Such situations are

apparently common to all the non-corporate owned vineyards. Clearly, if one of the

largest vineyard owners of the island cannot find an expert, what happens in the future?

What of the small vineyard owner? The Santorini wine industry, already faced with low

yields and limited land area available for cultivation, has a major problem on its hands;

how to employ enough people to harvest and care for the grapes.

Figure 4.4 Old Time Farmer Amongst Vineyards

Source: The Santorini of Santorini 1995, 91

4.6 Government Support

Greece wines suffer from a lack of government support. In a country where the public sector makes up 40% of the economy, yet wine is not supported or promoted, and left to the regulations of the European Union and the vagaries of the European market

(World Factbook 2005). The Greek wine industry receives little support from the

100 national government, the support that is given, is generally by the European Union. The

European Union has adopted a package of stabilization measures to reduce expanding surpluses: these measures include the abandonment of wine-growing areas, compulsory and voluntary distillation accompanied by a drop in the support price of surplus wine

(Messini 1997). This program has yet to be effective, and has only served to decrease areas under cultivation resulting in a drop in the overall supply of wine. A separate independent group, The Greek Sectorial Research Department Foundation for Economic and Industrial Research, was set up by Greek banks and industry to make up for the lack of governmental research. This group researches the Greek wine industry. The government also does not sponsor wine marketing as do the governments of Italy, U.S.A,

Australia, and France. Greek wineries are left to fend for themselves on the world market, further decreasing their competitiveness (Budd 2004).

Greece also does not have any protective tariffs in place for their wine industry.

This is in stark contrast to the U.S.A., Australia, France, and Italy. In these countries, tariffs on imported wines have helped to protect and spur the domestic wine industry.

Yet, in Greece, these measures have never been enacted, possibly due to the fact Greek domestic wine was much cheaper to Greek residents, and thus its price competitiveness served as a natural tariff. If anything the Greek government has sponsored legislation that has harmed the wine industry by raising the value added tax on alcohol from 6% to

18% in the 1990’s. As has been aforementioned, this tax has accompanied a drop in both consumption and production of all alcohol-- especially wine.

On Santorini, no organization exists to either support or market Santorini wine other than the Santo co-operative (Santorini Merchants Association 2004). Recently the

101

Santo co-operative has made efforts to market Santorini wine through the use of a new

website, and the entering of Santorini wine into international competitions. The

municipality is creating a visitors center in Fira that will showcase Santorini products including wine (Santorini Merchants Association 2004). But other than the visitor center

and the Santorini website, Santorini wineries have no government support structure.

4.7 Wineries

Santorini is home to ten different wineries. Some like Santo and Boutari are large,

and have modern production capacities. Others like Antoniou and Sigalis are small estate

style wineries that produce small batches of fine wines. And others still, like Art Space

Kous, and Canava Roussos, produce wine using the traditional Santorini winemaking

methods.

The increases in production and quality that have occurred have also been reflected

in the building of a number of new wineries upon the island. Boutari’s modern winery

has a 2,000 ton capacity (The Santorini of Santorini 1995). The Santo wine cooperative

also opened a new modern winery in the 1980’s that currently produces 3,000 tons of

grapes annually (Santo Wine Cooperative 2004). Petros Nomikos’ new winery also is relatively new, and technologically advanced. What all the wineries share in common is a commitment to preserving the unique architectural history and form found on Santorini.

Antoniou, Sigalis, Art Works, Canava Roussos, and Nomikos all operate their wineries in traditional Santorini buildings—some in old Canavas themselves. Even the new modern wineries such as Boutari and Santo, have designed and built wineries with the old traditional architecture and environment in mind.

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Thus the Santorini wineries have preserved the unique architecture, and even updated it, an important development that we shall see later can be exploited for wine tourism purposes.

4.8 Cooperation

One of the greatest problems facing the Greek wine industry is the lack of cooperation between wineries. This is a major problem as cooperation between wineries results in shared costs and thus reduced costs for research and development and marketing. Greek wineries and wine producers must work together if they expect to become successful on the world market (Budd 2003). Simple relationships between wine producers to share new wine varietals, production and marketing ideas; wine networks etc. are non-existent in Greece (Budd 2003).

Perhaps this mistrust of other fellow Greeks, and the continual contest to be the best, can be traced back to antiquity. Nietszche describes Greek antiquity as a time when honor, and natural gifts were developed by the means of the contest. This competition comprised individuals whom were but instruments for the welfare of their city-states, that were in a perpetual state of competition (Nietszche 1912, 58). Today, Santorini is in such a contest with the rest of Greece. Santorini’s grape varieties are guarded, as is her unique process of making Vin Santo. Santorini wine strives to better her Greek competitors, but such competitions have their pitfalls. Santorini and her wine cooperative will not form partnerships with other Greek wine producing islands and regions, nor will the separate wineries within Santorini actively work together and create real networks and marketing plans. As Robinson points out, feuds and factions lamentably divide Greek wine producers (Robinson 2004).

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The consequences of such isolation and rampant distrust among wineries, result in

the current wine industry found in Greece and Santorini today. Wineries themselves do

not have the necessary capital or resources to successfully market, modernize, and

develop their wines. Only a major private producer like Boutari, has the resources and

clout to even successfully market their wines to distributors throughout the world.

Without any government support, or private co-operation, how can small Greek and

Santorini wineries compete? Without co-operation the wineries of Santorini and Greece,

are destined to follow the same insular pattern they have followed for years; they have

neither the money to innovate, nor to market. Thus nothing will change; Greek and

Santorini wine will remain a secret to the rest of the wine-drinking world.

4.9 Wine Tourism

Wine tourism is critical to the economic potential of Santorini’s wine industry.

Today, the great majority of Santorini wine is first discovered and drank by tourists--not wine connoisseurs. Tourism of course, is the economic lifeblood of the island, representing almost the entirety of economic activity; estimates of its share of the economy go as high as 97% of Santorini’s GDP (Gyzis 2004). And as we have discovered, tourism is encroaching upon Santorini’s vineyards, leaving the industry with a troubling paradox: wine is dependent on tourism for its survival, but tourism also is leading to the death of the Santorini wine industry. Wine tourism stands as a natural symbiosis for both the wine and tourism industry. The tourism industry, which has faced sharp declines in tourism arrivals over the last ten years, would benefit from attracting new wine tourists to supplement the eroding trends of the industry. Wine tourism of course, only adds to the allure of Santorini as a tourism attraction, but at present

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knowledge of wine tourism; be it wine tourism networks, wine trails, and the wine tourists themselves is in its infancy in Santorini. This section will describe the prevailing research on wine tourism.

Wine tourism can be defined as visitation to vineyards, wineries, wine festivals and wine shows for which grape wine tasting and/or experiencing the attributes of a grape wine region are the prime motivating factors for visitors (Hall and Macionis 1997).

Macionis describes a model of wine tourism based around a special interest in wine motivated by the destination (wine region), the activity (wine tasting) or both (Hall and

Macionis 1997). Wine tourism’s potential to wineries has not been fully understood, although tourism is important for many wineries in terms of the ability to sell wine either directly to visitors through cellar sales or to place such customers on a direct mail order list; tourism, if mentioned at all, is often seen in very disparaging terms with the implication being that those who are seriously interested in wine are not tourists (Hall and

Macionis 1997).

Wine tourism is essentially an industry tied to a specific wine-producing place— like Santorini. Wine and tourism destination regions are both spatially fixed: as with

tourism, wine is "one of those rare commodities which is branded on the basis of its

geographical origin" (Merret & Whitwell, 1994, p. 174). Wine regions may therefore

overlap with tourism destination regions in both a spatial and a perceptual sense offering

substantial opportunities for cross-branding and promotion, a situation which is occurring

in a number of high profile wine regions around the world (Hall and Macionis 1997).

This is most certainly the case in Santorini, where wine is being promoted, and branded, as coming from this scenic tourist island; every tourist should buy a bottle of Santorini

105 wine to take home not only part of Santorini, but a memory of their vacation. The wine development of Santorini is thus quite primitive and has yet to reach its true potential. To tap this potential, three contemporary wine tourism ideas will discusses and described in detail: 1) Regional/and or Government Wine support; 2) The Establishment of Wine

Networks and Wine Trails; 3) Brand Equity/Knowledge of Wine tourisms.

4.9.1 Regional/ and or Government Wine Support

The development of wine tourism is especially linked to government support and involvement. The trend for government support is most apparent in Australia’s creation of regional wine tourism agencies, as we shall later see in Chapter five. In Santorini’s case, the Greek government—be it in the prefectures, or national--is unfortunately uninvolved in the sponsoring or creation of wine tourism agencies. Thus, Santorini must look to the E.U. guidance. Throughout Europe, one of the most important causes of development of wine tourism in Europe is the extent to which the establishment of wine tourism organizations have been related to the provision of European Union funding to assist in regional development schemes under the E.U.'s restructuring programs (Hall and

Macionis 1997). Without such financial support it seems unlikely that the vast majority of

European wine tourism networks at either international or national level would have been established when they were (Hall and Macionis 1997). One of the reasons stated for this trend is the partially industrialized nature of tourism. Therefore, in most circumstances, unless there is a financial motive for wine businesses who do not perceive themselves as part of tourism industry to create linkages with tourism businesses, it will often require an external inducement, such as the establishment by government at no or minimal cost to individual businesses, to create new network structures (Hall and Macionis 1997). In the

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case of Santorini, the wineries do see themselves as part of the tourism business; however, the wineries as has been noted in this paper, are loathe to work cooperatively, suspicious, and thus the likelihood of a true wine tourism network created without government support is highly unlikely.

4.9.2 Wine Networks and Wine Trails

Despite the need for government support and involvement for their creation, wine networks and wine-trials embrace the most efficient means of wine tourism. Wine-trails are, "the best framework for cooperative work between government, private enterprises and associations, the tourism industry, wine and the local council" in encouraging regional development and job creation (Hall and Macionis 1997). In addition wine-trails, from the perspective of individual producers, "an opportunity exists for the winegrower to establish advantageous connections and a strategically important means of obtaining trade in high quality produce which encourages the development of direct sales and levels of awareness, and consolidates the image of products as well as creating a loyal consumer market" (Hall and Macionis 1997). Wine networks not only represent flows of corporate information, e.g. research and promotion, but, from a tourism perspective, they also represent flows of tourists on the ground; in other words, the economic and social characteristics of networks parallel the flow of goods and services including tourists (Hall and Macionis 1997).

4.9.3 Brand Equity

Another idea being promoted in wine tourism especially through the Journal of

Wine Research is that of brand equity. Brand equity is a sum total of the attributes of a brand: awareness, loyalty, perceived quality brand associations and other brand assets

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(Lockshin et.al., 1996). In order to develop and enhance brand equity through tourism,

wine managers need to understand the concept and its building blocks. The building blocks include understanding just who the wine buyers/tourists are-- a concept that has been split up into two categories: High Involvement Buyers, and Low Involvement

Buyers (Lockshin et al., 1997).

High involvement buyers make up about one third of wine buyers, but buy more wine and spend more dollars per bottle than low involvement buyers; they do not have to be wine experts, but they do seek information (Lockshin et al., 1997). Low involvement

buyers reduce their purchase risk by sticking to a group of well-known brands (Spawton

and Lockshin 2001). Low involvement consumers are also more likely to be loyal to a

small range of brands, than high involvement buyers (Spawton and Lockshin 2001).

High involvement buyers use complex cues to make purchase decisions, such as region,

style, wine maker, vintage, and vineyard. Low involvement buyers tend to stick with

price, variety, and brand as cues to which wine to purchase (Spawton and Lockshin,

2001).

The reason why the need to understand such a split is important is because the

intention of each wine tourists visit is critical to understanding why and what wants and

needs they have for their visit. Intention is the relationship of the tourist’s general level of

interest in wine to their immediate purpose of visiting a specific winery and the reasons

for their overall presence in the region--their plans to visit non-wine related attractions

(Charters and Ali-Knight 2001). For example, the most dedicated connoisseur may pop

into a cellar door of a winery for two minutes just to buy a bottle of wine to take home

with them, or for their dinner without even tasting. Alternatively, the wine novice may

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attend an hour long guided tour of the winery followed by a tasting of older vintages. In

assessing the process of wine tourism it is therefore useful not just to think of the type of

the wine tourist, but also of their intention at a specific time of consumption (Charters and Ali-Knight 2001). Charters and Knight have devised the diagram below in Figure 4.9 to represent the relationships of low intention and high intention buyers to wine tourism

motivation. Charters and Knight hypothesize it is possible to use Figure 4.9 to plot the

type of wine tourist and their activity on any given visit to a winery (Charters and Ali-

Knight 2001). The process of doing this would enable the winery to understand, more

clearly, the purpose of the visitor and motivation, what their visitors expect at any one

time, and how they can more effectively meet their expectations (Charters and Ali-Knight

2001).

Figure 4.5 Diagram of Wine Tourism Motivation

Source: Charters and Ali-Knight 2001

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Now that all the information of Santorini wine has been analyzed and described, the next chapter will focus on the two wine models for comparison with Santorini.

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Chapter 5: Two Successful Wine Models: Australia and South Africa

Two successful wine models were chosen to compare and contrast with the Greek

and Santorini wine industry. The two models are Australia and South Africa, two of the most successful wine industries in the world today. These two models were selected because they represent two different ways but successful ways of structuring a wine industry that can be applied to Santorini. Australia represents government support and involvement, while South Africa relies totally on private organizations and cooperation.

Another major reason why these countries were selected, is because they both have been

frequently written about, and they both offer access to detailed information about their wine industry. Such models or information does not exist for more similar wine

producing areas to Santorini like the island of Madeira.

5.1 Australia

Australia in the last twenty years has become the center of wine innovation. Wine

production and exports have been growing exponentially over the last twenty years. Wine

quality has made drastic improvements parallel to production. The wine research and

technology of Australia lead the world, produce a number of academic wine journals, and

have trained the best oenologists and wine experts in the world. The country has

developed the prevailing modern wine marketing and co-operation between wineries

strategies and research used throughout the world wine market today (Anderson 2004).

One of the primary reasons for the Australian wine industry’s success stems from

Australia’s comprehensive government support and regulation, and the extensive cooperation of the private wine industry (Anderson 2004, 272-277). The government and private industry in Australia have collaborated to internalize externalities and to

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overcome the free rider problem of collective action (Anderson 2004, 272). Australia has

no less than eleven government created, wine industry supported and recognized wine

industry bodies; they are: The Australian Society of Viticulture and Oenology, The

Australian Society of Wine Education, The Australian Wine Research Institute, The

Australian Wine and Brandy Corporation, The Australian Wine Export Council, The

Cooperative Research Centre for Viticulture, The Grape and Wine Research and

Development Corporation, The Winemaker’s Federation of Australia, The Winegrape

Grower’s Council of Australia, The Wine Information Centre, and The Wine Industry

National Education and Training Council Incorporated. In total, there are more than eighty local, regional, or national wine organizations within Australia (Anderson 2004,

272). These eleven government supported or created bodies all represent or support eight different areas of the wine industry: 1) wine technology and research; 2) wine training and teaching, and vocational training/ education; 3) wine promotion and marketing; regulatory administration; 4) export development; 6) political lobbying; 7) co-ordination between independent wineries; 8) and point of sale expertise. The Australian wine industry therefore has a very well developed support structure for its wine industry.

For the purposes of this thesis and comparison with Santorini, only the two largest and most influential organizations will be studied in detail in the government support/agencies section: the Australian Wine and Brandy Company, and the Grape and

Wine Research and Development Corporation. In addition to these two major agencies, the following areas of Australian wine industry have been selected and analyzed in this study: 1) Wine statistics and production data, 2) government support and agencies 3) exports, 4) wine tourism strategies and organizations.

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5.1.2 Statistics and Production Data

Australian wine production has increased quite dramatically in the last twenty

years. In 2002—the last year of official data available--over 1,174,101 ML of wine was

produced in Australia (Australian Bureau of Statistics 2005). This volume total represented a 13% gain from the year before. In terms of tons of grapes produces,

Australia produced 1,546 million tons in 2002, ranking it tenth in the world (Australian

Bureau of Statistics 2005). The growth in production from just 1999 to 2002 is quite

astonishing; in 1999 Australia produced just 720.5 million tons of grapes, compared to

the more than double 1,546 million tons of 2001 (Halliday 2000, 159); (Australian

Bureau of Statistics 2005). Comparing total wine production throughout the world,

Australia stands in sixth place (Australian Bureau of Statistics 2005).

Figure 5.1 Area of Australian Vineyards 1978-2000

Source: Australian Bureau of Statistics 2005

These ever increasing wine production numbers are products of the Australian

Wine Foundation’s five year plan for 1996-2002, that called for volume growth through

113 massive vineyard expansion (Australian Wine 2005). From 1992-1995, 11,000 hectares of new vineyards were planted (Australian Wine 2004). Today, the Australian Bureau of

Statistics estimates that 158,595 hectares of land are being cultivated for wine, while

11.9% of this total consists of new vines that are still to young to bear fruit (Australian

Bureau of Statistics 2005). Figures 5.1, and 5.2 below, depict the increase in vineyards and new plantings.

Figure 5.2. Area of new vineyard plantings 1992-2000

Source: Australian Bureau of Statistics 2005

The increases in vineyard area have also corresponded with increases in total number of wineries. In 2001, there were 1,465 wineries, in 2002 there were 1,625 wineries; a 10.9% increase in wineries in one year (Australian Bureau of Statistics 2005).

Australia’s wine export sector is especially strong. In 2002, 471.4 ML of wine was exported, making Australia the fourth largest wine exporter in the world (Australian

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Bureau of Statistics 2005). Again, the increases in export wine in just one year are impressive: from 375.1 million HL to 471.4 million HL in just one year—a 25.7% increase (Australian Bureau of Statistics 2005). These numbers, and others previously mentioned are found below in Figure 5.3. These export figures show how the Australian wine industry is structured for export, not consumption. Domestic wine sales of 441.5

ML are less than the aforementioned export sales of 471.4 ML (Australian Bureau of

Statistics 2005). In addition, in Figure 5.3, domestic sales increase just 4.7% from the

previous years, much lower than the 25.7% export sector increase (Australian Bureau of

Statistics 2005). Hence it is clear, the Australian wine industry is one that is not only

rapidly growing, but it is growing in terms of export sales.

Table 5.1 Australian Wine Statistics

2001 2002 (%) Wineries 1,465 1,625 10.90% Vineyard area2 (ha) 148,275 158,594 7.00% Tonnes crushed (2002 vintage) 1,391,082 1,649,574 18.60% Beverage wine production (ML) 1,034.80 1,174.10 13.50% Domestic sales (ML) 395.7 414.5 4.70% Exports (ML) 375.1 471.4 25.70% (A$ million) 1,757 2,288.80 30.20% (A$/L) 4.69 4.86 3.60%

Source: Australian Bureau of Statistics 2005

5.1.3 Government Regulation/Support

Australia has developed some of the most forward thinking and practical

government regulations for the wine industry in the last twenty-five years. Australian

parliament created two major statutory government bodies to direct and embody the

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Australian government’s regulations and support of the Australian wine industry: The

Australian Wine and Brandy Corporation and The Grape and Wine Research and

Development Corporation.

In 1980, the Australian parliament created the Australian Wine and Brandy

Corporation (AWBC) to serve as the regulatory body of the wine industry; to promote

and develop marketing strategies for Australian wine; and to collect and disperse data and information on the Australian wine. In 1991, parliament created the Grape and Wine

Research and Development Corporation (GWRDC). The GWRDC is focused on research and development, and distributing research and development funds. The AWBC, and the GWRDC have also created and funded three other sub-organizations: The Wine

Industry Information Center, Wine Industry National Education and Training Council, and The Australian Wine Export Council.

Australian Wine and Brandy Corporation

The AWBC was granted the powers by Australia’s parliament and law to:

To promote and control the export of grape products from Australia; to encourage and promote the consumption and sale of grape products both in Australia and overseas; to improve the production of grape products in Australia; to conduct, arrange for, and assist in, research relating to the marketing of grape products; and such other functions in connection with grape products as are conferred on the Corporation by the Act or the Regulations (Australian Wine and Brandy Co. 2005).

In essence, the AWBC boils down these legal functions to just three major goals

or outputs: Market Development, Knowledge Development, and Quality and Integrity

that will be discussed later. The AWBC has as its clients and stakeholders:

• Wine and brandy exporters - export promotional material, assistance in overseas markets, export licenses, export documentation and approvals, information.

• Wine and brandy producers - label integrity assistance, domestic promotional material, information.

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• Grape-growers and their regional associations - geographical indication registration, information.

• Wine industry suppliers and consultants - information.

• Wine research organizations - information.

• Academics, students, lawyers, financial institutions and advisers and the public - information. (Australian Wine and Brandy Co. 2005).

These clients pay levies leveled on grapes, grape juice, and dried grapes to the

AWBC; hence the funds to support the AWBC are paid by both private wineries, and the government (Australian Wine and Brandy Co. 2005). In addition, a number of wineries were given the power of voting at the Annual General meetings (Australian Wine and

Brandy Co. 2005). Hence, the AWBC is in effect, a public/private partnership and agency.

Market Development - Growing the Markets

The AWBC’s promotional arm, the Australian Wine Export Council (AWEC), markets and promotes Australian wine throughout the world. AWEC has offices in

Australia, London, The Hague, Frankfurt, Tokyo, New York and Toronto to promote and market Australian wine. AWEC also runs a series of collaborative wine promotional programs throughout the world to strengthen the image and reputation of Australian wine. AWEC provides marketing and promotional assistance to individual Australian wineries with their export activity. AWEC markets and promotes by producing point-of- sale material in a number of languages, and it sponsors visits by influential international wine writers and buyers to Australian wine regions and events. AWBC also plays a leading role in addressing international market access issues on behalf of the industry.

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For example, today, Australia has a favorable export agreement with the EU that

recognizes Australian Geographic Indications, as well as favorable tariffs.

Knowledge Development - Better Decision Making

To provide Australian wine producers with the most accurate and up-to-date

information to make effective decisions, the AWBC collects and analyses wine industry

statistics and hosts a AWBC Information Centre -- a one-stop shop for wine industry

information. It also sends out a newsletter on the latest wine news and ideas to all wine

producers. The AWBC also has an extensive database of Australian wine export

information available to the industry and other stakeholders.

Quality and Integrity - Maintaining the Reputation

The AWBC’s regulatory activities preserve Australian wine’s internationally

recognized reputation for quality and integrity, which has played a significant part in the

industry’s growth. The AWBC inspects and issues permits for all Australian wines and

brandies destined for export. It runs a label integrity program to prevent false or misleading labeling. The quality standards developed by the AWBC were largely a

consequence of an Australian-EU international wine agreement that affects not only

Australian wine exports, but imports as well (Anderson 2004, 277). The quality and integrity of Australian wine has been one of the major marketing tools for Australian wine throughout the world (Anderson 2004, 276).

The AWBC has also set up the Geographical Indications Committee, which defines and protects the identities of Australia’s grape producing regions. (Australian

Wine and Brandy Co. 2005). The Geographical Indication (GI) is an official description of an Australian wine zone, region or sub-region. Its main purpose is to protect the use of

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the regional name under international law, limiting its use to describe wines produced

from wine-grape fruit grown within that Geographic Indication. The Geographic

Indication can be likened to the Appellation naming system used in Europe (e.g.

Santorini’s) but is much less restrictive in terms of viticultural and winemaking practices

(Anderson 2004, 276). In fact the only restriction is that wine that carries the regional

name must consist of a minimum of 85% of fruit from that region. This protects the

integrity of the label and safeguards the consumer. Those factors that determine a

Geographic Indication include: history (general, grape growing and wine production),

geology, climate, harvest dates, drainage, water availability, elevation, traditional use of

the area and name.

Grape and Wine Research and Development Corporation

The Grape and Wine Research and Development Corporation, was

established in 1991 under the Primary Industries and Energy Research and Development

Act 1989 (PIERD Act). The GWRDC is an Australian Government statutory authority

governed by a Board of Directors. The GWRDC supports the growth of the Australian

wine industry by planning and funding collective research and development (R&D)

programs and then facilitating the dissemination, adoption and commercialization of the

results throughout the industry (Grape and Wine Research and Development Corporation

2005). The GWRDC does not undertake R&D itself; instead it purchases R&D from existing providers, (such as universities and The Australian Wine Research Institute) on behalf of the Australian wine industry (Grape and Wine Research and Development

Corporation 2005). Again like the AWBC, funding for R&D investment comes from levies on the annual grape harvest and wine yield, with the Australian Government

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providing matching funds. The Australian Federal Government matches producer levies dollar for dollar up to a maximum of 0.5 per cent of the gross value of output (Anderson

2004, 274).

The GWRDC has four broad R&D investment programs that will be discussed in

detail, and a twenty-five year strategic plan. The four research strategies are:

1.Innovation and Technology Adoption, 2.Sustainable Production, 3.Quality and

Differentiation, 4.Market Intelligence.

Innovation and Technology

In regards to Innovation and technology adoption, the GWRDC believes it is

critical to the growth and development of the industry, as it provides the essential new

knowledge and know-how to help solve production problems and grasp market

opportunities. Australia has earned an excellent reputation as one of the most

technologically advanced wine-producing nations in the world. A study from 1996— before the creation of a number of Australian wine journals—Australia itself published over 20% of the global flow of papers on viticulture and oenology (Anderson 2004, 274).

The industry’s highly innovative approach has helped Australia become an extremely successful exporter of good value, high quality wines. In fact, Australia exports the services of its viticulturalists and Oenologists throughout the world—even to France

(Anderson 2004, 275).

The GWRDC has made progress with the development of methods to map variability in the vineyard and to predict yield that have resulted from investment in research into a range of matters including: precision viticulture, electromagnetic soil surveying, remote sensing to characterize variations in crop vigor, and vine physiology to

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provide a better understanding of influences on grape quality and crop levels (Grape and

Wine Research and Development Corporation 2005). The GWRDC’s laboratory analyses

wine samples each year-- 2,231 in 2002-2003--using a wide range of routine and special

analytical techniques to make sure certain problems are now being better managed by

winemakers (Grape and Wine Research and Development Corporation 2005).

The GWRDC’s Viticulture’s On Farm Trials and workshops share information

about the potential advantages of applying the ideas and technologies resulting from

GWRDC research. These trials and workshops, as well as the distribution of a

comprehensive viticulture guide, have been utilized by Australian wine producers, “A

survey has shown that 70% of participants in Research to Practice workshops have

altered practices or planned changes as a result” (Grape and Wine Research and

Development Corporation 2005).

The GWRDC also uses a Regional Innovation and Technology Adoption (RITA) that is a funding source that recognizes the importance of addressing regional differences

within a national R&D wine framework. A maximum of $15,000 is provided for projects,

but applications are accepted only from wine industry groups. To receive RITA funds,

local needs assessments are performed, and the evaluation of the research results in each

project; examples include clarification of symptoms and infection patterns of Australian

grapevine Yellows in the Riverland, better control of elephant weevil at Langhorne Creek

(Grape and Wine Research and Development Corporation 2005). Funds have also been

used to extend information and enhance skills of growers when challenges in their

regions emerge.

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Sustainable Production

Sustainable wine production is another area the GWRDC is a leader in. The

GWRDC believes an essential part of Australia’s success has been the development of

production systems that save labor and minimize inputs of water and chemicals. The

mechanized harvesting and pruning, technology for more efficient delivery and

monitoring of irrigation water, integrated pest management, herbicide reduction

strategies, an improved understanding of vineyard requirements as well as the behavior of

pests and diseases, vineyard floor management studies and in some cases adoption of

organic systems, have all played a significant part in creating a more sustainable mode of

production in Australia’s vineyards.

Quality and Differentiation

GWRDC also does a great deal of research and sharing on understanding grape

quality, spoilage, flavor, and processing. Influences of environment and vineyard

management on grape quality are becoming better understood through research such as

berry sampling and scoring, as well as grower observations and recordings encouraged

through extension activities (Grape and Wine Research and Development Corporation

2005). Research into reasons for microbial and chemical spoilage such as hazes, deposits and microbial instabilities etc, is shared with winemakers enabling them to undertake practices that preserve product purity (Grape and Wine Research and Development

Corporation 2005). Identification of key aroma and flavor active molecules important to sensory wine characteristics enables the more efficient targeting of viticultural and oenological practices to optimize wine styles and to properly measure them (Grape and

Wine Research and Development Corporation 2005). Research has also been initiated to

122 address the process time for wine clarification; to reduce settling time a clarifying agent bentonite is being investigated to enhance process efficiency (Grape and Wine Research and Development Corporation 2005).

Market Intelligence

Like the AWBC, the GWRDC also invest time and resources into understanding and providing information on the global wine market. The GWRDC market intelligence maps supply and demand trends for varieties grown in Australia, for wine producers to use when considering expansion or replanting existing vineyards. Each year the GWDC publishes and has conferences on comprehensive information on the market requirements for varieties plus production forecasts. The information contained in these reports includes tariff levels, technical requirements such as product labeling, and matters relating to protection of intellectual property rights (Grape and Wine Research and

Development Corporation 2005).

Strategic Plan

Strategy 2025 devised in 1996, is the Australian Wine Industry’s strategic plan.

Strategy 2025 articulates the Australian wine industry's direction, ambitions and requirements for the next 30 years. The GWRDC's aforementioned s program priorities are derived directly from industry needs as delineated in the thirty-year strategic plan. In the first five years of the plan—1996-2001—volume building to build a larger export industry was the focus; the plan as we have seen in section 5.2, was successful. The current plan of 2002-2007 is focusing on increasing quality, market share, and market awareness of Australian wine. The final years of plan presuppose and plan for

Australia’s dominance as an export wine country.

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5.1.4 Wine Export

Wine exports are the linchpin and the focal point of the Australian wine industry.

As aforementioned, the government created wine bodies clearly have made export their

top priority; the underlying reasons for everything from technology to marketing is to improve and increase Australian wine exports. This trend towards export makes sense, as

Australia is a small country with just 22 million residents, 155,000 hectares of vineyards, and over a million HL of wine produced each year; unlike California and Greece, the domestic demand for wine is not sufficient enough to support such a large wine sector.

Wine consumption in Australia is comparatively low when compared to other wine producing countries; in fact Australia doesn’t even crack the top 15 wine consuming nations (Australian Bureau of Statistics 2005). Domestic wine sales have leveled off to

natural and modest single percentage increases-- 4.3% in 2002(Australian Bureau of

Statistics 2005). Therefore it makes sense that the Australian wine industry would turn to

exports, it is a country with the land available for vineyards and an excellent climate for

wine—why waste such an excellent comparative advantage?

Exports accounted for 53.2% of total wine sales in Australian during 2002,

compared with less than 3% in 1984 (Australian Bureau of Statistics 2005). Over 1.7

million bottles are exported abroad every day, amounting to over 471ML total exports

(Australian Bureau of Statistics 2005). As has been aforementioned in section 5.1,

exports are growing at a fantastic pace-- 26% from 2001 to 2002 (Australian Bureau of

Statistics 2005). And the value of exports in 2002 was 2.3 billion Australian dollars (.77

US Dollars to 1.00 Australian Dollar at April 2005 rates) (Australian Bureau of Statistics

2005). The UK was the major overseas destination for wine, at 216 ML in 2002 (46% of

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the total volume exported) and a value of $A902 million (39% of the total value exported). The United States held second place, at 120 ML (25% of the total) and a value

of $A741 million (32% of the total). Third place was held by New Zealand in volume

terms at 27 ML (6% of the total), but due to a higher average dollar-per-liter value of sales, Canada held third position in value terms at $A150 million (7% of the total).

One of the problems of the Australian export industry is its structure towards economies of scale. Over 815 wine producers export wine--half of all producers

(Australian Bureau of Statistics 2005). However, two companies: Southcorp and

BRL Hardy, account for half of all exports by volume, while the top 22 producers account for 91% (Australian Bureau of Statistics 2005). The remaining 793 exporters compete for 9% of the exports by volume (Australian Bureau of Statistics 2005). Clearly the wine export industry is dominated by very large corporations that can afford to produce and export moderately priced wine to the U.K., the U.S., and the rest of the world. Yet, upon perusal of John Beeston’s The Wine Regions of Australia, and other

wine guides, there are numerous small Australian wineries producing high quality estate

wine for export—albeit in small quantities and to just a few world markets (i.e. the U.K.

and the U.S.) (Beeston 1999). Small non-corporate wineries do have the necessary

structure of marketing and quality and government support to export; yet, many small

wineries choose not to do so.

5.1.5 Wine Tourism

Australia in the last ten years has developed its wine tourism industry. Tourists—

domestic and international—go from small winery to small winery, sampling wine, and

buying some to take home. The Australian government and wine industry have

125 recognized the attractiveness of Australia's wine regions as a focus of tourism (Spawton and Lockshin 2001). However, currently only about 11% of international tourists to

Australia specifically visit its wine regions (Spawton and Lockshin 2001). However wine tourism in Australia has shown strong growth in recent years, with an increase of 20% in international visitors to wineries in 1994 (Hall and Macionis 1997). And in 1998,

Australia hosted the first-ever wine tourism conference to discuss ideas, strategies, and methodologies involving wine tourism (Charters and Ali-Knight 2001). Nevertheless, the wine tourism industry in Australia, like its wine industry, is rapidly expanding; new ideas on how best to market and create a wine tourism industry are to be found in Australia.

Two industry areas that have been the focus of national and regional government attention in Australia due to their income generating capacities and economic development potential; are the wine and tourism industries (Hall and Macionis 1997). A number of organizations have been established at various levels to assist in the creation of wine tourism networks in order to promote intra and inter-organizational economic benefits. The Western Australian Wine Tourism Strategy of 2000 attempts to consolidate existing research and defines wine tourism as travel for the purpose of experiencing wineries and wine regions and their links to Australian lifestyle. Wine tourism encompasses both service provision and destination marketing (Charters and Knight

2001). Formal wine tourism organizations have been developed in three Australian states while a number of regional organizations have also been established.

In 1993, the Victorian State Government established and funded the Victorian

Wineries Tourism Council to develop and implement tourism strategies to promote

Victoria's wineries and wine regions (Hall and Macionis 1997). The state of South

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Australia also followed Victoria in its development of a State wine tourism strategy and

the formation of the South Australian Wine Tourism Council (SAWTC) in 1996,

“charged with raising the profile of, and championing wine tourism in South Australia”

(Hall and Macionis 1997). According to Hall and Macionis, the former South Australian

Premier of South Australia, Dean Brown, had this to say about wine tourism, "wine

tourism is there to be developed…is going to be a big money earner for South Australia"

(Hall and Macionis 1997). In 1997 the Federal Government's Office of National Tourism

(ONT) provided the Winemakers Federation of Australia with a grant of $70,000 under

the National Tourism Development Program to develop a national wine tourism strategy.

The objectives of this project include, “raising the awareness and understanding of

tourism in the wine industry; establishing wine tourism industry standards; increasing the

skill levels of wine tourism practitioners and employees; and fostering links between

wine, food and Australian lifestyle” (Hall and Macionis 1997).

The research activities of organizations such as Victorian wine tourism council

and the South Australian wine tourism council aim to quantify the value of wine tourism

to their respective regional wineries. These regional wine tourism councils also seek to

identify the distribution of benefits arising from wine tourism. The stated end of the

regional wine tourism associations is to change the common wine industry perception

that cooperative arrangements between the wine and tourism industries, benefit only the

tourism sector, but actually benefit the wine industry perhaps even more (Hall and

Macionis 1997).

Low cost production or unique processes can build brand equity. One of

Australia's key assets has been in managing the distribution process better than its

127 competitors (Spawton and Lockshin 2001). Individual wineries can build these brand assets by having strong distribution relationships and unique channel management methods. One with great potential for small wineries to link with tourism is a customer relationship management (CRM) system. These can be as unsophisticated as a newsletter, but with the low price of computers and software, sophisticated database systems are well within the reach of most small and medium sized wineries (Spawton and Lockshin 2001).

Wine tourism in and of itself is the most significant marketing and public relations tool any small to mid size winery can utilize. (Spawton and Lockshin, 2001).

However, just how widespread the benefits of wine tourism are in Australia has been disputed. In interviews with, and surveys of, regional wine industry associations

Macionis noted that while a number of such associations acknowledge tourism "it is not a major function", with one member of a major New South Wales wine industry association stating "yeah, we organize and conduct a number of festivals throughout the year, but we don't really have anything to do with tourism", while another from

Queensland, responded "we are wine makers, we don't have time for this" (Hall and

Macionis 1997). Wine tourism has been recognized and supported by Australian wine authorities, but its true value to the wine industry has not been truly disseminated and understood throughout the entire industry.

5.2 South Africa

The South African wine industry—particularly the Cape region--has a long noble history as old as the creation of the colony South Africa itself. Established as a victualling station by the Dutch, wine was produced to provide sustenance for the long sea-going voyages. The Dutch found the Cape offered the perfect Mediterranean climate

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for growing vines. The English upon conquering South Africa in the 18th century,

realized the full potential of South African wines. With government support and tariffs

South Africa began widely producing wine for export; good wine and cheap bulk wine.

By the early 1800’s South Africa’s wines were established enough, the famed Constantia

became the favorite drink of Napoleon and connoisseurs in Europe.

Today the South Africa wine industry is still a serious exporter of fine wines

throughout the world. More importantly to Santorini, is the fact the South African wine industry was one of the first to successfully market and develop wine tourism—especially wine tourism related to South Africa’s illustrious wine producing past. The analysis of

the South African wine industry, and its comparison with Santorini, will follow the same

model as the Australian: 1) Wine statistics and production data, 2) private organizations

3) export development, 4) wine tourism/wine trails.

5.2.1 Statistics and Production Data

Much like Australia, South Africa has exhibited sizeable increases in wine

production over the last decade. South African wine production has in fact made more

than modest annual increases since 2001. Production 2001 was 746,485 HL; in 2002 it

increased by more than 90,000 HL up to 834,156 HL; and the most recent year’s data

available, indicated production increased in 2003 over 120,000 HL to 956,015 HL

(SAWIS 2004). Similar increases are found in terms of tons of wine grapes crushed

annually: production in 2001 was 977,461 million tons; in 2002 1,079,875 tons; finally in

2003, production was 1,233,689 tons (SAWIS 2004). This growth is reflected in South

Africa’s recent ranking as the ninth largest wine producing country in the world (SAWIS

2004).

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The growth of the wine industry in terms of production is paralleled with an

increase in land area under cultivation. In 1993, just 93,000 hectares of land was under

grape cultivation (SAWIS 2004). The last official data from 2004 shows 110,200

hectares of land under vine cultivation (SAWIS 2004). Therefore in the last decade, there

was a more than 17,000 hectare increase in vineyards--an increase that is graphically

depicted in Figure 5.4 below.

Figure 5.3 South African Land Under Vine Cultivation

HECTARES AREA UNDER WINE GRAPE V INEYARDS

112 000 110 000 108 000 106 000 104 000 102 000 100 000 98 000 96 000 94 000 92 000 90 000 88 000 86 000 84 000 82 000 80 000 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

TOTAL AREA PRODUCING (4 YEARS AND OLDER)

Source: SAWIS 2004

Figure 5.4 also accurately shows the difference between mature producing vineyards, and vineyards that have been recently planted, and cannot produce. In 2003, the difference was 16,000 hectares. Such a high number of new vineyards, indicates just how much growth there has been in the wine industry over the last decade. Figure 5.5, depicts the number of hectares of new vineyards that are planted each year, and the number of older, less productive vineyards that are uprooted each year. One notices in figure 5.5 the great number of old vineyards that are being uprooted each year, especially within the last two

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to three years. This trend indicates the speed at which the South African wine industry is modernizing its wine stock, with healthier, more productive vines.

Figure 5.4 Wine Grape Vineyards Planted and Uprooted Annually, South Africa

1993-2003

WINE GRAPE V INEYARDS PLANTED AND UPROOTED HECTARES 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

PLANTED UPROOTED

Source: SAWIS 2004

Wine consumption in South Africa, is quite low and has been steadily decreasing since the fall of Apartheid; wine consumption is much lower in fact than hard liquor consumption (SAWIS 2004). Hence, the interesting wrinkle to the spike in vineyard planting and wine production comes from the fact, that domestic wine consumption has declined every year since 1997; domestic wine sales decrease 10.7% in 2003, from

388,000 HL in 2002, to 348,000 HL in 2003 (SAWIS 2004). The paradox is of course why with wine consumption decreasing would the wine industry be so rapidly

131 expanding? The answer, as will be elaborated upon in detail in section 5.10, is found in the growth of the wine export industry of South Africa.

The wine industry in South Africa is constructed on very different grounds than in many places throughout the world, especially Greece. As of 2004, there are 4,435 wine producers, but only 505 wine cellars (SAWIS 2004). A wine producer as classified by the South African Wine Industry Information and Systems, is a property that produces grapes to be sold for wine production, but does not produce wine itself; whereas the wine cellar is consider a winery that produces wine. The wine producers employ large numbers of people to harvest and maintain the grapes; over 254,000 employees work in the wine industry, exploiting the relatively low wages offered by Black South African workers

(SAWIS 2005). During Apartheid, the Black African wine workers were paid in the Dop system; paid in wine in lieu of actual monetary compensation (Platter 2000, 180). The

Dop system continued even after Apartheid (Platter 2000, 180). The racial problems of the wine industry would finally be addressed in 2002. Due to these complaints of exploitation of the largely African wine harvesters and some producers, the wine industry with significant urging by a new Black controlled government, created the Wine Industry

Ethical Trade Association (WIETA) in 2002. WIETA promotes fair trade, employment practices, and wages within the South Africa wine industry. WIETA was created in conjunction with the new South African Wine and Brandy Corporation that will be discussed in section 5.9.1. In other wine producing countries, like Australia, much of the production process is modernized with mechanized tractors etc, making the need for employees to run and harvest the vineyard, quite low. Of the 505 wineries, 99 are classified as high quality estate wineries; only 68 produce more than 10,000 tons of

132 grapes signifying the bulk of wine production. Of those 68 large-scale producers, 32 are

Co-Ops (SAWIS 2004).

Wine incomes in South Africa have also experienced a substantial increase. Wine incomes in 2001 stood at 1,595,747 billion Rand; in 2002, 2,088,484 billion Rand; most recently in 2003 incomes increased to over 2,597,442 billion Rand. Thus, the increases in income explain why so many new hectares of vines are being planted, and why so much more wine is being produced every year. Figure 5.6 below shows the increases in inputs and outputs over the last decade in the wine industry, with monetary values on the left. Inputs have increases in cost, but income has more than outpaced these increases.

Figure 5.5 South African Wine Input/Output 1993-2003

INDEX COMPARISONS (2000 = 100)

160.0 140.0 120.0 100.0 80.0 60.0 40.0 20.0 0.0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

PRODUCERS' INCOME PRODUCTION COST MANUFACTURING COST PPI

Source: SAWIS 2004

The increases and total profits for wine makers seem paltry when compared to wines estimated impact on the South African economy. It has been estimated by the

South African government, that in the wine-producing region of the Western Cape, 16.3 billion Rands are produced by the wine industry; 11.4 billion Rands remain in the Cape to

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the benefits of its residents (SAWIS 2005). Wine is therefore a serious economic engine

for South Africa.

5.2.2 Private Industry Cooperation

The South African Wine Industry exemplifies the exact opposite position of government support as the Australian Wine Industry. Instead of a multitude of government supported and created wine organizations, South Africa has a multitude of privately supported wine organizations. Organizations that range from the leading wine research organization, to the wine data and statistics organization, are collaboratively supported by a collection of private wineries. The most important associations include:

The South African Wine and Brandy Corporation, The South African Society for

Enology and Viticulture, The South African Wine Industry Trust, and a number of specialized wine variety organizations that will be discussed briefly.

The South African Wine and Brandy Corporation

In 2002 representatives of the wine producers, wine cellars, labor, and wholesale wine merchants created The South African Wine and Brandy Corporation (hereafter known as SAWBC) (SAWBC 2005). The SAWBC is a non-profit company recognized by the South African government, and is directed by a board consisting of five democratically nominated persons from each of the four aforementioned wine representatives (producers, cellars, labor, wholesale wine merchants) and an independent chairperson. Hence, all of the actors of the South African wine industry have equal power.

The SAWBC has its direct origin in the Koopertiewe Wijnbouers Vereniging

(KWV) a producer cooperative created in 1918, and given monopoly power in 1924

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(Platter 2000, 176). The KWV fixed prices, set production limits etc (Vink et al. 2004,

234). Thus, the KWV completely ran the wine industry, with no interference from

government (Vink et al. 2004, 234-235). However, due to the nature of Apartheid,

exports of South African wine were all but limited to the U.K., due to sanctions on South

African wine throughout the world. Hence, the KWV and South African wineries did not

worry too much about producing more than a few fine wines, as the domestic market for

wine drinkers was not sufficient enough to spur the development of fine estate wines

(Platter 2000, 180). This system changed with the election of Nelson Madela in 1990.

The Black controlled government demanded changes of the white controlled wine

industry. In 1996, KWV was forced to give 200 million Rands, and 220 million Rands a

year in services for the creation of the South African Wine Trust (Vink et al. 2004, 239).

After more than ten years of political fighting, in 2002, the SAWBC and its many pro-

Black strategies was finally established. The wine industry would remain privately

governed and controlled, but would offer and create a number of pro-Black wine

development and education strategies.

The SAWBC immediately went to work creating a strategic plan to guide the

South African Wine industry forward. This strategic plan has as its goals: To increase global competitiveness and profitability; To generate equitable access and participation within the wine value chain; To enable environmentally sustainable production systems; and to promote socially responsible consumption of the produce of the vine (SAWBC

2005). To successfully achieve these goals, the SAWBC created five sub-organizations each with specific responsibilities and areas of expertise. These five sub-organizations are: Social and Economic Development (SED); Human Resources Development and

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Training (HRDT); Technology Innovation and Transfer through the WINETECH network; Generic Market Development and Promotion through Wines of South Africa

(WOSA) and the SA Brandy Foundation; and Knowledge and Information Systems through SAWIS. The strategic plan and all of its components, was accepted into law in

2003 by the Minister of Agriculture and Land Affairs as the strategic framework for cooperation and action in the South African wine industry (SAWBC 2005). The

SAWBC is therefore, the guiding organization in South African wine.

The social and economic development, and human resources development training parts of the program emphasize empowering minority wine producers and workers, as well as creating linkages, joint ventures, decreasing the high capital costs for startup wineries, and assuring access to wine distribution channels (SAWBC Strategic

Plan 2003, 18). Live-able wages and benefits are the central aims of the human resources development program (SAWBC Strategic Plan 2003, 20).

WINETECH was created to oversee the research and technology component of the strategic plan. The primary interest of WINETECH is to build a strong and healthy

South African wine industry through co-operative (participative) R&D initiatives.

WINETECH provides support in wine technology and research, environmental sustainability, training, minority development, and enhancing niche South African wine varieties (WINETECH 2005). WINETECH also provides a technology transfer, sharing, and research program, any South African winery can apply for.

The marketing component of the plan is handled by the Wines of South Africa

(WOSA), which operates a expansive website, providing information on South African wine and access to all the organizations, producers, data, etc, of the South African wine

136 industry. WOSA also handles promotion and marketing for export of South African wines, as well as provide wineries with market and consumer information. Any winery can simply access the site, and download the necessary requirements and legal forms needed to successfully export wine abroad. WOSA also has created the Brand South

Africa marketing concept that promotes the quality of South African wine around the world.

The final component to the SAWBC plan is The South African Wine Information

Systems (SAWIS). This organization compiles all the data involving wine production, wine exports, wine consumption, tariffs. Hence, every winery in South Africa has the most up to date information at their fingertips.

The South African Wine Trust

The closest form of government involvement in the South African Wine industry comes in the form of the South African Wine Trust (SAWIT). SAWIT is a quasi-public private partnership mandated with the following two primary objectives: 1) the transformation and the growth of historically disadvantaged individuals within the South

African wine industry; 2) the commercial development and promotion of the South

African wine industry to ensure global competitiveness and sustainability (SAWIT 2005).

These two objectives are carried out by three sub-organizations: DEVCO (wine industry support and development), BUSCO (business support), and WEF (wine education fund).

SAWIT thus treads upon the same ground as the SAWBC, but with even more of an emphasis on minority empowerment in the wine industry.

DEVCO the wine industry support and development sub-organization enables social transformation through direct support and intervention with a strong focus on black

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economic empowerment (BEE) and wine farm community development and upliftment

(SAWIT 2005). The goal of creating new wine entrepreneurs along the chain of the wine

industry is the primary focus for DEVCO, which is in line with national government's

broad based black economic empowerment Act (SAWIT 2005). In line with these

objectives, DEVCO supports programs that include a variety of Black education and

training programs, as well as legal and health assistance.

BUSCO, or the business support organization, funds wine research and

technology sharing, as well as marketing South African wine abroad. BUSCO funds the

SAWBC created WINETECH and Wines of South Africa to the same ends. BUSCO puts great importance on marketing because, “The new age wine consumers are becoming increasingly demanding in terms of what they want and expect, less loyal to any product or product category, willing to experiment and learn across product category boundaries

– with appropriate price/quality ratios and ready accessibility becoming strong competitive factors in some markets such as the UK and the USA” (SAWIT 2005).

WEF, or wine education fund, provides human resources training and funding to the South African wine industry. WEF supports and funds minority higher education in the wine industry at University of Stellenbosch. WEF also funds a wine exchange program for oenologists and winemakers with wineries and universities in Burgundy,

California and Australia.

5.2.3 Wine Exports

Wine exports are almost essential in the South African wine industry, and have been for almost the entire history of South African wine. In the past, South Africa exported the vast majority of its wine to the U.K.; some good wine, but mostly poor

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quality bulk wine (Platter 2000, 180). In the 20th century, exports became difficult, as

most of the modern world placed trade sanctions on South African wine due to

Apartheid. We have discovered, that privately created wine bodies have made export one

of their top priorities; to this end these bodies have explored technology research and marketing to make South African wine exports more competitive. The necessity of export is understandable, as South Africa has a quite low domestic consumption rate of just

348,000 HL in 2003, 105,200 hectares of vineyards, and 900,000 HL of wine produced each year (SAWIS 2004). In 2003, South Africa ranks thirtieth in the world in wine consumption at 9.2 liters a year, and ninth in the world in wine production (SAWIS

2004). Hence, the domestic demand for wine is less than a third of wine produced every year. Therefore it makes sense that the South African wine industry would turn to exports, there is simply not enough demand in South Africa to support the wine industry.

Exports accounted for 71.15% of bottled wine sales in South Africa in 2003, but only 28.85% of bulk wine sales (SAWIS 2004). Clearly the quality wine is exported, fetching higher prices, while lower quality bulk wines are largely consumed in South

Africa. Over 239 million liters of wine was exported in 2003, an increase of 20 million

HL since 2002. The graph below in Figure 5.7 documents the rise in wine exports in millions of HL.

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Figure 5.6 South African Wine Exports in Millions of HL 1998-2003

NATURAL WINE EXPORTED 250

200

150

100

0 1998 1999 2000 2001 2002 2003 Source: SAWIS 2004

The export patterns of South Africa follow its colonial history. The UK was the

major overseas destination for the export wine, at 102 ML in 2003 (SAWIS 2004). South

Africa’s previous owner, The Netherlands, held second place in wine exports at 42

million HL (SAWIS 2004). Third place found Germany at 20 million HL (SAWIS 2004).

Hence South African exports operate in a fragile economic climate: if the economies of

Holland or the U.K. experience a recession, demand for luxury items like imported wine

will surely decrease.

5.2.4 Wine Trails

Wine tourism has flowered in South Africa through the establishment of

numerous wine trails. Almost every wine-producing region in South Africa has organized itself into its own distinct wine trail. The wine trails include regions:

Breedekloof, Constantia, Darling, Devon Valley, Helderberg, Little Karoo, Robertson,

Simonsberg, Swartland, Stellenbosch, Tulbagh, de Fransshoek, Wellington, Worcester

(Wines of South Africa 2005). The regional wine tourism agency for the area--The Cape

Town/Western Cape Tourism Agency has marketed the whole wine-producing region as

140 a relaxing tourism experience, that includes not only wine trails, but also hiking and other outdoor activities. The agency’s marketing slogan for the wine region promotes the health related image of wine, “For body and soul! Engage your senses: tantalize your taste buds, stimulate your vision, excite your hearing and awaken your sixth sense!”

(Capetown and Western Capetown Tourism Agency 2005).

Each of the wine trails exhibits a great deal of coordination and marketing between each of the wineries involved. Each wine trail offers a newsletter, promotes and supports each of the wineries award winning wines, throws a number of wine festivals, has a website, and a detailed map. Some of the wine trails market the historic nature of the wine region like Stellenbosch others market the pleasing scenery and environment like Swartland. Hence, the wine trails are cooperative wine networks that collectively market wine through tourism, history, and environment. The details of the two most famous and historic wine trails—Constantia and Stellenbosch-- are described next.

Constantia Wine Trail

The famed Constantia Vineyards have made wine tourism a dynamic and elite experience. The Constantia wine trail is made up of five historic wineries: Steenberg,

Constantia, Uilsig, Buiternverwachting, Klein Constantia, and Groot Constantia. Visitors to the five Constantia vineyards take wine tours in the historic wine cellars, eat gourmet meals in one of six restaurants housed in the Dutch colonial manor houses, and can even play golf in adjacent golf course. Banquet and conference halls are available. The

Constantia Wine Trail has thus created an inclusive upscale wine experience—definitely an attraction for any discerning wine lover, and an excellent opportunity to market high priced estate wine.

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Stellenbosch Wine Route

The Stellenbosch Wine trail established in 1971 is one of the oldest wine trails in

the world, and the oldest in South Africa. Stellenbosch is the second oldest city in South

Africa founded in a valley by Dutch settlers in 1679, and one of the most famous wine producing regions in the world. The wine trail is comprised of 300 wine producers all within the Stellenbosch wine of origin classification (Stellenbosch Wine Route 2005).

The wine trail is thus quite expansive: each winery is listed on a map, has signs directing visitors where to go. In fact, there are five separate wine trails within the greater

Stellenbosch wine route: Greater Simonsberg, Stellenbosch Berg, Heiderberg,

Stellenbosch Hills, Bottelary Hills (Stellenbosch Wine Route 2005). Each winery that is

part of one of the five wine trails is profiled by the Stellenbosh Wine Route; a wine of the

week from each winery is profiled, newsletters are printed and distributed covering all the

wine and tourism happenings, and wine festivals are held throughout the year. In short,

The Stellenbosch Wine route is a collaborative affair on the part of all wineries involved

to market wine through a touristic experience.

The wine route exploits the rich history of Stellenbosch to attract tourists. Many

of the wineries along the route have their visitor centers in the old Cape Dutch manor

houses. The wine route ties in the historic town of Stellenbosch as the central node of

each of the five wine trails. The town of Stellenbosch has preserved the Dutch colonial

(or Cape Dutch), Georgian, Victorian, and Cape Dutch Revival styles of architecture.

Restaurants, shops, hotels, and other activities in the town, make the wine trails even

more attractive to prospective tourists. The trail also ties in the historic University of

Stellenbosch--the center of wine research and higher learning within South Africa.

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The wine trails of South Africa, exemplify how wine, tourism, and history can be

marketed successfully together to create a wine network that supports, markets, and sells

wines. Such trails are especially beneficial for the smaller wineries involved, as costs of

marketing, promotion etc, to build brand loyalty are drastically lowered. As has been aforementioned in the Chapter 4 wine tourism section, tourists are more than willing to spend extra money on wine they have never heard of, or otherwise wouldn’t when they visit a winery.

The following chapter compares and contrasts the findings of these two models with the Santorini wine industry.

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Chapter 6: Wine Model Comparisons

Chapter 5 presented and described two successful wine models: Australia and

South Africa. This chapter will compare and contrast the efficacy of these two wine models to the wine industry of Santorini as delineated in Chapters 3 and 4. Australia as we have discovered, offers an excellent model of a government supported, mass quantity export driven wine industry that has been proactive in the field of wine tourism through the creation of regional agencies. South Africa on the other hand is private industry driven, also export driven, and has created a different form of wine tourism based on a rich history and wine trails. Therefore although somewhat similar both models exemplify different wine trajectories, Australia represents active government involvement and support; South Africa represents private winery cooperation and support. The following comparisons will be done for each model using the same structure as Chapter 5: 1)

Comparison of production/market etc, 2) comparison of state or private wine organizations, 3) comparison of exports, 4) comparison of wine tourism models.

6.1 Comparison of Australia to Santorini

The Australian and Santorinian—or even Greek—wine industries have quite a number of differences. The Australian wine industry is a world leader in technology and innovation, exports, and government support; the Santorinian and Greek wine industry is incredibly weak in each of these areas, as we shall see in each of the following sections.

6.1.1 Statistics and Production Data

Comparing Australian wine industry data with that of Santorini and Greece, one quickly notices the major differences. The Australian wine industry is expanding in both production and land area, whereas the Santorini and Greek wine industry is decreasing in

144 both production and land area. The Australian wine industry exports more of its wine than is domestically consumed; this is in stark contrast to the Santorini and Greek wine industry that as was noted in Chapter 4, consumes over 96% of its wine product. Total demand for Greek wine is actually slipping, due to the decreasing domestic consumption market. However, the one area that wine consumption is increasing in Greece is in the category of higher quality estate wines (Cobb 2005; Messini 1997). In Santorini, wine demand is entirely based on the success of the tourism season; even with the addition of new vineyards, Santorini is still not big enough to produce enough wine to fill the gap of its tourism customers.

Therefore, one can easily deduce that the Australian wine industry is growing as there is sufficient demand for its product, and it is more or less focused on the export wine sector: the Santorini and Greek wine industries are just the opposite. If Santorini wishes to become a player in the export wine market, it would do well to observe and imitate the Australian wine industry. Unlike Australia, Santorini due to its small size cannot mass-produce mediocre but palatable wines for export. It must improve and modernize its existing vineyards and wines, and produce only high quality wines for export.

6.1.2 Comparison of Government Organizations

Australia as we have discovered, is rife with government organizations and support in every aspect of the wine industry. Australia has some eleven major government supported wine organizations; two are major organizations (AWBC and

GWRDC) that stand at the forefront of wine development and industry support. Greece on the other hand, is reliant on only the Ministry of Rural Development and Food, and

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separate regional wine co-operatives like Santo Wines. The Greek Ministry of Rural

Development and Food, is little more than a regulatory ministry: a agency whose primary

involvement in the wine industry today, is through the enforcement of new European

Union CAP reforms that placed a moratorium on new vineyards (Ministry of Rural

Development and Food 2005). The differences are thus immense. One country supports and nurtures its wine industry, the other has resigned to a completely hands off laissez

faire approach.

The implications of having such a laissez faire approach have been, and will be in

the future, immense. The AWBC and the GWRDC sponsor and develop the latest wine

research and technology; this research and technology is disseminated and shared to even

the smallest private Australian producer. Private producers are eligible for technology grants, onsite wine technology demonstrations, new wine quality innovations etc. This commitment to technology and research and development enabled Australia in just twenty years to climb to the forefront of the wine industry; oenologists around the world, even in France, are now sent to Australia to train and learn cutting edge technologies.

Conversely, the Greek wine industry has no government organization to share wine research and technology. The best Greece can do is a small union of Oenologists.

Despite the fact Greece has been making wine for thousands of years, its vineyards and wineries remain years behind Australia. In Santorini, many of the vineyards have yet to have been modernized, and only Boutari and Santo Wines have the necessary capital and expertise to make the needed changes to produce more productive vines, and better wines (Santo Wine Cooperative 2004). With the natural low productivity of Santorini wines, any increases in technology to improve such productivity

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are solely needed. Research and development are expensive propositions that can only be

undertaken with proper motivation and support; this motivation and support is not present

in Greece, and without such support wine-growing regions like Santorini will always be behind their competitors in Australia.

The Australian government supported wine organizations also have been major

proponents of sustainable production. In Australia, sustainable production as created by

the AWBC and GWRDC, established and supports systems that save labor and minimize

inputs of water and chemicals. In Greece, the word sustainable doesn’t seem to be part of

the lexicon. Santorini is especially in need of the sustainable production practices. The

aforementioned lack of water, the high dependence on a declining labor pool, the uses of

environmentally un-friendly herbicides are all major issues that must be addressed. Yet,

without a government organization to absorb the costs of developing these sustainable

practices, it is unlikely Santorini’s wineries or vineyard owners will have the necessary

capital or economic impetus to make such sustainable changes.

Santo Wines claims it’s attempting to modernize the vineyards to make them more

labor and water efficient. The cooperative is replacing older vines with new linear

cultivated vines allowing for greater mechanization and access to the grapes, which lowers the cost of production increasing output from its current yield of between 100-500 kilos per stremma (Santo Wine Cooperative 2004). However, at present, less than half of existing vineyards have been modernized (Santo Wine Cooperative 2004). Santo Wine

has also been attempting to cut back on its use of herbicides, as herbicides harm the

already fragile water sources and bar Santorini wine from achieving organic wine status.

Organic wines fetch higher prices on the world market. Yet, all of these sustainable

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programs have been slowly implemented due to the total responsibility of the Santo Co-

operative or private wine producers in carrying them out. Hatzidakis a small craft winemaker has achieved organic certification for all of its wines; proving organic

production is possible on Santorini (Hatzidakis 2005). It may take more another twenty

years for the modernization of the vineyards to be complete, and advances in organic

winemaking in Santorini have been even slower. If Santorini does not address these issues of sustainability, the already declining vineyards may shrink even further.

Marketing and market information are also a hallmark of The Australian government supported organizations. The AWBC, GWRDC, and their respective sub

organizations have as aforementioned in Chapter 5, made marketing and market

information a chief priority. Offices have been set up throughout the world promoting

the virtues of Australian wine, and fighting for better tariffs etc. Even small wineries are

eligible for such marketing. In depth, detailed market information including production,

varietals grown, consumption patterns etc, have been collected and analyzed for each of

the previous years, and are for the use of any Australian wine producer. Having such

information on consumption patterns and preferences, and even production patterns,

allows wine makers to plan and tailor their wines to meet the market and/or production

needs.

Greece is of course, quite the opposite in information and marketing. For the

entire country of Greece, there is truly no body that markets or collects market of

production information. The Ministry of Rural Development and Food, hasn’t updated

its wine information, much less its agricultural information, since 1998. The

government’s best attempts at marketing Greek wine have resulted in little more than

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achieving a number of wine appellation of origin classifications by the EU. Greece

doesn’t have any office or agency marketing its wines abroad, an omission that most

likely explains why Greece exports so little wine. The best attempts at marketing Greek wine come in the form of websites run by Americans: allaboutgreekwines.com and greekwinemakers.com. Both offer articles, newsletters, wine history, wines, and links to some Greek winemakers. Yet, both websites are lacking in market information and in effect, nothing more than promotional websites for Greek winemakers that have nowhere else to turn. From personal experience, one could only find market and production information from French, and South African websites: Yes, the French and South

Africans have more data on Greece, than the Greeks. On Santorini, the only marketing available is through the tourist magazine Santorini Today, a website www.santorini.info.net that only lists information about two wineries, signs and

pamphlets, and cellar tours. Thus far, no government-supported organization has been

created to collectively market Santorini wines to the tourists, the Greeks, or foreign

countries for export. Clearly, from the Australian model some government organization

is necessary if Santorini or Greece wants to successfully market and understand who to

market to.

6.1.3 Comparison of Wine Exports

The Australian wine industry as we have discovered in Chapter 5, depends on

exports for 53.2% of wine sales according to the most recent data (Australian Bureau of

Statistics 2005). In 1984, exports accounted to less than 4% of total wine sales

(Australian Bureau of Statistics 2005). Exports in Australia are up 26% from 2001 to

2002; the value of exports in 2002 was 2.3 billion Australian dollars (.77 US Dollars to

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1.00 Australian Dollar at April 2005 rates) (Australian Bureau of Statistics 2005). In less than twenty years due in large part to the numerous government sponsored programs,

Australia turned its wine industry into a leader of export wine. Greece occupies the very

same spot Australia was in twenty years ago.

Greece exports just 16% of its wine, much of it low quality bulk wine to the EU.

The Greek wine industry is more or less focused on supplying the lower priced domestic

demand for wine. Exports lag because there are no substantial government organizations

to market and fight for Greek wine; nor technology and research available for no cost to

improve Greek wine comparatively on the world stage; nor viable distribution networks

for the exportation of Greek wine. Santorini is no different; Santorini wine despite being

some of the most famous and recognized in all of Greece, and possessing an appellation

of origin, is incredibly hard to find in foreign markets. For example, in Cincinnati one of the largest international grocery/wine buying stores in America, Jungle Jim’s, sells just one bottle of wine from Santorini—Assyrtiko, and only a half dozen bottles of wine from

Greece. Santorini however, still has an excellent opportunity for the exportation of its wine: the exportation of wine to the home countries of the more than 500,000 foreign tourists that visit the island each year. Of course for this to happen as we have revealed in the previous section, Santorini wine must be properly organized to gain entry into the proper distribution channels. This opportunity will now be discussed in detail in the following section.

6.1.4 Comparison of Wine Tourism

The potential of wine tourism in Australia is just beginning to be fully realized.

Australian authorities recognizing the power of a healthy wine tourism industry have

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created regional wine tourism agencies to solely support and develop wine tourism.

These regional wine tourism agencies create networks of wine producers, publish

newsletters, market and promote wineries and tourism, and hold wine festivals. Australia also held the first ever international wine tourism conference, and has sponsored a great deal of academic research on wine tourism, and developing practical wine tourism models. The importance of wine tourism to small wineries has also been acknowledged and developed. In short, Australia has a public funded and successful wine tourism industry.

Greece, although wine is the leading agricultural crop and a known tourism

product, and Tourism accounts for 15% of its GDP, has yet to develop or create any wine

tourism agencies; much less tap the potential of such a linkage (World Factbook 2005).

Merchants and wineries have discovered the power of tourism to sell wine; Greek wines are sold in an abundance of tourism related shops. Yet, the government has not realized

such a linkage and its benefits to both industries. The tourist industry on Santorini

promotes the wine of Santorini as an ancillary product to tourism; however no

organization has been set up devoted to wine tourism. No tourism based wine festivals

have been held, no international promotion of the wine tourism of Santorini has occurred,

no true linkages and networks between wineries have been created. It seems the local

government, or the prefecture of the Cyclades, could realize the potential of wine tourism, and create an agency solely devoted to wine tourism.

Tourism offers Greek wine the marketing and export capability it doesn’t have.

On Santorini, wineries are entirely dependent on tourism for the sale of their wines.

Tourists buy a bottle of Vin Santo because it is part of the tourist experience of visiting

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Santorini—it is unique to Santorini, a souvenir. As we have explained in Chapter 4, many wine tourists if they enjoy the product, they will buy more of it in their home country after their vacation is over. Yet, of course the problem is whether Santorini wine is even exported to their country. Hence, even without proper marketing and market information, the experience of the island Santorini itself is enough of a marketing coup to encourage and promote high priced wine exports.

6.2 Comparison of Santorini with South Africa

The South African, Greek, and Santorini wine industries have a great number of similarities. The South African wine industry is led by private producers without too much government involvement; produced mass quantities of low quality bulk wines just fifteen years ago; has a rich marketable history; and employs sizeable numbers of people in the winemaking process. However, unlike Santorini and Greece, the South African wine industry has turned the corner into a bright modern future. A future of private cooperation, high quality exports, and innovative wine trails. Therefore the following comparison with the South African wine industry shows how Santorini can make similar changes for a better future.

6.2.1 Comparison of Statistics and Production Data

When comparing the South African wine industry data with that of Santorini one quickly both differences and similarities. The South African wine industry like the

Australian is expanding and modernizing in both production and land area, whereas the

Santorini and Greek wine industry is decreasing in both wine production and land area.

Again like the Australian wine industry, the South African wine industry exports more of its wine than is domestically consumed.

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The similarities in production and employment are quite relevant. In South Africa

as we have discovered, there are three times as many wine producers (growers of wine

grapes) than there are wineries that produce the final product of wine. This situation is

mirrored on an even larger scale in Santorini and Greece as a whole. Just in Santorini,

over a thousand people own vineyards, with one hundred and fifty owners holding more

than 20 stremmas of vineyards (Santo Wine Cooperative 2004). These more than one

thousand small vineyard owners produce grapes that they sell to the Santo wine

cooperative; some small vineyard owners make their own home-wine (Santo Wine

Cooperative 2004). As we have discovered in Chapter 4, this trend of many small

vineyard owners on Santorini is also found throughout Greece as a whole. In fact, Greece

has the greatest number of small vineyard owners and home-wine producers than

anywhere else in the world (Messini 1997). South Africa’s new wine organization the

SAWBC, has given the wine producer equal power and support in its organization;

encouraging the modernization of its vineyards.

Greece and Santorini have left the small wine producers at the mercy of the prices

of local co-operatives and wineries; there has not been any organization or support for

these small producers to modernize. The South African wine producers also employ a

great number of native Black people who in the past were exploited for low wages.

Today, these wine employees have been organized and empowered by a number of new

wine programs. In Santorini and throughout Greece, the vast numbers of wine employees

are temporary seasonal labor hired to harvest grapes. On Santorini the situation of seasonal, and all forms of wine labor is quite serious. A decreasing number of residents are part of the harvest each year as the tourism industry; the cultural significance of the

153 harvest and the economic benefit of working on the harvest for a few days have been undermined by tourism. Perhaps if Santorini is to continue its present system of harvesting the grapes—which is most likely due to the snails pace of vineyard modernization—it should follow South Africa’s example, and grant these temporary wine employees more support and opportunities. Of course such a course of action would require the organization of Santorini’s wineries. Without some drastic measures to improve the viability of seasonal wine employment, it is likely the cultural allure of the wine harvest will continue to diminish leaving Santorini with vineyards abound with plump ripe grapes rotting on the stem.

6.2.2 Comparison of Private Wine Organizations

The South African wine industry due to its turbulent history, created, or was forced to create, a privately controlled wine industry. Although privately run, the

SAWBC and the South African Wine Trust organizations provide all the same support and duties the public organizations perform in Australia: technology support, research and development, data collection and market information, market promotion. Hence, private wine industry organizations can provide the very same comprehensive services and support as government created organizations.

What is most interesting to Greece and Santorini is how the SAWBC is democratically run. The four principle actors of the South African wine industry: producers, cellars, labor, and wholesale wine sellers, have equal share and votes in the

SAWBC. This division of power ensures that each major element of the wine industry will have input, and will not be forgotten when devising a plan for the future. Such a division is quite important in regards to the Greek wine industry as represented on the

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island of Santorini. The wine industry in Santorini is far from unified; only ten wineries

exist compared to a thousand small wine producing vineyards, the seasonal workers have

no representation at all, and the wholesale sellers are also not part of the process at all.

Today there is no organization between these actors; the needs and problems of each are not being addressed in a meaningful fashion. Therefore, the South African example should provide the Santorini wine industry with the stimulus it needs to create its own comprehensive and private organization. This organization could adequately address the many problems facing Santorini wine from its ever-dwindling number of producers, to the seasonal laborer. The organization would escape the red tape and bureaucracy that plagues Greek government, and would focus on only the needs of the wine industry as whole. With the collective power of marketing, research and development, data collection etc, Santorini wine would have a competitive advantage over other Greek wine regions, and likely could use its power and strategies to successfully market and export

Santorini wine throughout the world.

The South African Wine Trust and SAWBC, also as mentioned in Chapter 5 have quite extensive wine training, education, and economic development opportunities for

Black wine employees and vineyard owners. Scholarships for oenology and general education and partnerships with foreign universities exist; grant money is available to black vineyard owners. The very same measures could be modified and implemented in

Santorini. If Santorini created some form of private organization these similar measures would greatly enhance the viability of small vineyard owners, laborers and winemakers.

Small vineyard owners with no incentive to modernize their vineyards with available grant money would then have the necessary drive to make their vineyards more

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productive. The lack of trained winemakers and workers could be alleviated with

scholarship and training programs. On a small island with under 15,000 residents like

Santorini, such programs are not too far fetched. Scholarships for just one or two

residents to study oenology in Australia, California, or France, would provide the island

with skilled and knowledgeable experts in the latest wine trends. Training programs

conducted throughout the island need only to be attended by a few dozen wine laborers to

be effective. Moreover, due to the small size of most of the islands vineyards (most

vineyards are around 15 stremmas) it would not take large grants, or great numbers of

vineyards to make such grants effective (Santo Wine Cooperative 2004). In short, such

programs can go along way in improving and stabilizing the Santorini wine industry

6.2.3 Comparison of Wine Exports

South Africa like Australia depends on exports for the vast majority of its wine

sales; exports accounted for 71.15% of bottled wine sales in South Africa in 2003, but

only 28.85% of bulk wine sales (SAWIS 2004). Therefore South Africa exports the more

expensive bottled wines and drinks the bulk wine. The most interesting wine export statistic comes from the fact that around 90% of South African wine is exported to its former colonizers: The United Kingdom and Holland. Wine exports from South Africa while substantial, over 239 million HL of wine, are thus not diversified.

Santorini and Greek wine does relate to the South African export trends. Both

Greece and Santorini like South Africa, produces sizeable quantities of bulk wine for domestic consumption. This bulk wine is not exported, nor is it of sufficient quality to be exported. The revolution of modernization in South African wine as described in Chapter

5, has focused on producing higher quality wines that fetch higher prices for export. If

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Santorini and Greece want to make higher profits and modernize their vineyards, they must focus entirely on higher quality bottled wines that can easily be exported.

Another comparison that can be made is that of South Africa’s export reliance on its former colonial possessors. Greece is in the opposite position: it has no colonies, but it has exported millions of former citizens to other countries throughout the world.

Countries like the United States, Australia, and the United Kingdom all possess sizeable

Greek populations. Yet, wine exports to the U.S. account for just 150,000-200,000 cases a year (Budd 2004). It is well known Greek expatriates remain closely knit, tied especially to the Greek Orthodox Church and Greek food. A proper marketing campaign to promote the cultural significance and quality of Greek and Santorini wine could spur the creation of a successful wine export network.

6.2.4 Wine Trails

South Africa’s wine tourism industry has been ingeniously developed around wine trails. The wine trails as aforementioned in Chapter 5, are private networks between wineries. These wine trails utilize the history and environment of the regions they have been created in. The trails and wineries along them emphasize the old Cape-Dutch architecture and the rich history of South African wine. Ancillary activities like restaurants, golf courses, hiking trails, shops, etc. have all been developed along each wine trail. These activities have made the South African wine trails one of the most popular tourist destinations in the entire country. The wine trails have also allowed many small wineries the ability to profitably sell wine and build brand equity without a marketing campaign or a favorable rating in Wine Spectator.

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Wine trails have been successful in Greece. In Macedonia, the Naoussa wine trails offer the tourist the chance to sample both the beauty of Macedonia and its fine wines.

The trails are a bit disorganized, with nothing but signs alongside the highway to point tourists in the right direction. However, the trails show that such a tourism scheme can work in Greece. Santorini has an excellent structure already in place to facilitate the creation of a successful wine trail. All of the existing wineries in Santorini cater to tourists; with open cellars and wine tasting. Some of the wineries have preserved the old canavas, like the small winery and art gallery ArtWorks in Exogonia. The larger wineries

Santo Wines and Boutari, have new and modern wineries that combine wine tours with wine making in a architecturally interesting space. The Koutsoyiannopoulos Winery outside of Kamari, has both a functioning winery and a wine museum preserving the traditional techniques of Santorini winemaking. The wineries themselves have placed signs on the roads, advertisements in the local tourism newsletters, and some like Santo wines, have even tapped into the package tourism market. Hence, the foundation for an excellent wine trail and private wine organization already exists. If the wineries band together and create a cooperative wine trail and network, it will only benefit everyone.

The trail can be standardized by the use of maps, signs, and promotion. Marketing of the trails can be consolidated, saving each winery money and time. The network will have more leverage in the tourism industry; perhaps creating a wine trail consisting of buses that go from winery to winery. The wine trail organization could easily also create fine restaurants within the Roussos or Santo wineries. The possibilities are endless, but they require cooperation and organization of each of the ten wineries.

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Chapter 7: Findings/Wine Scenarios

Thus far we have discussed and analyzed a vast amount of information regarding

Santorini’s wine. We started with Santorini’s rich wine history; then examined

Santorini’s unique viticulture and varietals; analyzed and described its wine industry; presented two wine industry models of Australia and South Africa; and finally compared these models to Santorini. Therefore, now that we feel we properly understand the most intimate details of Santorini wine and have compared the wine industry to two relevant wine models, we have the necessary expertise to recommend directions for the Santorini wine industry. Three possible scenarios have been suggested: 1) do nothing; 2) creation of a local government supported wine agency; 3) and creation of a private wine organization. Each proposal represents an alternative future for the Santorini wine industry based on the findings of this thesis. Finally a new marketing plan rooted in the uniqueness of Santorini’s history and wine is offered. Such a marketing plan dependent on the creation of a high-end niche market for Santorini wine can be implemented by each winery without the need of either government or private industry cooperation.

Hence, this chapter offers both public and private policy suggestions, marketing plans, and a glimpse of the not to distant future if Santorini wine continues on its present course.

7.1 Do Nothing

The first proposal is to take a laissez faire approach, and simply let the Santorini

wine industry continue upon its present course. The negative consequences of such a

proposal have been discussed in detail in Chapters 2 and 4. The future of vineyards, and

hence Santorini wine, is most evident when one looks at the vineyard coverage maps

below in Figures 7.1, 7.2, and 7.3. The green areas symbolize areas under vineyard

159 cultivation. Clearly upon a quick perusal of Figures 7.1-7.3, it is obvious to the reader just how threatened the vineyards have become. Chapter 4 describes the vineyard loss in detail, but to refresh the reader, just in the last 30 years since 1970, 32% of vineyards have been lost. The figures are even more staggering when comparing the vineyard high- water mark of 1874 of an estimated 50,000 stremmas, to the 15,000 stremmas of today.

Hence in 1874 65% of Santorini’s land was covered in vineyards; today the figure represents just 19.4% of Santorini’s total land area.

Drawing upon these statistics, if in the next thirty years Santorini loses another third of its vineyards, only 10,000 stremmas of land coverage will be left.

The decline could actually be much worse than these statistics indicate. Pressing issues regarding employment, prices of grapes, cost cutting measures, and vineyard ownership could further exacerbate the vineyard contraction. The problems of employment and ownership have also been discussed in Chapters 4 and 6. In short, the old farmers of the past are slowly dying off or retiring, and the younger generation has abandoned the traditional occupation of farming for the greener pastures of tourism. Even finding enough seasonal labor to pick the grapes has become a serious problem. Instead of being part of the cultural event of the wine harvest, many of the younger residents would rather work the week in a tourist establishment or not work at all. This wine employment trend thus seems to becoming more and more of a problem every year.

Soon, there will not be enough workers to pick and tend the grapes. Solutions will be costly; either increased modernization of the vineyards, or importation of cheap labor to the island.

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Figure 7.1 Vineyard Coverage Pre-1900

Source: University of Cincinnati Sustainable Development Report 2004.

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Figure 7.2 Vineyard Coverage 1970

Source: University of Cincinnati Sustainable Development Report 2004

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Figure 7.3 Vineyard Coverage Today

Source: University of Cincinnati Sustainable Development Report 2004

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Vineyard ownership ties directly into the employment crisis. With a multitude of

small vineyard owners who sell their grapes directly to the cooperative, troubles in

finding or hiring people to tend and pick the grapes make growing grapes even costlier.

Many small vineyard owners may decide it is more economically feasible to leave their

vineyards go untended, or to transform their vineyards into tourism-related buildings or

uses. This has been the trend over the last thirty years: why wouldn’t it continue under

the current wine industry structure? The other related problem these small vineyard owners face, is a decline or a undervaluing of grape prices.

This year, the cooperative paid 0.70 euros per kilo of grapes. Although this price is much higher than the price of grapes for the rest of Greece, the cost of raising and picking grapes is significantly higher than the rest of Greece for reasons that have been previously discussed The yields on Santorini are much lower than anywhere else in

Greece, and for the matter, in the entire wine growing world. The price of Santorini land due to tourism, and the finite amount of land upon the island, is also much higher than land anywhere else in Greece and the wine-growing world. Thus growing grapes represents a significant economic substitution of land rents that are not fully recouped by the prices paid for grapes.

Talking with the existing farmers and grape growers, this writer also discovered that the prices the cooperative pays for grapes sometimes dips far below what they consider the fair market value. Since the cooperative holds a relative monopoly on grape buying, they can name their price on grapes regardless of the their true value. In fact,

The Santo Cooperative imports cheap grapes from the Peloponnese that make up most of their bulk wines, and reportedly sometimes even the fine wines are cut 40% with non-

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Santorinian grapes. Although it makes sense economically for the Santo Cooperative to

import cheaper grapes, they may be doing irreparable harm to the Santorini wine industry

for the sake of slightly higher earnings. As more and more vineyard owners decide not to grow grapes because it is not economically feasible, the allure and quality of Santorini

wines will diminish.

Now that the why of doing nothing has been discussed, the actuality of doing

nothing is even more devastating. These 15,000 remaining stremmas of vineyards

provide tourists and residents alike with a priceless natural environment. The loss of

vineyards by doing nothing will be accompanied as it has been in the last thirty years,

with an increase in buildings and shells of buildings that decrease the sightlines and

natural beauty of the environment. With a increasingly blighted environment, tourists—

the primary economic engine of the economy-- will be less likely to visit the island or tell

their friends of its stunning natural beauty. Land values and rents will correspondingly

decrease, as people wishing to build resort houses or tourist buildings on the island, will

think twice and most likely demand lower prices due to a less attractive environment. The

4,000 years of wine growing history will also be compromised. Can one imagine a

Santorini with just a handful of vineyards? This is an island that has continually relied on

wine for its existence, and poof, with thirty years of tourism, the one of a kind nature of

Santorini’s wine industry is diminished to just a few vineyards?

Hence, a healthy wine industry is both in the economic interests, and the cultural

interests of the island. Doing nothing will not only hurt Santorini wine, but the whole of

Santorini as well.

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7.2 Creation of a Local Government Wine Agency

Sections 5.1.3 through 5.1.5, and 5.1.15 as well as sections 6.1.3, 6.1.5 discuss

analyze and compare the government created wine bodies with the lack of such bodies in

Greece and Santorini. Hence, this proposal encourages the creation of a local or regional

government wine agency similar to the Australian models. Today upon Santorini, no

such government supported wine agency exists. Each vineyard owner, seasonal employee and winery is totally independent, or reliant on the Santo Cooperative. It is

believed, if greater coordination and support were present in the Santorini wine industry,

many of the current problems could be adequately addressed.

The government created wine agency will serve to improve the Santorini wine

industry by supporting modernization, research and development, and quality. The wine

agency would also advance a unified marketing strategy, and develop wine tourism. The

particulars of the agency, and how it will positively affect Santorini will now be

discussed.

One of the most pressing needs of the Santorini wine industry is modernization and greater research and development. As aforementioned in section 6.1.3, modernization and research and development in the Australian wine industry is funded by government supported wine agencies. This support has allowed Australian wine to become world renowned as the center for wine innovation and modern techniques.

Modernization, research and development, and innovation represent not only an improvement in production capacity, but in quality and thus standing against competitors on the world stage as well. Greece on the other hand has no such organization; research and modernization are the responsibilities of separate private wineries or cooperatives.

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On Santorini, this lack of support, has led to the slow modernization of the Santo

Cooperative’s vineyards, and lack of modernization of the many small and privately

owned vineyards.

Due to low yields and productivity of Santorini vineyards and decreasing manpower to tend and harvest grapes, the need for modernization and better wine growing techniques has never been greater. A government supported wine body would absorb the costs of modernization and innovation. Each winery would receive recent innovations and breakthroughs developed by the government supported wine body.

Thus, the cost of the winery for research and development and other necessary improvements would be eliminated. Quality improvements would thus be developed and funded by the agency, and dispersed to each winery. The government supported wine body would also dole out support in terms of monies for each private vineyard owner to modernize their vineyards. Such measures would enhance the quality and production capacity of the Santorini wine industry, making it more competitive on the domestic and

world market.

Marketing is another weakness of the Santorini wine industry that could be

improved upon by a government-supported body. Today marketing of Santorini wine is

in its infancy; individual wineries advertise only on the island, in various newsletters,

brochures, and signs. Marketing of Santorini wine to other areas of Greece and the world

is mostly non-existent, or vaguely tied to the marketing of Santorini itself. Hence,

exports to the rest of the world, and even to the rest of Greece, are all but non-existent.

Clearly marketing is the key to the exportation of wine, foreigners and distributors will

not buy a wine they know nothing about. This fact was realized by the Australian wine

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industry, and addressed by their government supported wine bodies. Now, the

Australians through an intensive marketing policy and offices in major wine importing countries have created a foreign demand for their product. If Santorini wishes to export

its wine, and in doing so earn higher profits, a collective marketing policy for Santorini

wine is an absolute necessity.

The government wine body would develop an extensive marketing strategy for

Santorini wine. This strategy would include all the wineries of Santorini. Perhaps

agreements could be made with the United States and Australia to market and sell

Santorini wine to the substantial Greek communities. Similar marketing could promote

reliving the beauty or history of your vacation in Santorini with a bottle of Santorini

wine. This strategy would be marketed to those countries of Europe that compose the

majority of tourists who visit Santorini each year. The very same strategy could be used

throughout Greece, as many visitors to Santorini are Greeks. Even upon the island, a

unified marketing scheme would not only save costs, but also most likely be far more

effective than the current strategies of individual wineries.

Tourism is the foundation of the current Santorini wine industry. Yet, the concept

of wine-tourism has failed to make any headway on Santorini. Wine tourism is more or

less travel for the purpose of experiencing wineries, vineyards, wine festivals, wine

shows, and wine regions and their links to the regions lifestyle (Charters and Ali-Knight

2001) Today, wine tourism on Santorini is still in a primitive individual winery based

marketing phase. Santorini wine is being promoted and branded, as coming from this

scenic tourist island; every tourist should buy a bottle of Santorini wine to take home not

only part of Santorini, but also a memory of their vacation. There are no wine tourism

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organizations or pretensions; tourism based on the natural scenery and reputation of the

island attracts wine customers—there are no wine tourists. We have discussed in previous

chapters how wine tourism increases the economic viability for every winery, big or

small. Moreover, we discussed how wine tourism has the potential to improve wine exports—an area Santorini and Greece lags far behind in. This study in section 4.9, suggested there are three wine tourism ideas: 1) Regional/government wine tourism support, 2) The establishment of wine networks or trails, 3) building of brand equity/knowledge of wine tourism. All of these ideas can be encompassed into a workable government supported wine tourism model.

In Australia, a number of regional wine tourism agencies have been set up. These agencies promote, research, and assist wineries in wine tourism. They develop marketing

strategies, throw wine festivals and tastings, organize wine trails and networks etc. They

sponsor and perform research of wine tourism and wine tourists to understand brand

equity. They are not huge bureaucratic agencies—one mentioned it was given an endowment of just 70,000 Australian dollars (Hall and Macionis 1997). And these regional wine industries are independent of the larger government wine supported bodies.

Thus, such a regional wine tourism agency is most assuredly possible for Santorini, or even the Cyclades. If the government doesn’t consider a large government supported wine agency realistic, surely a small regional wine tourism agency would be quite practical. The powerful Greek Ministry of Tourism could create such a regional wine tourism to further bolster tourism on all the wine producing Cycladic islands. In the

process of the support and creation of such a organization, the ministry would be in effect

not only improving the tourism potential for each island, but the export and earnings

169 potential of each winery, big or small. Therefore, a regional wine tourism agency is a win-win solution for everyone involved.

Creating a government agency on Santorini or in Greece to promote and support wine is a major political undertaking. It will not happen overnight, or maybe at all considering Greece’s economic and political woes. Past difficulties of Greek government organizations and their bureaucracy may also make such a proposal untenable. In the past, as we discovered in Chapter 2, it is obvious the Catholic Church provided much of the organizational capacity for wine and the vineyards. Since then, only the co-operative has stepped into such an organizational position, and its results during the last fifty years have been quite mixed. Whether a government organization can do any better is doubtful. For example, in the process of writing this modest paper, this writer experienced Greek bureaucracy in the entirety of its glorious splendor; inquiries were returned with artful bureaucratic dodges; statistics were claimed to be unattainable; those statistics that were available were old and distressingly vague and general. In short, this writer is highly suspicious as to whether a government created and run wine organization would be of any help at all. Clearly the organization would have to be exclusively confined to Santorini; if not, it is possible the organization may do more harm than good.

This writer as part of a sustainable development program in Santorini, was graciously accommodated and supported by the local Santorini government, and discovered upon research, the great inadequacies of the national and prefecture government systems.

However, this proposal lays out the reasons why a government wine agency can work, and the benefits such an undertaking would yield. If this proposal is not followed,

170 then the final alternative for improving Santorini wine must be given great consideration, as it does not require government intervention.

7.3 Creation of a Private Wine Agency

Discussion and analysis of South Africa’s privately controlled wine organizations, and the subsequent comparisons to Greece and Santorini are found in sections 5.2.2,

5.2.3, 5.2.4, and 5.2.6 as well as 6.2.3, and 6.2.5. This proposal lays the framework for a privately supported, controlled, and organized wine agency to oversee the Santorini wine industry. The private agency would unite all the actors of the Santorini wine industry, allowing it to better organize, plan for, and address the many problems facing Santorini’s wine industry. Today, no such wine organization exists on Santorini, making the myriad of troubles the industry faces, impossible to solve.

If based on the South African model, the privately created and controlled wine organization would unite and give equal power to all the vineyard owners, wineries, farmers/seasonal employees, and wine distributors. Like the previous government supported proposal this wine organization would support modernization, research and development, and quality as well as create a unified marketing strategy, and develop wine tourism through networks or wine trails. The added bonus to such an organization is of course it would avoid the red tape of bureaucracy and government, and be held directly controlled and held accountable by the wine industry itself.

Modernization and research and development would be handled in quite the same way as the previous proposal. Wine experts/oenologists working for the organization would develop and disseminate their findings to the wineries and vineyard owners.

Vineyard owners would be eligible for grants funded by the organization to modernize

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their vineyards. A similar grant based structure could be used for wineries. Wine

employees could be eligible for scholarships and wine training programs sponsored by

the organization.

Marketing would also be consolidated and promote the excellence and qualities of

Santorini wine and also each of the wineries specific wines. A proper marketing

campaign to promote the cultural significance and quality of Santorini wine could spur

the creation of a successful wine export network. With more capital and better marketing

ideas, marketing of Santorini wine could finally tap into the overseas wine market. The

costs of the marketing would be much lower and more effective than the piecemeal marketing done currently by the individual wineries.

Wine tourism doesn’t have to be run by a regional government organization, the

privately operated wine trails of South Africa prove all that is needed is cooperation and

organization—not necessarily government. If the wineries of Santorini band together and

create a cooperative wine trail and network, it will only benefit everyone. As has been

previously mentioned, the trail can be standardized by the use of maps, signs, and

promotion. Marketing of the trails can be consolidated, saving each winery money and

time. The cultural heritage and wine history of Santorini would provide the perfect marketing tool for the entire wine network. The existing Canava’s, the wine museum of

The Koutsoyiannopoulos Winery, the history of the wine itself provide all the attractiveness wine tourism needs. The network will also have much more leverage in the tourism industry than a single individual winery; perhaps creating a wine trail

consisting of buses that go from winery to winery, etc. The wine trail organization could

easily also create fine restaurants within the Roussos or Santo wineries. The beauty of

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the wine trail, is even if the private wine organization based on the South African model

doesn’t get off the ground, the wine trail could easily take off. The individual wineries,

or even a handful of the wineries could create such a wine trial, or an informal wine network. This trial or network would improve upon the current situation, and if

successful even spawn a more intensive private wine organization.

Creation of a privately controlled and operated wine body may be quicker and far

more practical than he creation of a public government supported wine body. The private

organization can start out small—as in the creation of a wine trail with just two or three

wineries. What is certain is that some organization and cooperation is needed for the

Santorini wine industry to survive. It is up to the government or winemakers of Santorini

to take action before it is too late, and the do-nothing approach becomes a certain future

reality.

7.4 A New Marketing Plan For Santorini Wine

The last two proposals tackled the transparent lack of organizational capacity of

the Santorini wine industry by suggesting the creation of two new models. Yet, the wine

industry can be drastically improved, nay even saved, without even addressing the

organizational woes of the Santorini wine industry. The solution lies in Chapters 2 and 3.

In chapters two and three we discovered Santorini’s wonderfully rich wine history and

the rareness and delicacy of her indigenous wine varieties and wine. Is it not the richness

of history and winemaking tradition that allowed the French estates of the Bordeaux to

charge obscene prices for their wine? It is this history and the rareness of Santorini wine,

that offer the Santorini wine industry all the ammunition it needs for its wines to become

prized once again throughout the world.

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Santorini’s wines were once the prized delicacies of the elite; Venetian nobles,

Russian nobles all paid high prices to obtain the sweet wine of a harsh waterless island

that otherwise would have remained uninhabited. Of course the Santorini wines of the

past had a considerable competitive advantage, in that sweet highly alcoholic wines

resisted spoilage and thus were expensive and had an eager and willing market to buy

them. Today, such a competitive advantage no longer exists; wines can be shipped

around the world, and Greek wines no longer have a mystique or reputation of quality.

However, with proper marketing that extols the virtues of Santorini’s rich history and one-of-a-kind varietals, Santorini wine can once again become an exclusive and expensive estate wine.

The French estates of Mouton, Margaux, etc, all since their very inception, have

used their history to create the aura of tradition and quality. Their marketing tool for

justify such high prices, is that have been making these quality wines for hundreds of

years. In Montepulciano--a charming hillside Tuscan town—the new wineries and

winemakers in just a decade extolled the virtues of the wine from what once were the

vineyards and wine of the popes. If the extravagant popes loved the wine—Vino Nobile

de Montepulciano--it must have been an excellent place to grow vines, why wouldn’t it

be now? Of course the marketing of Montepulciano wine fails to mention the wines and

vineyards are actually quite new.

A similar strategy is not only necessary for Santorini, but it could be a resounding

success. The French vineyards have only been producing wine for a couple of hundred

years; Santorini has been producing fine wines for 3,500 hundred years. What tradition!

What history! Every bottle of Santorini wine should have a paragraph on the rich

174 luxuriant history of Santorini wine; the special techniques for making Santorini wine; the exclusivity and rareness of the wines and varietals. It is so very interesting—much more so than the faux history and traditions of either California or Australia etc. The new marketing campaign does not have to mention the trials and tribulations of the recent past; it should reinvigorate the idea of the quality and exclusiveness of the wine; it must erase any past notions of poor quality; the marketing should focus on the present, the new quality of the wineries. Even Santorini’s mythical claim to possibly be the site of Plato’s

Atlantis could be exploited. If Assyrtiko has been growing on the island even before the eruption, it is no lie to claim one can drink the wine of the Atlanteans. I imagine such a campaign would attract substantial attention throughout the world. Recent attempts to recreate Egyptian beer or the wine consumed by Jesus and his apostles have all made international headlines.

The new marketing campaign should start with the entrance of the wine to as many prestigious wine festivals as possible. In the United States alone, Santorini and its history is relatively unknown. As a young boy I read the stories and theories of Atlantis, and always dreamed of visiting Santorini; my dreams and knowledge is not shared with the majority of the population. To most Non-Greeks, Santorini is a total unknown. I remember this summer talking to Germans, Americans, and English tourists who were totally unaware of Santorini’s glorious history. Yet, if Santorini wine and its history were to unite in one marketing campaign, it would be enough to garner the attention of many

Americans and non-Greek wine connoisseurs and amateurs. It does not take a marketing professional or academic research to come to this very pragmatic conclusion.

175

Not only is the history a important part of the marketing campaign, but the

exclusivity of Santorini’s wine and grapes offers the ability to create a niche market for

Santorini wines. Some niche market buyers are willing to spend over 85 dollars for a

small bottle of ice-wine; wine that is of such cost because of the rarity and expense of producing such wine. These niche market buyers are looking for something new and exotic; the mundane commonplace wines of California and Australia are met with ennui.

Santorini fits all the classifications to be such a niche market wine: it is expensive to produce, no other wine is quite like it, it is made from distinctive and native varietals, and it has a rich history. An example of such a niche market wine and its growth is found in the marketing of Stone Hill winery in Hermann Missouri. Stone Hill winery has successfully marketed its wine as being something unique and eccentric; bottles of Stone

Hill wines sell for well over $35 dollars. Hybrid grapes such as Vidal, Seyval and

Vignoles are used to craft a bitter wine unlike anything found anywhere else (Stone Hill

Winery 2005). Stone Hill went about creating its niche market by selling its wines to restaurants below cost, and entering the wine into major wine competitions throughout the United States. Stone Hill’s wines have won a staggering 2,700 awards since 1993, and 264 medals in 2004 alone (Stone Hill Winery 2005). This is all from a winery with just 115 acres in production. Santorini’s wines have just recently won prestigious international awards; as aforementioned many wineries have in the last decade opened new modern wineries. The taste and uniqueness of Santorini’s wines is incomparable.

Thus, why wouldn’t Santorini’s wines win awards and thus gather important and invaluable marketing momentum? Why can’t Santorini wines be introduced at fine restaurants throughout America and Europe to attract attention? The combination of

176 marketing Santorini wine to a niche high-end market, and marketing its unique history, would be unstoppable. And if a sizeable demand for expensive Santorini wine flowers once again, growing wine on Santorini will once again be a profitable undertaking— maybe even more so than tourism.

The beauty of this historical niche-based marketing is that it can be easily implemented by each individual winery without cooperation, and with minimal initiative.

Thus far, the wineries of Santorini haven’t realized the potential of marketing. Yet, everything they need is there, just waiting to be used.

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Conclusion

Santorini and its wine have formed a natural symbiosis for 2,000 years. Wine had

been the only reason for habitation on this scenic, waterless, volcanic set of islands for

centuries; it created a distinct culture, and spawned a major shipping fleet; it fashioned a

distinctive ecosystem and aesthetic that is still to this day embodied in every sip of this

great product of the environment—wine. Today, this tie, this history is in danger of being

irrevocably lost to the rapacious appetite of tourism and the even more regrettable

stagnation and lack of vision of its wine industry.

The purpose of this thesis has been twofold: First, it has been this writer’s wish to

share the knowledge and tradition of Santorini wine with the Non-Greek English

speaking world, and maybe increase the awareness of the Greek world to the wine of this

enchanting island. Second, I hope to increase the awareness of the dire position Santorini

wine is in due to tourism and the stagnation of the wine industry; and in doing so, offer

possible solutions based on real world wine models and the rare and special history of

Santorini’s viticulture and wine to forge a vibrant future. If I succeeded in either one of these goals, I consider this thesis a success and more than just an obligatory exercise in obtaining a degree. There is not much time left before future generations will lose the beauty and splendid taste of Santorini.

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Appendix: Glossary of Terms

Ampelia: the basket like pruning system employed by Santorini’s vine growers for centuries to protect the vines from the wind and sun. This system of pruning is found nowhere else but Santorini and the island of Pantellaria.

Appellation Controllee System: French wine regulations that established distinct regions for French wines still used to this day.

Appellation of Origin: An EEC labeling method that indicates quality unique to a specific geographical location. Appellation of origin wines are so granted by the EEC because the wine grown in this particular geographical ecosystem cannot be reproduced anywhere else in the world.

Bunch Rot: also known as botrytis or as “grey rot,” a fungal disease that can attack ripe or nearly ripe grapes. This form attacks damaged grapes, spreads rapidly, and significantly reduces yields and quality.

Caldera: a volcanic crater that has a diameter many times that of the vent and is formed by the central part of the volcano. Santorini is an excellent example of a caldera.

Canava: a canava is a traditional Santorini wine storage house generally below ground with a vaulted ceiling where workers would take their grapes to be trodden. Later on in the mid 19th century, the whole process of wine making would occur at the canava; wine would be stored, trodden, and finally made into barrels of wine.

Cape Dutch Architecture: unique form of Dutch inspired architecture developed in the Cape region of South Africa during the 18th and 19th centuries.

Cation Exchange Capacity (CEC): the chemical properties of the soil: acid soils have a hydrogen predominance but few nutrients; alkaline soils have a predominance of metal ions and thus high nutrients; neutral soils lie in between. Different fertilizer and cultivation methods must properly address each of these three types of chemical balances within the soil.

Cellars: The South African wine industry refers to wineries as cellars, not wineries.

Chaptalization: the process of adding sugar to the more acidic unripe grapes grown in colder climates, to make better tasting wine.

Climat: a French characteristic of wine that includes weather: as in sunlight, and rain, and to the special characteristics of each vineyard—its soil, terroir, etc

Clonal Selection: a vine that has been propagated by taking a cutting or bud from a “mother vine” in order to provide a genetically identical plant. Clones are taken from

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plants that display specific desirable characteristics, such as resistance to fungus, earlier ripening, etc., in order to bring those features into the vineyard.

Continentality: the French claim that continental climates are the best for the creation of high quality wine that encourages delicate aromas, fine fruit aromas, and the retention of natural acidity

Cru System: French system for ranking wines in five different categories according to price, quality, district, and tradition and history. The five categories are ranked from highest quality on down: first growth--or premium cru, second growth, third growth, fourth growth, and fifth growth.

Cytokinin: plant hormones in growing tips of vines.

Divolo: The second plowing of Santorini vineyards in February or March further promotes the absorption of rainwater before budding.

Dop System: Black South African wine workers were paid in wine in lieu of actual monetary compensation during Apartheid.

Evapotranspiration: the loss of water from the soil both by evaporation and by transpiration from the plants growing thereon.

Fava: A split pea native to and grown on Santorini and Crete. Fava is traditionally ground into a paste that is eaten with bread or a pita.

Grafting: to unite a different vine with the stock vine.

Genetic Modification (GM): Changing the genetic makeup of vines and varietals to build resistance to mildews, and viral diseases.

Gibberellins: plant hormones that cause the growth of the vine stem.

Hectoliter (HL): 100 liters.

Home-wine: wine privately produced within a home. A common practice for Greeks who owned vineyards.

Hybridization: the process of interbreeding or producing a new variety of plant from two different plant varieties.

Janissaries: the elite troops of the Ottoman Empire, Janissaries were largely recruited from Balkan Christian territories and trained as a elite military force answerable only to the Sultan. By the 17th century, Janissaries had assumed a great deal of power within the Ottoman Empire. Janissaries overthrew sultans, traded, and became quite rich. With the

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defeat of the Janissaries to the Greek Independence movement in 1821, the weakness of the Janissaries to methods of modern warfare became apparent. In 1826, Sultan Mahmud II and his modern European trained and equipped army, defeated the Janissaries once and for all.

Malolactic Fermenatation: the bacterial conversion of malic acid (a strong acid) into a lactic acid (a softer and weaker acid), which is accompanied by a rise in pH alongside the rise in alcohol.

Moisture Stress: There are two types of moisture stress both considered harmful to vines: drought moisture stress and excess rainfall moisture stress. Drought moisture stress occurs in hot climates where there is not enough water, and may cause leaf drop, exposing the grapes to direct sunlight. Excess rainfall moisture stress is the exact reverse, in that the vines have too much water, generally during winter rainy seasons. Excess moisture causes the grapes to be liable to bunch-rot, and bloats the grapes.

Must: Must is the thick viscous leftovers of grape skins, pulp, seeds, and juice that is the end product of sending whole grape clusters through a “crusher-destemmer” machine. It is the start of the actual wine-making process. It is the must that is placed into fermenters to begin primary fermentation.

Niato: the first plowing of Santorini vines that occurs during the month of December. This plowing wipes out the leaves on the surface, and replaces them with leaves and vine wood to fertilize and ventilate the soil. The ventilated and fertilized soil is then better prepared to absorb the valuable water from the winter rains.

Oidium: any of a genus of imperfect fungi many of which are now considered to be conidial stages of various powdery mildews that are found on grapes.

PH: pH is a measure of the degree of acidity, based on a logarithmic scale. Drinking water is considered “neutral” between acid and base, with a pH of about 7. Solutions that have less acid (more base) have pH numbers above 7; solutions that have more acid have pH numbers below 7. Grape must and wine are acidic, with pH values frequently ranging between 3 and 4. Win with lower pH if often perceived as sharp and acidic, while wines with higher pH’s are perceived as flabby or flat. PH is used as an important measure of ripeness and must composition in the cellar.

Phylloxera: a small yellow aphid about a millimeter long native to North America that feeds on the roots of the vine. Phylloxera infects the root of the vine, which swells into galls that strangle the circulation of the root causing the infected root to shrivel and die. The appearance of Phylloxera in the 19th century caused the widespread destruction of many European vines, resulting in the common practice of grafting phylloxera resistant North American wines with those of European varietals.

Pithoi: Ancient clay vessels used for storing liquid. A pithoi is a rather large and tall work of pottery fashioned by ancient peoples of the Mediterranean for storing wine.

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Peronospora: a fungus that causes downy mildew on plants. It is common in humid and moist regions.

Retsina: A traditional wine of Greece flavored and preserved with pine oil.

Saturation Deficit: the difference between actual water vapor content of a given air body and what it could contain if it were vapor-saturated at the same temperature. It is a direct indicator of the evaporative power of the air and relevant to the moisture stress in the vines.

Spectral Quality of Light: red wavelengths and normal spectral quality are recognized to cause leafy, stocky growth, vigorous branching, fruitfulness, and generous production of pigments analogous to the supply of ample cytokinins from the roots.

Stefani: also called a vine crowns, a Stefani is a round basket fashioned by pruning the vines. The middle of the crown provides a haven from the sun and wine for hanging clusters of grapes. The process of stefani is unique to only Santorini viticulture.

Stomata: vine-leaf pores.

Stremma: a stremma is 1,000 square meters, or one quarter of an acre. It is the common unit of land measurement in Greece.

Terroir: the full term, gôut de terroir, embodies the total characteristics of a vineyard location that combine to create a unique “taste of place.” The idea behind terroir is that each grape growing site has its own particular set of circumstances—elevation, aspect, topography, soil composition, wine, rail, sunlight hours, etc.—that combine to create a unique character that can be tasted in the wines grown from that spot.

Thermal Zone: when the warm nocturnal air on the middle and lower slopes of hills sitting above the inversion or fog layer, clothes the dense cold air at the valley bottom or on the flats. Thermal zones are quite stable in temperature, and thus when temperatures are less variable; the vineyard warms and consequently ripens more quickly.

VAT: Value Added Tax

Vigneron: a winegrower.

Viognier: a rare and ancient grape variety.

Vin de Qualite Produit une Region Determinee (vpqrd): EU wine labeling that essentially claims that the wine represents the specific regions ecosystem. The labeling generally reflects a higher price, higher quality wine.

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