Title Photo: Hétszőlő vineyards in Tokaj, Hungary. Photo courtesy of Jerzy Kociatkiewicz/Wikimedia Commons. No changes made. View the license here.
By: Ben Marshall
The Latin saying “vinum regnum, vinum rex,” or “wine of kings, king of wines,” is a phrase which is commonly attributed to the French King Louis XIV, and it is in no way a malapropism, despite its grandeur. The wine in question was the sweet, botrytized (made from overripe grapes affected by the fungus ‘Botrytis cinerea’), almost nectar-like Tokaji which came from the eastern vineyards of modern-day Hungary, near the contemporary border with Slovakia. The journey of Tokaji from its heights as the jewel in any eighteenth-century monarch’s cellar, to an afterthought in the aftermath of the First World War, to a furrowed, mass-produced product under the watching eyes of the communist regime, almost mimics the history of Hungary itself. The rejuvenation from 1990 to the present day of not only Tokaji, but the Hungarian wine industry as whole, coincides with Hungary’s accession to the European Union (EU) and the introduction of new wine laws to Hungary’s historical regions. The Protected Designation of Origin (PDO) and Protected Geographical Indication (PGI) are geographical indications established by the EU, in order to protect the names of products which originate from specific regions with certain qualities. PDOs are the more strictly adhered-to of the two designations. The revitalization has come in large part due to investment into the vineyards by foreign entities, ranging from French to Spanish and even American wine conglomerates buying up swathes of vineyards directly from what remained of the old state cooperative. Though the process of large amounts of foreign investment is not uncommon in the world of wine, it is unique in the case of post-socialist Hungary. Long serving as a symbol for national ideals, Tokaji, and wine in general, has been representative of Hungary’s political history. This paper will look at how wine was shaped by twentieth-century turmoil, and how it has been opportunely affected by rekindled interest from western Europe.
The History of Tokaji
The arrival of the twentieth century in the Hungarian-ruled territories of the Habsburg Empire carried with it the most disastrous episode in the recorded history of European wines: the phylloxera epidemic. Prior to phylloxera reaching Hungary, the wine scene in the region was at its peak, especially in terms of international renown. In 1881, a prospectus designed to catch the attention of wine buyers in the United Kingdom included several white and red wines from Hungary, describing them as “wines of the first class.” The region of Tokaj-Hegyalja was unique in the old Habsburg Empire due to its almost complete lack of serfdom. Because of Tokaj’s unique climate within Hungary, its vineyards were, and are, more susceptible to noble rot (botrytis). Tokaj experiences warm yet damp summers, and it is the high amounts of moisture prevalent in the vineyards which make the grapes more susceptible to noble rot. The complexity of the harvest in the region, therefore, meant that unskilled labour would not have sufficed for Tokaj’s famous Aszu sweet wines to be concocted. Expert labourers and vintners were needed in abundance, and thus the abolition of forced, unpaid labour in the Habsburg empire in 1848 had very little effect on Tokaj-Hegyalja’s economy, and did little to change labour relations. That particular finding is an outlier as far as pre-First World War Hungary went, as the vast majority of the economy in Hungarian lands was still very much driven by agriculture, and rural Hungary was plagued by issues both phylloxera-related and otherwise. The limited social mobility outside of Tokaj, low rates of education and rising rates of emigration made Hungary even more of an outlier among the continent’s fine wine producing areas.
Title Photo: Panorama of the Tokaj Region in 2014. Photo: Szemes Elek/Wikimedia Commons. No changes made. View the license here.
By 1900, the phylloxera epidemic had made its way from France to Hungary and ravaged the majority of its vineyards. The decade from 1875-1885 saw the worst of it, with some harvests losing over three quarters of expected yields. In these years there were signs of anti-merchant sentiment, and in particular, sentiment against those who sold wines from outside Hungary. In particular, anti-Italian views were common in Tokaj-Hegyalja due to an abundance of Italian wines being sold to Hungary, as Italy had not been as affected by phylloxera as France and Hungary had been. It is also worth noting that anti-Semitism also played a large part, as many (though not all) of the importing and exporting merchants in Tokaj were Jewish and made up much of the commercial driving force in the area as well.
Furthermore, regionalism was not uncommon in the years preceding the First World War, especially when it came to wine. The most notable example of this was in France during the Champagne Riots of 1911. When grapes were imported to Champagne from Languedoc due to phylloxera ravaging local vines, wide-spread protest, looting, and unrest erupted in the Champagne region. Nevertheless, Tokaj was still a European project, as many seasonal workers were brought in from the Slovakian- and Rusyn-speaking parts of the Hungarian crown lands, and during the First World War (albeit likely unwillingly) Russian prisoners of war were used to help with vineyard maintenance, although both of these factors were often looked down upon by the local population.
The aftermath of the First World War still showed many problems that rural Hungary faced, and the Second World War even more so, as grape cultivation, winemaking, and viticulture took a secondary role to quarry and factory work in neighbouring villages. After the communist takeover in 1949, the vineyards of Hungary, and Tokaj in particular, would truly enter a dark age.
Tokaj under communist state-ownership
Hungarian wine under the communist yoke did not actually see much change in its quality from 1948 to the period between 1967 and 1970, and some of the best vintages of Tokaji are seen as coming from the mid 1950s—a fact unfortunately often misrepresented by Western wine journalists, due to an assumption that Tokaji suffered in the immediate aftermath of the country joining the Warsaw Pact. In Tim Atkin’s “Master of Wine” dissertation, he quotes Rafael Alonso, the export director of Spanish winery Vega Sicilia, which owns the Tokaji winery Oremus. Alonso claims that the real decline began in 1970, when yields increased by “as much as ten tons per hectare” and planting density plummeted to a less labour-intensive 2,700 vines per hectare from the traditional 10,000, in order to accommodate tractors for the state-run farms. The state-owned farms were all amalgamated between 1967 and 1974 into the State Farm Wine Combine, known more commonly as the Borkombinat. The era of the Borkombinat meant that the state oversaw all aspects of grape and wine production, research in viticulture and viniculture, as well as wine commerce.The twenty-two cooperatives which existed in the aftermath of the Second World War were reduced to six by 1974, and the quality of Aszu wines began to dwindle in an undoubtedly deliberate manner. Istvan Szepsy, the former technical director of the Borkombinat in the town of Mad, confirmed that the state ordered him to focus on and promote quantity over quality. Another winemaker also asserted that the priority mission was to supply the Russian market, more commonly known as the ‘easy market.’ Within the span of twenty years, vineyard acreage had been decimated, and viticulture had become solely mechanized. Winemaking and oenology that had survived for centuries in Hungary, and Tokaj in particular, suffered a near complete reset of everything that it symbolized.
It is here that the crux of this paper begins, as in 1989 and 1990 when the communist regime in Hungary collapsed, the wine industry was thrust into the palms of the neo-liberal West. The ensuing foreign investment that came from France, Spain, the United Kingdom, and the United States among others, revitalised Hungary’s stagnant viticulture and re-implemented quality assurances in Hungary’s regions. However, the sudden influx of capital also served as a warning for how foreign investment can negatively impact small, locally owned artisanal wineries in Hungary’s talismanic region.
Hungarian wine in the capitalist market
Before approaching Tokaj’s resurgence, it is important to view how regions in the rest of Hungary have coped under the new EU laws, and how the near complete lack of foreign investment outside of Tokaj has impacted the way in which viticulture and winemaking are practiced. Areas such as Villany and Matra, for example, underwent a total crisis in the aftermath of the Second World War due to population exchanges, collectivization, and cooperation that were mandatory in the Council for Mutual Economic Assistance (COMECON). Villany, near the town of Pecs in the southern Transdanubia, suffered greatly again in the immediate aftermath of the communist era, with the near immediate bankruptcy of the state-owned vineyard cooperative which resulted in tens of thousands of people becoming unemployed.Another region, Matra, also suffered during the same period from being “left behind.” Situated in the Eger region, about halfway between Budapest to the west and Tokaj-Hegjalya to the east, Matra’s imports during the era of the state-owned cooperative were entirely focused on markets in the Eeastern Bloc. The total stagnation and lack of prestige compared to Tokaj, and even to Villany, are challenges which Matra has struggled with much more since the 1990 re-opening. Issues with adapting to the free-market economy, along with the consumer perception of Matra wine as still being the inexpensive, watered-down product that it was during the 1970s and 1980s, have also been critical in hampering the region’s growth.
Today, both Matra and Villany are part of the geographic designation of origin system which has been implemented in Hungary via the country’s entrance into the European Union. Both regions qualify as PDOs, with Matra having a separate PGI associated with it, Felso-Magyarorszag. The latter is part of an all-encompassing PGI which covers not only Matra, but its neighbouring regions of Bukk, Eger, and Tokaj. PGI laws allow more flexibility for winemakers, with much more lenient rules for viniculture.
Despite the quality assurances and regional stability that the EU has brought to the lesser-known Hungarian regions, there has also been a detrimental side to the accession as well. An example of this in Matra would be the result of the “grubbing-up” scheme funded by the EU, which was responsible for vast amounts of uprooting and replanting of vines throughout. ‘Grubbing’ in viticulture is the process of removing vines if yields becoming too low or if a vineyard has been too afflicted by pests, which has the effect of changing the varieties in a vineyard. Unfortunately, in regions such as Matra which have not seen much investment—either domestic or foreign—the scheme, along with low farm gate prices (the price of a product at its original farm), and decrepit vines with too-low yields have had a negative impact on micro-vineyards. Micro-vineyards in Hungary are between 0.3 and 0.6 hectares, and unfortunately their minute size struggles to provide a steady source of income in the new market conditions. These problems persist widely in Matra, and within the Eger region as a whole.
On the other hand, entry into the EU has allowed for other regions to showcase their qualities thanks to such benefits as quality assurances. The most notable example of this for Hungary is the introduction of the Act of Wine (AOC), which came into effect on May 1st, 2004. Sharing no relation to France’s AOC (Appellation d’origine contrôlée), the Hungarian AOC is simply meant to protect the regions and styles which Hungarian authorities see fit to promote and regulate. The number of AOCs in Hungary has increased since joining the EU, and among them are Tokaji, Egri Bikavér, Debrői Hárslevelű, Villányi, and Izsáki. Entry into the EU, and the gradual recovery from the “grubbing-up” of vines has also helped with exporting Hungarian wines as well, although the first two decades of the post-socialist market were not monetarily promising. Indeed, from 2000-2005, Hungarian wine exports within Europe either decreased significantly, or stagnated, as per Table 1.
Table 1 (Above). Source: Sidlovits, D & Kator, Z Influence of the EU accession on the Hungarian Wine Industry, 2007, pg. 11.
The export numbers from 2019 are markedly higher for the likes of Slovakia, Germany, the Czech Republic, Lithuania, and the United Kingdom, despite dropping numbers in other member states.
Table 2 (Above). Source: Hegyközségek Nemzeti Tanácsa
Table 2 Legend:
|Rendeltetesi orszag||Country of Destination|
|Egyesült Királyság||United Kingdom|
The EU has inevitably been involved with labelling laws and related issues, especially since the vineyards from Tokaj-Hegyalja are uniquely extended across the border into Slovakia. In 2012, Hungary went to the EU Court of Justice over Slovakian wineries’ usage of ‘Tokaj’ on their own labels. Despite there being an agreement between the two countries in 2004—when both states entered the EU—which allowed Slovakian vintners to use Tokajský on their labels, issues over regional differences still remained. The Court of Justice ended up ruling against Hungary’s request to disallow Slovakia’s registration of the ‘Tokaj Wine Region’ as part of its own list of PDO appellations. The EU deemed that the alleged Slovakian discretion did not “constitute an actionable measure,” thus allowing Slovakian wineries to continue using Tokaj on their labels. Hungary was however given the benefit of the doubt upon its immediate entry into the EU, when it (technically along with Slovakia) was given exclusive naming rights to the word ‘Tokaj/Tokay.’ Therefore, Alsatian vintners, who had for decades referred to Pinot Gris as Tokay d’Alsace, were forced to revert to the wine’s former name upon EU Court of Justice review.
Ultimately, despite the gradual rise in importance of its secondary regions, Tokaj-Hegyalja, and the famous Tokaji Aszu which its wineries produce, remains categorically the jewel of Hungary’s wine industry. The modern-day importance of Tokaj, from the perspective of consumers outside of Hungary, comes from the region’s most notable wineries: Oremus, Royal Tokaji, Disznoko, Chateau Pajos, and Hetszolo, all of which happen to be owned by foreign investors. That is not to say that there is little left for Hungarian capital and Hungarian business interests since the jump start into western capitalism and neo-liberal ideals. In fact, foreign-owned vineyards make up less than 10% of all area under vine in Tokaj-Hegyalja today. A notable aspect of Tokaj-Hegyalja which is often pushed under the rug is the fact that there is still a state-owned cooperative, although since 1990 the focus on quality over quantity has been more in request. Formerly operating under the name ‘Tokaj Kereskedohaz,’ and now named ‘Grand Tokaj,’ the cooperative accounts for nearly 40% of the region’s total wine production, yet it is not a brand which takes precedence over the foreign owned brands within the region, from a consumer perspective. Large cooperatives such as Grand Tokaj rarely aim for producing and releasing the highest quality which regions have to offer, although Grand Tokaj still owns a number of first growth vineyards (sites which produce the best fruit with the lowest yields and are best suited climactically to be affected by Botrytis/Noble Rot) such as the Szarvas. In South Africa, the Koöperatieve Wijnbouwers Vereniging shares the same role as Grand Tokaj. Like in Hungary, South African wines became available to international markets in the early 1990s after the abolition of apartheid, yet despite both nations having a lengthy history of winemaking, there are practically no issues with South African wineries today which involve the best vineyards and plots being owned, and occasionally managed on site by foreign nationals.
Sources of investment
The main actors of foreign investment in Hungary, namely Oremus, Royal Tokaji, etc., are not all owned by the same entity. The first foreign entry onto the soils of Tokaj came from a conglomerate headed by English writer Hugh Johnson, Danish wine consultant Pieter Vinding-Diers, and English banker Lord Jacob Rothschild, who founded the Royal Tokaji company in 1990. Located in Mad, the estate owns a number of first growth vineyards, including Szt Tamas, Nyulaszo, Mezes Maly, and Betsek. French investors followed shortly afterwards throughout the 1990s, with insurance company AXA Millesimes purchasing land to start the winery Disznoko. The Cooperative Agricole La Noëlle Ancenis (CANA) company (also French) then started Derszela, and Jean-Louis Laborde (owner of a number of châteaux in Bordeaux) started up Chateau Pajos. French company Grand Millesimes then bought vineyards in order to start up their own winery, Hetszolo. American investment began in the early 2000s, most notably with businessman Anthony Hwang purchasing vineyards for his project Kiralyudvar.
Title Photo: Map of Wine regions of Hungary. Tokaj-Hegyalja wine region highlighted. Approximate areas. Courtesy of : CsTom/Wikimedia Commons. No changes were made. View the license here.
One of the most notable examples of foreign investment into the reinvigorated landscape of Tokaj is Oremus, an estate located in the town of Tolcsva and owned in its entirety by the Spanish winery Vega Sicilia. This is unique in Tokaj, as it is the only foreign-owned estate in the area which is owned in full solely by one other winery, and not a conglomerate, insurance company, or third-party business interest. Named after the rarely used local varietal of Oremus, the estate owns around eighty hectares of some of the best vineyards near Tolcsva and Sátoraljaújhely. Oremus has eleven vineyards to its name, including the famous Oremus vineyard itself in Sátoraljaújhely. Despite having a 100% ownership stake in the estate, the Spanish winery based out of the Ribera del Duero region never used any Spaniards to manage the estate in Tolcsva. Since Oremus’ inception in 1993, that job has gone strictly to Hungarians. The first manager was Andras Bacso, who helped handle the privatization of Oremus and various other wineries, on behalf of the Hungarian state, before ultimately joining Oremus in a management role. Bacso recently retired, and another Hungarian, Robert Kindl, succeeded him as general manager of Oremus in January 2021. There is very little evidence of any local animosity towards Oremus, or any of the other foreign-owned estates coming from Hungarian media outlets that would suggest that these estates are causing the region any harm.
In a 1993 article, wine journalist Jeremy Lee Williams described the three issues which were presented as hinderances to the revitalization of Tokaj:
- The settling of the question of ownership
- A switch to more modern techniques of winemaking
- The generation of a clearly defined marketing strategy
In reviewing what has been accomplished from Williams’ article to the present day, one could easily argue that the first, second and third points have been dealt with to a large degree. Despite the obvious successes of Tokaj since the end of the communist era, it is also unfair to place all the success squarely in the hands of foreign investment and innovation. Non-Hungarian head winemakers in Tokaj are few and far between, and many of the most talented were simply stunted by the Borkombinat, rather than taught anew by the arrival of western capital. Tibor Kovacs, the former general manager of the estate Tokaj Hetszolo, exclaimed in an interview with Tim Atkin MW that plenty of research stations in the region, such as varietal cloning, existed and were vitally important to the area prior to the Second World War, but were shut down by the Borkombinat during the 1970s. Winemakers such as Kovacs and Andras Bacso were extremely underutilised and often had their talents neglected by the state-owned Borkombinat. Without their expertise, the rejuvenation process of Tokaji would have undoubtedly made any foreign venture much riskier, far more expensive, and even more time consuming than it ended up being.
If there is any negative which can be drawn from the influx of foreign money into Tokaj, it is the idea that the opportunity is being given to the investors of “privatizing national heritage.” EU regulations play a role in this, as many winemakers of smaller producers in Tokaj attribute the changes in the way Aszu wines are made to the influence of the French on PDO and PGI laws, due to their status as “established global wine experts.” One winemaker in the area described the changed Aszu production techniques thus: “The French modified the Hungarian law for wine in 1994…Hungarians typed it but [the French] thought it out.”
Wine as a Cultural Symbol
The history of Tokaj, from its glorification in the eighteenth century by Francis Rakoczi, the leader of a Hungarian national uprising and great patron of Tokaji, to the end of the Second World War when its Aszu wines were named alongside the likes of Sauternes in Bordeaux and Klein Constantia in the Western Cape, to the suppressed period under the state-owned cooperative, is emblematic of Hungary’s place in history. It is history, or historical context which has always been at the forefront of the national image of Hungary and Hungarians, and what better symbol to use than Tokaji as an image for the Hungarian landscape and cultural heritage?
Title Photo: Tokaji Wine. Photo courtesy of m-louis/Flickr. No changes made. View the license here.
Around thirty-five kilometres southwest of the Tokaj-Hegyalja hills lies the unassuming village of Muhi, on the river Sajo. In Muhi, there are no vineyards, nor is there any other major industry. What makes Muhi important, however, is its historical significance, as nearby a monument is erected, far from the only one in Hungary, commemorating the disastrous defeat suffered by King Bela IV at the hands of Batu Khan and his invincible Mongol army in 1241. The date of this disastrous result would have only been within a few decades of Tokaj-Hegyalja first having vineyards being planted on its hillsides. The memorial at Muhi may not be the most glamourous of Hungarian monuments, and its proximity to what is now Hungary’s most cherished spot of land hardly increases its significance, despite the near-apocalyptic state that Hungary found itself in, in the aftermath of the battle. It has been highly speculated among historians that Batu Khan himself used Mount Tokaj, the highest point in the area, as the site for a Tengrism ceremony prior to the battle, giving even more historical significance to the region. The questions surrounding the lack of spectacle at Muhi, despite its close proximity to a fairly busy tourist hotspot in Tokaj, therefore present themselves. It is impossible to look at Tokaj-Hegyalja as a whole and not see the abundance of commercial success that the region has experienced since 1990, and the impact of foreign ownership and investment would not only be egregious to ignore, but to see it as unwelcomed would also be unfair. The pride that Hungarians take in their historical traditions of winemaking has always been evident, even in the dark ages of the Borkombinat, although the industry still faces definitive challenges in the early 2020s. Climate change and consumer attitudes towards dry, non-Aszu wines (both white and red) are still key factors with which the Hungarian wine industry has struggled, and unfortunately will likely continue to struggle with. Modernization efforts are continuously underway, thanks in large part to EU funds, although the smaller producers are still largely underrepresented as a whole. The problem facing Tokaj, and much of the wine industry in Hungary today, is that while its present and future should not be fossilised in any way, the rapid introduction of private capital in the early 1990s has left an extensive gap between the haves and have-nots. As there is such a looming presence of estates founded and owned by foreign entities, those that are locally owned have been squeezed out of any path to consumer relevancy or profit, since land in Tokaj had a monetary value placed on it in 1990.
Ultimately, from 1990 to 1994, Tokaji—and Hungarian wine as a whole—survived more catastrophes outside of their control than most historically great wine regions would be able to recover from in decades, much less in four years. Despite the misgivings of the state-owned cooperative Borkombinat, the controversial grubbing-up system brought in by European legislation, and the almost complete lack of prestigious estates owned by Hungarians, Tokaj is seen by many in the West as a success story coming out of the communist doldrums, and thankfully as one that is being revitalized, rather than invented. The idea of invention and re-invention is, however, an idea brought about by investment from Western Europe and beyond. It has unfairly painted Hungarian winemakers, especially of Tokaji Aszu, as having been saved by swathes of capital brought in from foreign investors, despite clear evidence that many winemakers still held excellent knowledge of Aszu production even during the years of the Borkombinat. Tokaji indeed has once again cemented its status as one of the world’s great wines, and the funding and regulations brought about by the EU have certainly allowed for greater growth than the industry would have experienced if the EU was not involved. The “grubbing-up” scheme hinders short-term growth, unquestionably, yet it is hard to argue that the quality of vines and wines coming out of such vineyards in the years to come won’t be prosperous. The factor of the foreign-owned estates in Tokaj is perhaps the most difficult subject to tackle in the present, and more-so in the future. While the investment managed to successfully check every issue presented by Jeremy Lee Williams in his 1993 article, the fact remains that many Hungarian growers and producers suffered as a result, despite Hungary itself basking in the success that its own winemakers helped to bring about, albeit with funds directly coming from western Europe with little regard for the country’s wine hinterlands.
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