Cava

Cava sales regain their fizz as Spanish bubbly boycott goes flat
By Victoria Burnett in Madrid

Published: Finacial Time January 3 2007 02:00

For two years the cava makers of Catalonia have been caught in the cross-fire of Spanish regional politics. Outraged by Catalonia's agitation for more autonomy, Spanish consumers have spurned the region's trademark sparkling wine, preferring to tipple French Champagne instead.

As a result cava sales dropped nearly 7 per cent in 2005, dampening spirits in Catalonia, north-eastern Spain.

But with nationalist fervour ebbing now that the region has greater powers of self-government and in José Montilla, a non-Catalan president, cava makers say the boycott has lost momentum and that the industry has regained its fizz.

"The question of the boycott is basically behind us, so things are looking up," said Josép Lluis Bonet, president of Freixenet, one of Spain's two principal cava producers. Cava, more than 90 per cent of which is made in Catalonia, is produced using the Champagne method, in which wine is fermented twice and sugar added to make it bubbly.

Sales of cava in Spain during the first nine months of 2006 rose about 6 per cent and are on track to hit 100m bottles for the year as a whole, according to Gustavo Garcia Guillamet, head of the cava regulatory council. International sales are set to be up about 4 per cent at 125m bottles, he added

While accurate figures for Christmas and New Year are not yet available, cava makers were confident that they would have returned to pre-boycott levels.

The revival comes as a truce between the industry's two bitterest rivals has removed a cloud of tension that has hung over the industry for two decades. Freixenet and Codorniu, who dominate the sector, decided last summer to drop legal claims that kept them at daggers-drawn for 20 years and work together to promote cava around the world.

"These battles are always bad. They sap a lot of energy and distract everyone," Mr Bonet told the Financial Times. "The cava industry is working to boost sales and to do that the two leaders need to get on, not fight."

The battle began in 1996 when Codorniu accused Freixenet of selling cava that had not been fermenting for the requisite nine months. Codorniu, which traces its roots back to the 16th century, views the less historic but more aggressive Freixenet, as an upstart.

A court ruled against Freixenet, which struck back, accusing its rival of using pinot noir grapes - not a traditional cava grape - to produce the drink and, later, of copying its trademark matt Carta Nevada bottle.

Both companies refusedto comment on the terms of the settlement, citing aconfidentiality agreement. A report by Efe, the Spanish news service, indicatingthat Codorniu would pay Freixenet €4m (£2.6m) in cash and give its rival 2m white-coloured bottles of cava "did not reflect the full agreement", they said.

With the boycott and the legal battle behind it, the sector has turned its full attention to expanding foreign markets and selling higher-quality cava. About a third of cava sold abroad goes to Germany but Japan and northern Europe are emerging markets.