‘It’s tougher than the war’
Despite jihadi incursions, multiple military occupations, and civil war, Lebanon’s resilient wine industry is facing its biggest threat yet: the economic crisis ravaging the country
Toulouse-trained wine specialist Elie Maamari was kidnapped twice during Lebanon’s civil war due to his winemaking: once by Islamist militants and again by gunmen who wanted money. During those grim years at Chateau Ksara, Lebanon’s oldest and largest winery, the labourers continued picking grapes, sometimes under gunfire.
Maamari, now Ksara’s export director, says the winery survived Israel’s 1982 invasion, which saw the Israeli armed forces take control of Lebanon’s wine country. The vineyard still made the harvest a decade later when Ksara’s buildings were occupied by the Syrian military. It survived the 2006 war between Israel and Hezbollah. And, like many of Lebanon’s wineries, it didn’t miss the vintage in 2014, when Isis militants
seized an area within the Bekaa Valley just 10 miles from Ksrara’s grapes.
But now, for the first time, the future of Ksara along with the rest of Lebanon’s celebrated wine industry is uncertain because of the economic collapse ravaging the country.
“The civil war and everything since was a promenade in comparison to what we are going through now,” Maamari explains with a slight crack in his voice.
“People can barely get milk for their children; salaries have dropped tenfold to the equivalent of just $100 a month. It is a nightmare. I don’t sleep at night from worrying.”
From the shoebox cellars of family-run wineries to the sweeping vine-clutched terraces of industry giants, Lebanese winemakers express the same fears as those of the world’s most famous producers: they could become a casualty of the economic meltdown.
The cost of staples like rice, beans and sugar has more than doubled over the last year
The stunning financial disaster enveloping Lebanon has blindsided most of the country’s nearly six million population. It has seen the Lebanese lira lose 85 per cent of its value, at one point sinking to 10,000 to the dollar on the black market, despite being officially pegged at 1500 since the 1990s.
In tandem, inflation has soared.
The cost of staples like rice, beans and sugar has more than doubled over the last year. In some instances, imported goods have gone up in price five times by The Independent’s own count.
The meltdown has dragged tens of thousands of people into abject poverty. As Michelle Bachelet, the UN High Commissioner for Human Rights, warned on Friday, the country is “fast spiralling out of control” with many already destitute and facing starvation.
Wine, a signature Lebanese industry, is in the eye of the storm.
Rooted in decades of corruption and mismanagement, Lebanon’s financial woes exploded in October sparking an uprising even before the coronavirus pandemic arrived and piled further pressure on the economy.
With a crippling shortage of foreign currency, banks slapped harsh controls on people’s accounts.
It is now near impossible to access dollars in Lebanon, which, combined with the chaotic free-fall of the Lebanese lira, makes it hard for industries that heavily rely on imports.
The problem for the wineries is that the bottles, corks, labels, aluminium capsules, oak barrels, cardboard packaging and all the equipment needed to make wine is imported from abroad. Even some saplings are brought from outside.
“It is really only the grapes that we produce locally,” explains Joanna Gerges, 30 who heads the family-run Chateau Cana.
Nestled into the vine-lined mountain village of Ras El Harf, the boutique winery produces 100,000 bottles a year.
She says 90 per cent of what they use to bottle the product is imported and so needs to be purchased with dollars, which has increased six-fold in value against the lira.
That means the cost of the raw materials alone is now 42,000 lira per bottle which is nearly $30 on the official exchange rate and more than double the price of the finished product. Her entry-level White, an unoaked fresh blend of Chardonnay and Meessassi, was until this weekend sold at 18,000 LL or $12.
“The bigger wineries have deep pockets so can sustain the losses for longer. I worry local wineries will close, “she says.
It has already started to happen to small wineries were sold off in the last few months.
“We are barely hanging on,” she says.
Lebanon is one of the oldest producers of wine in the world, with a rich 5000-year history stretching back to the Phoenicians. The Mediterranean country is blessed with an ideal climate of wet winters, and long dry summers that make it attractive for winemaking when coupled with its mosaic of different soils and altitudes from the breezy mountain slopes of Batroun to the Bekaa Valley, with its lush farmlands.
The country and its wine industry are no stranger to tragedy and ruin. Just five wineries survived the 15year civil war which ended in 1990.
Over the years the business has recovered. There are now at least 46 wineries, producing around 9 million bottles in total, small in comparison to regional competitors like Israel, which produces around 50 million bottles a year, and the 30 million produced by Turkey.
But despite the small size of production, the country has built a name for itself in the international market for its diverse range of premium wines.
In the past, the chatter about Lebanese wine abroad has been dominated by the meaty Bordeaux-style reds produced by old wineries like Chateau Ksara, which was founded in the mid 19th century and Chateau Musar, launched in 1930. Over the years, smaller niche wineries like Chateau Cana often with fresher and offbeat wines have broken through.
The industry has also been working to cultivate a culture of wine drinking in Lebanon where drinkers have long preferred the anise-flavoured spirit Arak. The Lebanese consumer on average drinks just two to three litres of wine each per year, compared to the UK’s annual consumption of around 23 litres per capita and France’s nearly 40 litres.
The potential for growth in the local and international market is huge, says Rouba Chbeir, an economic researcher for Blominvest Bank, which last year produced a report exploring the investment potential of Lebanon’s wine industry.
“Wine was among the top solid self-funded private sector productions in Lebanon,” she says.
While Chbeir is still upbeat for the investment potential in the wines the wineries themselves are wondering how long they can stay afloat.
Fearful of raising their prices, smaller wineries are operating at catastrophic losses.
“We’re just trying to keep minimal cash flow. As a winery, with what everyone is going through, we are obviously not a priority,” says Andrea Geara, 28, who like Gerges heads another family-run winery called Aurora, this time nestled in the Batroun mountains.
Like many of Lebanon’s smaller wineries, the family business was born in a shed as a hobby by her grandfather and father who both learned their love of wine in France. Seventeen years on, they export nearly a third of the 20,000 bottles they make a year and are the only producers of Cabernet Franc in the country. Their brioche-buttery oaked Chardonnay is in high demand and until the financial crash was priced at 60,000 lira or the equivalent of just under $40.
At the current exchange rate that is now just $7.5. But they can’t raise prices to reflect that.
“People have no purchasing power in Lebanon now and so you don’t want to scare them with high prices,” she explains.
“But if you disappear it’s hard to come back in. We don’t want to see everything we’ve worked for vanish.”
We don’t want to see everything we’ve worked for vanish
Some wineries are loathe to sell their wine at such pitiful prices. Many are holding onto stock until the currency stabilises, explains Etienne Debbane who in 2008 founded Ixsir winery, which produces around half a million bottles of wine a year and is a rising star in the Lebanese wine world.
While Ixsir is fine, this is not possible for the smaller wineries without storage facilities. This will become even more problematic as they approach harvest season when they won’t be able to afford the imported bottles and barrels to make the new vintage.
“The story of Lebanon’s wine industry during the war was nice, I guess: ‘We collected our grapes under the bombs’. It gives an emotional dimension to what you are doing,” he says from Ixsir’s stunning winery, located in a gorgeous 17th-century stone summer house.
“At the end of the day during that time you could still bring in your grapes, money was available to pay for everything,” he continues.
“Now I have phone calls from small wineries asking for empty bottles because they can’t afford to buy new ones from abroad.”
Wine experts in Lebanon fear the country may lose an entire vintage because of the troubles.
“We will also lose those smaller wineries,” says Amy Dunn, an international wine specialist from the UK who lives in Beirut and has been working on bringing lesser-known wineries into restaurants. “They will go bankrupt or go back into obscurity.”
She says the only way to rescue the industry would be a focus on exports but with the coronavirus pandemic closing restaurants, bars and hotels across the world, it will be a tough market to try to operate in.
Those who have spent years trying to pull Lebanon’s wines from obscurity fear the industry will bet set back decades. The biggest concern is if it disappears off the world map.
“Wine has been my life and I am concerned about the future,” says Maamari, with a sigh.
“There are so many other things to worry about, the economic situation, security. Honestly, this is the most worrying period I have ever lived in.”