NY Times
Label squabbles hurt Kosovo wine

June 23, 2000

ORAHOVAC, Yugoslavia (AP) -- The reds are full-bodied, the whites tart and crisp. But for Kosovo's fine wine, success or failure seems less a case of what's in the bottle than what's on it.

Although ready and eager to resume exports a year after the end of bloodshed in the province, Kosovo's wine producers say they can't -- because their main buyer insists on having Yugoslavia as the country of origin on the label.

Racke, the German importer, did not comment on the claim. Employees answering the telephone Friday said the executive dealing with the case would not be in until Monday.

Legally, the German buyer is on solid ground.

Kosovo remains part of Serbia, Yugoslavia's largest republic, even though the province is now administered by the United Nations as part of the peace agreement signed a year ago allowing NATO peacekeepers in and forcing President Slobodan Milosevic's forces out. And German wine laws require that labels state the country of origin.

But Kosovo's ethnic Albanians, whose decades of suffering under Serb domination and demands for independence culminated in the explosion of violence that led to the NATO and U.N. involvement, claim they are on higher moral ground.

"Our people don't know resolution 1244," says Ymer Kabashi, the exports manager for the Kosovo wineries, referring to the U.N. resolution that leaves Kosovo part of Yugoslavia and gives the German importers the legal basis for their claim. "They only know that thousands were killed here.

"By putting Federal Republic of Yugoslavia on our labels, we are wading in the blood of those killed by the Serbs."

The dispute caps a near decade of bad luck for Kosovo's wine industry, which handles 25,000 acres of vineyards and goes back 2,000 years to the time of Roman settlement and grape cultivation.

Nourished by hot days, cool nights and up to 300 days a year of sunshine, Kosovo's vineyards produce vintage Merlot, Cabernet Sauvignon and Pinot Noir. Its Rieslings also are competitive, priced lower than others in their class from elsewhere.

Exports worth millions of dollars annually flourished up to 1992, with 80 percent going to Germany and continuing on to the rest of the European Union.

Then came the Croatian and Bosnian wars, and with them international sanctions against Yugoslavia. Wine exports dried up, and the industry, which employs about 10,000 Kosovo residents, tried to make do with domestic sales worth a fraction of the export trade.

Even local sales suffered. Kabashi remembers the last few years before the outbreak of the first war as a "time of falling wine consumption and growing drinking of hard liquor in Yugoslavia -- a sure sign of bloodshed ahead."

The end of Kosovo's violence a year ago meant more hard times -- neglected vineyards had to be cleared of mines, sprayed, pruned, all with little money available. But it also brought hope that a free Kosovo could resume its wine trade.

The dispute has dashed those hopes. Attempts at compromise have failed, says Agim Hashimi, director of NBI Rahovec, one of Kosovo's four wine cooperatives.

Even though the European Union agreed a few months ago to labels describing the wine as a product of U.N-administered Kosovo, "our partners want 'Product of Kosovo, Federal Republic of Yugoslavia,"' says Hashimi, pouring samples in a cool and cavernous wine cellar stacked high with huge wooden casks.

Attempts to bypass the Germans have not been promising. The Bulgarians and Hungarians are interested, but want to barter -- pay fertilizers, pesticides and the like, instead of cash, says Kabashi. Samples have been sent to Swiss, Swedish and British importers, but no offers are pending. And the French and Italians, with huge domestic markets of their own, are unlikely to be interested in importing Kosovo wine, he adds.

Kabashi's eyes light up -- but only briefly -- when asked about exporting to the United States.

"It's a huge market, but tough to crack," he says. "You need a lot of money to break into it -- so we prefer the tried and true path."

But that path remains blocked, with no sign of either the Germans or the locals ready to give in.

At NBI Rahovec, Shebab Hoxha gets $91 a month for maintaining the barrels at the wine cellars. He's been paid that only three times in the year that the vineyards have renewed operations, and money is growing tighter as the dispute continues.

"But we will work for free if we have to," he declares. "We won't accept Yugoslavia on our label."

Original article