Once tainted, Portugal's
cork industry fights back
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[May 09, 2017]
By Andrei Khalip
LISBON
(Reuters) - A decade ago, shares in the world's largest cork producer,
Corticeira Amorim, didn't look like a great bet.
Its biggest customer, the wine industry, was flirting with cheaper
products that threatened cork's dominance: screw tops and plastic
stoppers. Many premium wine-makers had spurned cork, blaming it for
occasionally tainting wines with a moldy taste.
That was then. The cork industry has since staged a comeback:
Lisbon-listed Amorim's share price has soared almost six-fold and cork
exports from Portugal, the world's dominant producer, have just regained
their peaks of 15 years ago.
"When you go back 12, 15 years, the forecast for cork was anything but
optimistic. Where we are today is a completely different territory from
what most people thought possible then," said Carlos de Jesus, Amorim
marketing director.
Sales of plastic stoppers shaped like a cork and aluminum screw caps,
made by firms such as Australia's Amcor, surged to account for almost
half of the U.S. market, the world's largest consumer of wine, in 2009,
according to the U.S.-based Cork Quality Council.World cork exports:
http://tmsnrt.rs/2qRYhP8
Screw tops took over the Australian market, and are now used to seal
most bottles produced in South Africa and Chile too.
However, cork has rallied, partly by investing in research to eliminate
cork taint - a dank, moldy smell sometimes caused by microscopic fungi
found in cork-tree bark - and persuading some wine-makers to ditch
aluminum and plastic.
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Cork has raised its U.S. market share to around 60 percent, and its
share of the global market, which Amorim estimates is worth about $1.3
billion a year, stands closer to 70 percent.
But the battle for market share has only just begun.
China is emerging as a huge new market as its middle class of more than
100 million people develops a taste for wine. Cork and its rivals are
engaged in a battle for the hearts and minds of China's wine lovers -
and for now cork seems to be winning.
"It is a tradition. It represents prestige," said Matthew Gong,
Shanghai-based spokesman for major Chinese wine importer ASC Fine Wines.
However, he added, Chinese consumers would become less sensitive to the
question of cork or screw cap as the market grew, especially younger
people drinking cheaper wines.
"More and more consumers don't mind as much whether the closure is a
cork or a screw cap," he said. "But for top wines, clearly cork is
preferred."
Cork exports to China jumped 22 percent in 2016, according to cork
makers' association APCOR. As the biggest buyer of Australian wines,
China also has the potential power to influence how producers seal their
bottles in that predominantly screw-top market.
Amcor did not respond to a Reuters request for comment. However, The
Winemakers' Federation of Australia denied cork makers were making
inroads. "It's definitely not a move in Australia or New Zealand. We are
still very much screwcap for its convenience," said Chief Executive Tony
Battaglene.
He said about 90 percent of the estimated 5 billion full size bottles
produced a year in Australia are sealed via screw top.
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LASERS & ROBOTS
In the war with screw tops and plastic, Amorim has recruited robots,
lasers and a battery of chromatographic analysis machines which can
detect the almost invisible signature of taint - the chemical compound
TCA - in a few parts per trillion, or equivalent to one drop in enough
water to fill 20 Olympic swimming pools.
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![](../images/050917pics/busine19.jpg)
Workers are seen during the production process at the Waldemar
Fernandes da Silva natural cork stoppers factory in Argoncilhe,
Portugal, April 11, 2017. REUTERS/Pedro Nunes
![](http://archives.lincolndailynews.com/2017/May/09/images/ads/current/graue_17_malibu_022717.png)
Bark
is carefully stripped from cork oak trees in Portugal's central-south Alentejo
region. Then at Amorim factories near the northern city of Porto, equipment
processes it into slabs that are steam-treated, cut into smaller pieces and fed
by robotic arms into machines that punch out stoppers. These are sorted and
polished using lasers.
The finest-quality stoppers are still punched by hand before passing through the
humming rows of chromatographic analyzers.
Amorim's NDTech process is among the technologies that sprang from more than 700
million euros ($766 million) invested by the Portuguese industry in new
equipment and research, and other companies hope to catch up soon.
The
industry has also launched cheaper TCA-free stoppers made from shredded cork for
lower-end wine makers. They are made by Amorim and others such as
French-Portuguese Lafitte Group.
The R&D drive was a response to the industry's cork taint crisis, which peaked
in the early 2000s when even European makers of premium wines began joining the
switch to screw caps.
In 2005, Laroche Wines, owned by AdVini, sealed all of its Chablis, including
high-end Grands crus, with screw caps. But 10 years later, the French winery,
which has annual sales of 25 million euros, has switched back. It uses cork for
all its Grand cru, Premier cru and most selection wines. At the end of last
year, it started sealing its top wines with NDTech.
"After the big cork pollution crisis, the cork industry was on the defensive.
The incredible work they did changed things... The cork quality increased
drastically in the last 10 years," said Gregory Viennois, technical director at
Laroche. Joao Rui Ferreira, head of APCOR and CEO of cork stoppers maker WFScork,
said cork was not aiming to return to its total domination of the late 20th
century, when it held 95 percent of the global market. Instead, it was focusing
on premium wines in what is now a much larger overall market.
"The
trends are very clear. Wine consumption in the world is moving from volume to
value...," Ferreira said.
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UNCONVINCED
Influential wine critics are still not convinced. For them, taint remains a
serious problem for cork.
APCOR estimates that up to 1.2 percent of wine bottles are still ruined by TCA,
but some producers and critics cite anecdotal evidence that the actual
proportion is much higher.
Lisa Perotti-Brown, a reviewer for the Robert Parker Wine Advocate website,
wrote in April that during a recent tasting of more than 900 wines from
California's Sonoma County she had to discard up to 8 percent of the samples
because they were corked. She warned that even at levels below the detection
threshold hawked by Amorim, TCA can still damage the wine, muting or otherwise
dulling the aromas and flavors.
(Additional reporting by Adam Jourdan in SHANGHAI and Benjamin Weir in SYDNEY;
Editing by Mark Bendeich and David Stamp)
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