Luis Cerdeira, winemaker at Portuguese wine producer Soalheiro, looks out next door at the vines of Spanish producer Vega Sicilia and shrugs. Soalheiro has been producing Alvarinho (Albariño in Spanish) wines for more than 40 years, but Cerdeira remains unconcerned by the new influx of investors in the Alvarinho heartlands straddling the Portuguese-Spanish border, either side of the river Minho.
"Our neighbours are not our competition. In the US, for example, our competition is the distribution of other white wines like Sauvignon Blanc, Chenin, or Riesling," Cerdeira says. "The big producers who have come here are creating further value, it's a positive trend of premiumization."
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Soalheiro is located in the sub-region of Monção and Melgaço, which is home to about 75 percent of Alvarinho plantings of the Vinho Verde region. Competition here has risen following recent winery acquisitions by the big Douro producers including Symington Family Estates, the Fladgate Partnership and Falua.
On the other side of the river Minho in Spain, Vega Sicilia, Familia Torres, CVNE, Matarromera, Sherpa Capital, owner of producer Terra Cellars, and Hijos J Rivera, owner of giant beer brand Estrella Galicia, have acquired seven Galician wineries over the past 18 months. (See investment timeline below.)
"The arrival of big wine players in Rías Baixas, which essentially has to do with climate change, has had positive implications on the Spanish side of the border. Property values have increased and Alvarinho grape prices per kilo have risen. They've created more value and internationalized the wines produced in the Rías Baixas. I believe the same will happen in Monção and Melgaço first, and then all over the Vinho Verde region," says the renowned Portuguese winemaker and Alvarinho expert, Anselmo Mendes.
In May this year, Mendes secured a joint venture to produce Alvarinho with the Douro giant, Symington Family Estates which in December 2022, acquired Casa de Rodas, a historic 27.5-hectare estate. The joint venture includes Mendes' Contacto wine.
The development of wines styles on either side of the Minho shows how a surge of interest and greater competition for producers has led to greater experimentation with producers seeking more precision in winemaking and using a variety of production and ageing methods.
Mendes says Monção and Melgaço and the neighbouring Rías Baixas sub-region, Condado de Tea, share the same microclimate, allowing producers to make more complex and deeper wines with more body, when compared to more acidic and fruitier Albariño wines made in Rías Baixas areas closer to the Atlantic Sea. Unlike inland producers, Rías Baixas producers closer to the coast are known to use malolactic fermentation in production to tame acidity levels, although recent warmer vintages have prompted some producers to reduce or end the practice.
Cheaper young Vinho Verde wines, (other than those of Monção and Melgaço Alvarinho,) have tended to be light, and spritzy, but in recent years, many have become more balanced and concentrated with less residual sugar.
Greater competition
Indeed, recent wine price increases, triggered by grape prices and greater production costs, for Rías Baixas Albariño have had an impact on exports this year, with some buyers looking across the river Minho to Portugal for lower priced alternatives.
"The average price of the grapes in Rías Baixas is double of that of neighbouring Monção and Melgaço in Portugal and quadruple of that elsewhere Vinho Verde." Anselmo Mendes, points out. Soalheiro says that its decision to increase average prices by 10 percent this year and in 2022 has increased value of sales.
The Rías Baixas wine board did not comment on export data for this year, but said it was content with the rise in the price of Albariño wines. Rías Baixas wine exports to the US increased by 13.5 percent to $19 million in 2022, whilst Vino Verde exports rose to $18.6 million. The US is the biggest export market for both regions.
This harvest, historic yields of 44.3 million kilos of grapes in the Rías Baixas has, for now, tamed any further grape price hikes, which in recent years had doubled in some cases, and it may too have an impact of wine prices. Despite outbreaks of mildew, Galicia produced 75.4 million kilos of grapes this year, with yields up 7 percent – 5 million kilos of grapes – on 2022 figures, the Galicia regional government said on October 5.
Impact of investments: Scramble for Galician grapes and land
The big players who have bought wineries and vineyards in Galicia, which is home to minifundio or small holdings, typically rely on growers to ensure grape supplies meet production demand.
Vega Sicilia is building a new winery in Crecente, in the Condado de Tea sub-region of the Rías Baixas. It's said to have bought 30 hectares of vineyards as part of a €20 million investment ($21M), however, the producer is understood to have encountered difficulties in acquiring further land.
Vega Sicilia wants to buy a total of 55 to 60 hectares to produce 300,000 bottles of Rías Baixas white wine. It told Spanish newspaper Cinco Dias in February 2022, that vineyard prices had reached €200,000 ($211,151) per hectare becoming the most expensive in Spain.
Producer Familia Torres, which acquired Bodegas Valdamor – its second Rías Baixas winery last July – works with 95 growers for its supply of Albariño grapes, which the company says costs €2.5 to €3 per kilo plus VAT in 2023. Prices which are a far cry from many Spanish wine regions, some of which have recorded grapes prices of under €0.50 per kilo. Last year saw some growers charging €3.50 per kilo of Albariño grapes. Familia Torres said it was looking acquire more vineyards.
However, soaring grape demand and vineyard acquisitions from big players has led to the problematic expansion of Rías Baixas in the northern Galician sub-region of Ribeira do Ulla which over the past 23 years has grown from 43ha to 293ha up to 2022. In September, residents in the Valley of Ulla launched protests and a rural manifesto against the spread of a monoculture of vineyards, which they say has led to the destruction of forestry, the felling of trees, and the reduction of farmland for traditional crops and the intensive spraying of fungicides on vines to combat mildew.
Several producers from the better-known Val do Salnés sub-region of Rías Baixas, closer to the Atlantic coast, have planted further north to ensure supply of grapes. Meanwhile, Galicia's regional government, the Xunta, has initiated a plan to recover viticulture in historic growing areas, with growers teaming up in some areas to buy or use land to restart production in abandoned parcels of vines.
Ribeiro revival
Faced with greater competition, increased grape prices and demand, cooperative Viña Costeira the biggest producer in Ribeiro, one of Spain's oldest appellations, is quadrupling its vineyard area.
Andrés Rodriguez, CEO of Viña Costeira, says the company typically produces 2.6 million litres of wine from 3.5 million kilos of grapes – 15 percent of which are sourced from its own vineyards. However, it now plans to increase this percentage share beyond 50 percent with the planting of about 100 hectares of vines. This year, its planting 40 hectares partly in areas of higher altitude in the mountains which surround the appellation.
This year, yields in Ribeiro, the second largest Galician appellation, increased by 12 percent on 2022, to 11.49 million kilos.
Ribeiro is home to the biggest plantings of Treixadura, a grape variety which provides a competitive alternative to the better known Albariño, and Godello wines of Valdeorras. Despite lower acidity levels compared to its rivals, Treixadura is known to produce elegant wines, with weighty texture and depth and notes of citrus, apricot, plum and quince. Rodriguez points out that grape prices have grown from about €1.2 to €2 per kilo over the past four or five years, but that these prices are lower than in the Rías Baixas. He says the potential alcohol levels have been maintained below 13 percent, with most wines 12 or 12.5 percent, in line with consumer demands.
As part of a modernisation plan, the Ribeiro appellation's wine board is now considering moves this autumn to change production rules, which could allow producers to make rosé wines.
Could the new wave investment spark the start of the end of the ancient minifundio vineyard small holdings of Galicia and Vinho Verde?
"We are starting to build almost a new Ribeiro," says Rodriguez. He reckons that about half of the ancient minifundio vineyards and walled terraces, which account for 800 hectares of Ribeiro's 1300 hectares, will disappear over the next few years and be transformed to bigger vineyard areas.
"It's a two-way street, we want to preserve the best minifundio sites, but transform many of them. We by no means want to end the minifundio system in Ribeiro, but this does mean creating bigger vineyard areas. We're not talking about vast ones. We're talking about the creation of two hectare sites. The average minifundio vineyards are on average 6000m in size and these areas are divided into 11 or 10 small parcels, which just isn't economically viable," Rodriquez says.
If many growers in Galicia have started to move away from the Pergola form of vine conduction, many minifundio vineyards, which are valued as cultural heritage, and which play a key role in providing quality production in Galicia, are owned by elderly growers, who have abandoned vineyards.
But back at Soalheiro, across the other side of the river Minho in Portugal, Luis Cedreira says grapes supplied from 180 minifundio growers provides Soalheiro with a key advantage compared with his new rivals in Monção and Melgaço, which own bigger vineyards areas. Soalheiro owns around 14 hectares which are organically farmed, but it wants to maintain this strategy, rather than buy big amounts of land.
"Our Growers Club organisation helps growers grow. We don't have the problem of rural desertification of viticulture or the problems elsewhere of bringing in grape pickers." he says.
"Our big advantage compared to the big players who own bigger sized vineyards is that we have a rich diversity of small parcels. Global warming is leading to production inconsistency, where vineyards have become massified." says Cerdeira, stressing that the diverse nature of minifundio parcels in terms of orientation, clones, and vine conduction systems, rather than homogeneous big areas of vineyards, provides production consistency. "Imagine, if you have a 20-hectare site that one year does not produce much. That's a problem. But with the minifundio parcels, if you have one area that does not produce much one harvest, other parcels will."
Small green holdings of quilt-like pastures, shows how small vineyard parcels are comically, but beautifully orientated in different directions. They contain old bush vines which are more resilient to climate change, Cerdeira says.
"Please don't ask me about the clones we have in these parcels, as they contain a mixture of clones. And don't ask about the orientation of vines; some face north, some face south, and please don't ask me about the conduction system of vines, there are several types. It's all a mix!"
Investment timeline
Galicia, Spain
September 2023: Matarromera inaugurates revamped Casar de Vide winery in Ribeiro.
March 2023: Producer CVNE (Compañía Vinícola del Norte de España), announces second Galician winery purchase with purchase of Bodegas La Val en Salvaterra do Miño in Rías Baixas.
February 2023: Hijos J Rivera, owner of beer brand Estrella Galicia and a winery in Ribeira Sacra. announces €3 million injection of funds into Grandes Pagos de Galicia, (which has three wineries in the appellations of Ribeiro, Rías Baixas and Monterrei). It acquired the company early that month.
February 2023: Sherpa Capital, owner of producer Terra Cellars, announces acquisition of Crego e Monaguillo winery in Monterrei.
November 2022: Matarromera buys Bodega Viña Caeira.
July 2022: Familia Torres announces second Rías Baixas winery acquisition with purchase of Bodegas Valdamor in Meaño. Wine production: Pazo das Bruxas: 40.000 9L cases, Blanco Granito: 400 9L cases
April 2022: Matarromera buys Bodega San Clodio in Ribeiro.
February 2022: Vega Sicilia announces €20 ($21M) million investment in new winery and vineyards in Crecente, Rías Baixas.
Vinho Verde, Portugal
August 2023: Fladgate Partnership announces first Vinho Verde acquisition of the 53ha Quinta da Pedra, located in the heart of the Monção and Melgaço sub-region of the Vinho Verde together with the 24ha Paço de Palmeira, famed for producing high-quality Loureiro in the Minho sub-region.
February 2023: Falua, owned by the Roullier Group announces expansion of Alvarinho planting to 20ha having acquired Monção and Melgaço Quinta do Hospital estate in 2017.
December 2022: Symington Family Estates announces first Vinho Verde acquisition with purchase of Casa de Rodes, in Monção and Melgaço with Anselmo Mendes as winemaker.
