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Ep 27: TNWG Wine Times: Austria and Tokaj in Focus

This week we are taking a deep dive into Austria and the Hungarian region of Tokaj too (not just famous for its sweet wine, Tokaji). First, though, let's begin with the winemaking nation of Austria.


Probably best known for its high acid, dry white wines in the shape of Gruner Veltliner and Riesling. However, have you heard of the likes of Zweigelt, Blaufrankisch or Sankt Laurent ?

🤓 Austrians have actually been making wine since the Bronze Age. Back in the 15th and 16th centuries, they had a whopping 150,000 hectares of vineyard area, prior to the Turkish invasion, higher taxes on wine and increase in beer popularity which all brought reductions.

It got worse for Austria in the 20th Century - in the mid-1970s and 1980s the demand was so high that a small number of producers decided to add diethylene glycol, or otherwise known as antifreezing agent, to the wines to increase volumes. It was discovered in 1985 and as a result exports dropped from near 30 million litres to 5 million within a year.

The good news is since the year 2000, export volumes have more than doubled and the value has increased some 6-fold! (Not great for a consumer mind you!)

🌥️ Austria has a cool continental climate and most vineyards surround the banks of the Danube. In the 1980s the training method (the way in which the vines are positioned on trellis) was via the Lenz Moser system - to ensure they were 1.2-1.4m above the ground. However, there are now far more single or double Guyot systems in place. 

🍇Two thirds of all vineyards in Austria are planted with white grape varietals. In fact, Gruner Veltliner accounts for a whopping 33% of all plantings. Better suited to clay and loess soils, retaining higher water levels. Skins are thick an can give a peppery note to the wines. Medium (+) to high acidity, not oaked. Citrus and green fruit aromas.

🍇 Zweigelt - most planted black grape, 14% of all grapes. Crossing of Sankt Laurent and Blaufrankisch. Ripens early, vigorous so leaf removal key. Medium (+) acidity, medium tannins, with red fruits especially red cherry dominant. 

🍇 Welschriesling - second most planted white in Austria. High acidity, neutral aromatics. Thin skins and therefore perfect for noble rot to create sweet wines.

🍇Blaufrankisch - second most planted black grape. Medium (+) to high tannins, high acidity, deep colour and black fruit foremost. Buds early so spring frosts an issue and ripes late, generally only in Burgenland (warmer).

🍇 Riesling - actually only accounts for under 5% of all plantings, mainly from Niederosterreich. Typically dry, full bodied, medium alcohol, ripe stone fruit and tropical, high acidity. Nutty honeyed and petrolic with age in bottle.

As we have found from these deep dive weeklies, there is also a structural way of identifying levels in Austria, in an attempt to be in line with EU, PDO and PGI terms. For Austria it is:

  • Wein - no geographical indication

  • Landwein - wine with PGI

  • Qualitatswein - Wine with PDO

Additionally, within Qualitatswein there is also 2 sections - Klassik - wines with a vintage indicated. Reserve - dry white wines with min 13% ABV, harvested and released later than standard wines.

🌍 Four of the Nine states in Austria are 'significant' in wine terms. They are Niederosterreich, Burgenland, Steiermark and Wien.

🌍 NIEDEROSTERREICH - the largest grape growing region, with two thirds of the plantings being white and Gruner Veltliner making up nearly half of all of the plantings. Within the region, Weinviertel is in the north, then the Danube regions of Wachau, Kremstal, Kamptal and Wagram. Plus the warmer Pannonian plain in the southeast.

🌍Wachau - the region along the north bank of the Danube. Riesling (gneiss soils) and Gruner Veltliner (loess) planted on steep terraces. The region only receiving 460mm of rain per year. There is also 3 different styles of white classification:

  • Steinfeder - fruity, dry wine with a max of 11.5% ABV

  • Federspiel - a more concentrated, dry wine with alcohol ranging between 11.5-12.5% ABV

  • Smaragd - highly concentrated, dry wine with ripe fruit flavours, min 12.5% ABV

🌍Kremstal - around the town of Krems. Influenced by the warm Pannonian plain. Reisling, Gruner Veltliner and Zweigelt region.

🌍Kamptal - named after the river Kamp running through it. Large diurnal range region with the Pannonian plain mixed with the cool air of the Bohemian Massif.

🌍 Wagram - north and south of the Danube, based on loess soils (G Veltliner). 

🌍Weinviertel - largest appellation within Niederosterreich. Gruner Veltliner accounts for half of the plantings. Only 400-600m of rain. 

🌍Thermenregion - close to Vienna, 40% red grapes due to the warm air from the plains. Some of the best Sankt Laurent wines, alongside local whites such as Neuberger, Rotgipfler and Zierfandler. 

🌍 BURGENLAND - bordering Hungary, it is flat and warm. Black grapes make up 56% of plantings, especially Blaufrankisch and Zweigelt. 

🌍Neusiedlersee - on the eastern shores of a large lake, at the warmest part of Austria. High humidity and botrytis prevalent. Welschriesling planted and creating some of the finest sweet noble rot wines as a result. Think of marmalade as a flavour!

🌍Leithaberg - west of the above, with a variety of styles of wine produced. The Leithaberg hills helping with a diurnal range of temperatures. 

🌍 Mittelburgenland - south of Leithaberg. Exposed to the plain, with 51% Blaufrankisch planted.

🌍 STEIERMARK - in the south eastern corner of Austria by Slovenia. Steep hills and terraces in place. Spring frost and hail are issues. Crisp, white dry wines indeed even 18% Sauvignon Blanc.

🌍 WIEN - surrounding Vienna. Most produced and consumed immediately. There is a white wine called Wiener Gemischter Satz which is a blend of upto 20 grape varietals. 

📈 There are almost 11,000 wine estates in Austria (bear in mind there are around 900 in the UK!). More than half the sales go to the hospitality sector. IN 2021 Austria exported 23% of overall production by volume. Main export markets are Germany, Switzerland and USA.

Now let's see how that compares to Tokaj!


🤔 Quite possibly one of the most celebrated SWEET wine regions in the world, producing the amazing Tokaji sweet wines, BUT did you know they make amazing dry wines too?

Hungary was producing sweet wines and was across royal courts prior to 1945, when Hungary became a Communist state where focus shifted from quality to quantity. However, in 1989 foreign investment from the likes of AXA, Vega Sicilia and Hugh Johnson saw winemaking take a big upturn.

🌍The Tokaj region is in the north eastern corner of Hungary, extending from the town of Tokaj into the foothills of the Zemplen mountains (by the Slovakian border). 

🌅 Tokaj has a moderate, continental climate. Summers are warm whilst winters cold. Vineyards planted on slopes reducing frost damage. Rainfall for the region around 500 to 600mm annually. There are 2 major rivers - Tisza and Bodrog, the latter which floods regularly giving moist air and ideal climatic conditions for noble rot.

🌍 Tokaj is actually a region of hundreds of extinct volcanoes. The deep bedrock overlaying soils, most notably NYIROK, said to produce the most powerful wines. Main disease concerns for the region are powdery mildew and in wet years, grey rot (as opposed to good noble rot), with pests including wild boar and birds.

Grape Varietals of Tokaj:

🍇 Furmint - most planted , 63% of all. Dry to sweet wines produced. Late ripening but high acidity, thick skinned too. 

🍇Harslevelu - second most planted (19%), similar to Furmint but more used in blends of dry to sweet wines.

🍇 Sarga Muskotaly - also known as Muscat Blanc a Petits Grains, 12% of all vines. Floral notes to both sweet and dry wines.

The key in Hungary for winemaking is that there are a range of styles :

🍇 ASZU - grapes infected by botrytis, shrivelled on the vine. A Classic Aszu is deep amber in colour, high acid, low to medium alcohol, intense aromas of orange peel, apricots and honey. Prior to maceration, most producers mash the grapes into a paste. The paste is macerated between 12 to 60 hours! Once it has been created, it must be stored for a minimum of 18mths in oak, sometimes longer.

Aszu upto 2013 was classified by its level of sweetness which were known as the puttonyos scale. However, now it is based on minimum levels of residual sugar with much higher readings required.

🍇ESZENCIA - very rare and expensive. Only the syrup run off from Aszu berries is collected. It can take years to ferment due to it being so high in sugar levels! The minimum residual sugar level is 450g per litre - rot your teeth time!

🍇 LATE HARVEST - maceration is not used. Produced with a lower proportion of botrytized grapes than Aszu wines. Lighter bodied as a result. Minimum residual sugar levels of only 45g/L although most are 90-110g/L. No oak age requirement.

🍇SZAMORODNI - made from whole bunches with varying health. Sweet or dry styles. Need to be aged in oak for a minimum of 6 months. Dry styles are aged under a thin film of flor (much thinner than sherry) for upto 10 years.

🧑⚖️ When Hungary joined the EU in 2004 it adopted the PDO/PGI system. Tokaji PDO is broken down into village and estate wines and from 2013 it must be bottled in the region. There is also a PGI level - PGI Zempleni for other grapes especially international grape varietals used. 

In 2022, there was 5,260ha under vine, this has increased from 10 years ago. Average holdings are small (between 1 to 2ha). Aszu production accounts for 10% with dry wines now accounting for 15%. Exports outside of Eastern Europe are to UK, USA and Canada as the main three of note.

💡 TNWG Tips for Tokaj and Austrian Wines

  • Tokaj wines are not just sweet wines as explained. If you are looking to try some sweet wine versions they will vary in price dependant on their ageing and style, however, you can pick up some reasonably priced smaller bottles at good prices. So do scout around!

  • Austrian wines - as a general rule, any Gruner Veltliner from Austria is going to be a pretty good example. Try the style, it is true to Austria and really is a uniquely tasting wine. The other note is whilst there are not a huge amount of access to the likes of Zweigelt - when you do see them, they can vary in style and are well worth looking at for value for money reds!



On the back of China abolishing the high tariffs on wine exports from Australia, producers shipped a whopping AU$86 million / £44.7 million's worth of wine to China in the month afterwards. An outline of how dependant the Australian wine market is on the big buyer - China!



On the week (as at 14th June 15:00 LDN) changes:

EQUITIES: ⬇️ FTSE 100 down 1.6%; ⬇️ DAX down 2.8%; ⬆️ S&P 500 up 1.2%; ⬆️ Nikkei 225 up 0.5%; ⬇️ Dow Jones down 1.32%;

COMMODITIES: ⬆️ Brent Oil up 3.9 % ; ⬆️ Crude Oil up 4.6% ; ⬆️ Gold up 0.6%; ⬇️ Silver down 1.7%; ⬇️ Copper down 1.8%

BONDS (in yield terms): ⬇️ UK 2yrs lower 0.2365%; ⬇️ UK 10yrs lower 0.225%; ⬇️ German 10yrs lower 0.276%, ⬇️ US 2yrs lower 0.042%; ⬇️ US 10yrs lower 0.224%;

WOW! What a couple of weeks in markets! A quick recap sees not only the snap election call from Rishi and the Conservative Party, but also Macro in France and we still have the US elections too. In terms of long term trending and investors looking at a macro outlook, in truth, there has been little change from two weeks ago. Whereby there is still frailties in the underlying controlling of inflation. 

The other development in developed markets was the ECB deciding to cut interest rates, albeit if you asked me to explain their rationale and their forward guidance, I think anyone would struggle. The forward guidance was lacking to say the least and gave me little confidence of a structured, continued approach to reducing rates, so for now, I think it is one and done.

The UK and US however, are now faced with a similar scenario but for differing reasons. The cutting cycle for the UK will be put back until after the elections (4th July) and the ensuing black out from BOE officials into the elections tells us as much as we need to know around the lack of action to overriding interest rates. The US is seeing better figures than maybe the FED expected and the approach is still for a 'wait and see approach'.

In terms of what this means for equities, US equities have been going to the moon led by the tech sector and I am still more than happy to hold as the outperformance for me looks set to continue. You could argue over the longer term it is a play on who you think will win the US elections, with Trump more likely to want a booming equity market with de-regulation at the heart of his views, but medium term it still looks promising. UK equities - hmm, not as much.

Very short term, still happy to be holding, I prefer to hold short end gilts, which as we have discussed before secure on maturity a capital gain which is not taxable versus the interest rates on current and savings accounts. However, rates are reasonable for the savings accounts given the lack of interest rate action from the BOE and therefore, for me, best value is to look at low coupon 18 month and out type duration for short end gilts for getting the most returns on the least risky assets.

Housing for the UK looks to be somewhat subdued although it is area dependant and of course still with underlying themes like areas for catchment areas for schools, especially if Labour get into power (which is effectively a given at this point) and VAT is added to private schools. So certain pockets will still have a good bid tone, whilst the more general side of the market seems to have died down in demand and supply in parts of the UK is outstripping it currently. I would expect this to continue near term and therefore for me, property is not at attractive levels for entry as yet.

In fine wine investment, Bordeaux again dictated terms for value of trade exchanging hands on the Liv-Ex exchange. According to Liv-Ex it was up to 38% of total value. The en primeur season has been taking the headlines and given the year on year reduction in pricing has left certain First and Second Growth wines at a deep discount to last year's pricing, which has meant I have leaned on adding to the portfolio in key names to ensure a vertical is held (i.e. a list of different vintages from the same wine producer) for long term holds.


The BIG NEWS this week comes with the collaboration of The Northern Wine Guy with the largest European foodhall development, Cambridge St Collective in Sheffield. More specifically, we will be doing a tutored session of FIVE wines and FIVE cheeses in the private room as part of the roll out of experts in their field.

🎙️ Additionally, just as BIG, there are Podcast Episode releases that have taken place in the last couple of weeks which come from interviewing the wonderful Sarah Knowles MW at The Wine Society. It is a double bill because there is also a new episode with the magnificant Michaela Morris too who speaks to us on all things Italy.

You can DOWNLOAD all these episodes for FREE on the any podcast app that you use or alternatively head over to my website where all the episodes are housed!

The Northern Wine Guy will also be making a GUEST APPEARANCE at the English Wine Project to look after the wine and vineyard tours in one week's time, in line with the English Wine Week which begins tomorrow. So be sure to book (if there are any spaces left) or alternatively, make sure you look at the variety of offerings and tastings being run in the coming weeks to support your local vineyard/winery!

Have a great weekend!


Andy a.k.a. The Northern Wine Guy

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