THE CONUNDRUM OF HUNGARY’S STATUS QUO OF THE WINE SECTOR EXPLAINED
Despite an ancient wine history and extensive use of expertise and knowledge from the flying winemakers after the collapse of communism, Hungary’s wine industry has somehow remained in the shadow on the international wine scene. The influx of these highly skilled international vintners, who came to Hungary to share their craft with young wineries emerging from collective agriculture, left behind a legacy of winemaking tips, viticulture guidance and modern techniques, which translated into a vast selection of new and elegant styles of wine inspired from across the globe. Hungary’s fascinating diverse wine styles is not only a legacy of these well-established foreign winemakers but also a result of the country’s multitude of distinct wine regions, varied soil types and wide variety of over 200 local and international grapes. With such a great foundation for success within the wine world, Hungarian wines are largely unknown to the international consumers.
There are reasons why Hungarian wine has not made inroads into the competitive global wine market. A once top producing country in Europe with everyone praising Hungarian whites and reds and world famous Tokaji reigning as the kings’ beverage of choice, Hungary’s wine industry experienced major setbacks by the end of the 19th century. The aggressive phylloxera epidemic that destroyed most of Hungary’s vines combined with the advent of communism crippled Hungary’s wine industry for decades. The move from modern viticulture to collective agriculture based on speed and industrial production deteriorated the quality of wine by ripping up quality grape vines and replacing them with varieties that ripen faster. Moreover, as bulk wine production requires machine harvesting, the best vines on the steepest hills in the once prized Tokaj region were uprooted leaving the land unexploited for years to come. On top of the obvious history, another reason why Hungarian wine is largely unknown to the international market is that the grape varietals have perplexing spelling and are unutterable due to the dominance of consonants over vowels in most words. This challenges many international consumers, therefore putting Hungarian wine exports at an unfair disadvantage on the foreign markets due to lack of demand. Another more recent reason relates to foreign investment which has exhibited exclusive fondness of the Tokaj region. The appeal of this area to investors has been centered around a brand that just needed resurrection, the managing investment risk being much smaller than in Hungary’s other wine growing regions. However, heavy sweet wine consumption decreased over time with a shift towards drier and brighter options, along with their export competitiveness. As such, foreign investment in the Hungarian wine industry has yet to contribute to restoring the wine reputation of Hungary on the global wine market, maybe by focusing on an aggressive international marketing campaign for dry Tokaji wine production. Moreover, improving export performance by creating a demand on the global wine market is necessary to expand Hungary’s wine industry beyond its borders. As such, a marketing campaign with focus on product quality, a strong brand image and appropriate price-value would help Hungary move from a largely domestic industry to a competitive international wine market.