Geography and demography
Capital: Berlin
Population: 82 million
Active population: 40 million
Germany is a federal state, comprising 16 regional states (Länder); including three cuty-states (Berlin, Hamburg, Bremen).

Capital: Berlin
Population: 82 million
Active population: 40 million
Germany is a federal state, comprising 16 regional states (Länder); which includes three city-states (Berlin, Hamburg and Bremen).

Regime: representative, parliamentary democratic republic governed by a federal government. Each state and city-state has its own government which is particularly competent in enforcing federal legislation.
President and Head of State: Horst Köhler
Chancellor and Head of Government: Angela Merkel

Gross Domestic Product 2007: EUR 2,423 Billion
GDP per inhabitant 2007: 113% (EU average: 100%)
Currency : Euro €
Economy breakdown: Services 69,1%, industry and construction 30,0%, agriculture 0,9%
Most important industrial activities: chemistry, motor industry, transport and financial services. Germany is France’s primary business client, absorbing 10.3% of its exports (2004) and France is also Germany’s principal trade partner absorbing 9% (2004) of Germany’s exports.

The Romans introduced vineyards in Germany over 2.000 years ago, thus, by the time of the Christendom era, the Rhine vally was already an established wine producing area. After the fall of the Roman Empire, feudal wars destroyed the vineyards; but as in the rest of Europe, religious orders led the new period of expansion. German vineyards reached their peak under the influence of the church during the first half of the 17th century, when the wine-growing area covered over 300,000 hectars; compared to 100,000 hectars today. A few of these old large wine estates can still be found as heritage of the old monasteries.
After Napoleon’s conquest of the Rhineland in 1803, the vineyards of the church were mostly privatised and became property of private owners or the state, the largest vineyard owner in Germany. The private owners continued the focus on quality. German wine from the Rhine and Mosel area reached international success and was exported to England and Russia amongst other countries. Unfortunately, during the 19th century, the phylloxera destroyed many of the vineyards.
The know-how of German wine growers is an export hit, just like the wine itself, and has influenced wine production in South Africa, Australia, California and Chile etc. alike.

The number of vineyards is higher in the South and South-West of the country, towards the French border, and is generally situated around the Rhine area and its tributories (Ahr, Mosel, Neckar, Nahe, Main) in order to benefit from the most sunshine hours. Only the areas with the most suitable soil are cultivated and are usually situated close to protected water supplies. Table wine only accounts for 5.5% of production. German vineyards are situated between latitude 47° and 57° north, nearly as high as the wine growing boundary. This results in a high concentration of white wine; with 63% of the total wine production and only 37% of red wine production. Even though 140 different grape varieties are cultivated, only a dozen are mainly represented on the market. These more famous grape sorts cover 1/3 of the 102 000 h of cultivated area in Germany. Riesling and Müller-Thurgau with 21% and 13% of cultivated area respectively, are the main grape varieties. Also due to climatic changes, a trend towards red grapes wa noticable in the last years, but has now reached its peak.
Production averages 10 million hectolitres, depending on the annual climate, which also has influence on the tastes of the wines.

Germany benefits from 13 wine regions, which offers a large variety of different and characteristical flavours for the region.

Six regions account for a total of 90% wine producing area alone: Hesse-Rhenanie (26,000 ha), Palatinat (23,000 ha), Mosel-Saar-Ruwer (8,000 ha), Bade country (15,500 ha), Würtenberg (11,000 ha) and Franconie (6,000 ha). They are situated in river valleys, protected by hills, often with steep slopes. The Palatinat and Bade regions and particularly Würtenberg benefit from high sunshine hours and therefore produce more than 30% of Germany’s red wine. The Palatinat, Hesse and Mosel-Saar regions possess a large and diverse commercial structure, and many companies play a significant part in exports and direct sales of wine. Other regions are more orientated towards national, and even regional, consumption. The operational structures are often small and rely heavily on co-op wineries.
Compared to the 6 large regions, the following regions play a inferior role: Nahe (4,000 ha), Rheingau (3,000 ha), followed by much smaller wineries- Mittelrhein (500 ha), Ahr Valley (550 ha), Hessische Bergstrasse (450 ha), Saxony (450 ha) and Saale-Unstrut (650 ha). The last two are wineries in former Eastern-Germany, which have been incorporated into German and EU legislation and standards since 1990. The vineyards are also planted in river valleys, sometimes very steep, like in Mittelrhein where the sun reflects off the river Rhine, which, combined with the abrupt slopes, creates a green house effect. Production is mainly sold locally, often through direct sales, as many regions are touristic. Rheingau is the most famous region with an international reputation and plays an important part in traditional sales and distribution, as well as export and catering. The well known properties used to belong to the aristocracy, and it is there where one can find, more than anywhere else, full time vineyards. More continental, the Saxe and Saale-Unstrut vineyards experience production that is quite varied from one year to the next. After a period of withdrawal during the ex-GDR, they have experienced a transformation and expansion (mechanisation of vineyards, re-cultivation, investment in wine storehouses, etc.).

German legislation concerning food is fairly complex and is imposed at the same time as federal and regional law. For wine bottle labels, this results in a huge amount of information and conditions necessary to be published, as for example the condition that they have to be legible and able to be scanned.

The wine ranking is based on the European model, with three levels:
1- Table wine (Tafelwein): preceded by the term Deutscher to confirm that it is of German origin.
2- The vins de pays (Deutscher Landwein): indicating that it originates in Germany, similar to French vin de pays. They are graded according to region of origin (of which there are 19).
3- Appellation wines: There are 13 wine regions (Gebiete) characterised by geological and climatic conditions and grape variety (see above). These regions are divided into different areas (Bereiche) which group together various villages and hold complementary information on the origin of the grape. However, the original marks go further and combine Burgundian qualities and climate. Thus each Bereich gathers together various homogenous wines (Grosslagen) which themselves are divided into individual plots (Einzellagen). In practice, only the most famous plots are mentioned on the labels. For the majority of the time, wineries prefer to omit these optional information, creating further complexity.

Germany offers a scheme of labelling very particular wines providing information about the content on the label on the bottle. It is based on the sugar amount of the must, that is the maturity of the grape, an essential concern of the vineyard.
Thus, high quality wines are divided into the following :
1- VQPRD simply named Qualitätswein ou QbA (“Qualitätswein bestimmer Anbaugebiete” or controlled origin). These wines have to originate from one of the appellation regions and respect the criteria of grape varieties, elevation, minimum alcohol content etc. For these wines, chaptalization is authorised. They represent 66% of production. Since the 2000 harvest, Germany has introduced two further quality labels ‘Classic’ and ‘Selection’ with more restrictive production conditions, aimed at producing very ethnic wines. These labels aim to improve the position of German wine in an international context.
2- VQPRD with Prädikat („Qualitätswein mit Prädikat“) is another quality label. This term is followed by an official control number (A.P.NR) that the wine obtains after successfully passing a series of tests (grape maturity, analytical examiniation, taste approval). For these wines -28% of production- chaptalisation is forbidden, a notion to which the Germans attach great importance.

The labels on these wines are always followed by a complementary note which indicates its level of quality:
Kabinett for grapes, usually white, harvested when fully mature (67–82°Oechsle), with low alcohol content.
Spätlese for late grape harvests where grapes are gathered about a week after the usual harvest (76-90° Oechsle), creating a more concentrated and full bodied wine.
Auslese for grapes that have been sorted for a better selection (83- 100°Oechsle), generally creating wine with a gentleand noble taste.
Beerenauslese for grapes with noble rot (110-128°Oechsle), a rarity; rich, sweet flavour.
Trockenbeerenauslese for earlier grapes which are then dried befor being vinified (150 – 154°Oechsle), these are very rare, rich and sweet, wines with very high prices.
Eiswein for grapes that are harvested when frozen (-7°C, 110 - 128°Oechsle), with a remarkable balance between sweetness and acidity.

German law defines four types of wine: Dry (trocken), demi-sec (halbtrocken), sweet wine (lieblich) and gentle wine (süß). Each type has to abide a maximum sugar level and acidity levels. In effect, these German wines are often fairly vivid allowing a sugar solution to remain in the mouth, because German wineries often stop vinification a little before all the sugar from the grape is consumed by the yeast. Consumption is being more and more orientated towards dry and medium dry wine.
'Sekts': These are sparkling wines made according to the traditional method or transferred method using closed tanks. They have to go through two fermentations and titrate at least 10% alcohol and 3.5 pression bars. The term ‘Deutscher Sekt’ is only applicable for the sekts of German wine. The Sekts b.A. (“bestimmter Anbaugebiete”) come from another determined region. According to Winzersekts, they are elaborated from grape to bottle at the winery. There are different types of sekts according to the quantity of sugar residue: extra-trocken, trocken, halb-trocken, mild (extra-dry, dry, medium dry, mild).

Germany produces about 10 million hectolitres annually (2007: 10.5 hl), consumes more than double, and still exports some. With 12 million hectolitres imported each year, Germany is at the top of the list of European wine importers, before Great Britain. Around 80% of imports are still wines (of which 60% is red wine), but Germany also buys large quantities of sparkling and semi-sparkling wine (800,000 hl and 500,000 hl respectively).

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The main suppliers are Italy (6,3 million hl), France (2.3 million hl) and Spain (2,1 million hl), sharing nearly three quarters of total export volume between them. Nevertheless their market share is beginning to erode, to the benefit of newer wine producing countries in Europe, such as: Austria and Macedonia (between 300,000 and 350,000 hl each) and, to a lesser extent, Greece, Hungary, Romania and Bulgaria (100,000 – 150,000 hl each). These countries have experienced an enormous progression since the second half of the 1990s. Other importing countries are the US, Australia and Chile, who now provide Germany with between 400,000 and 450,000 hl each year (2006).
Average price (€/hl) Italy 104, France 253, USA 143, Spain 138, Greece 149, Macedonia 38, Rumania 73, Austria 111, Hungry 88, Chile 127, Bulgaria 90 (Deutscher Weinbauverband nach Angaben des Statistischen Bundesamtes, 2007). An important characteristic of the German market is the import levy. At only 145 € per hectolitre it is among the lowest in the world, as there is a huge emphasis on discount dealers in Germany.
Final Aspect: Germany also exports a figure in the region of 3 million hectolitres (2007) per year, with Great Britain remaining the largest export market with a market share of 25% before the Netherlands with 12%. These exports are stable, in fact much more stable now after years of decline. Additionally, German winegrowers culitivate 60% of the world’s Riesling production (2004). A particular success could be marked in the markets of China (+53%), Belgium (+32%), Switzerland (+27%), Russia (+22%) and Norway (+12%).

In 2006/07 German wine (still and sparkling) consumption lies at all time high level of 23.8 litres per capita (20 million hl). This increase can be attributed to the decrease in beer consumption, although with consumption levels of 116.0 litres per inhabitant per year, beer remains by far the most consumed alcoholic beverage in Germany. However, it must be noted that wine currently enjoys a very favourable opinion, symbolising a way of life that the Germans long for. Beer is perceived as a more common and masculin drink. Germany is the fourth largest consumer market for wine; following France, Italy and the USA.

In total, in 2006, the German wine consumption represented around 20 million hectolitres. During the last 15 years red wine has experienced an enormous progression: while in 1994 it accounted for only 30% of the wine market, today it represents more then half of the total volume consumed. The amount of rosé consumed has remained fairly static (between 5%-8% in total in 2006), whereas the market share of white wine has drastically decreased from 60% to 40%. A reason for these changes in consumption is that wine is being drunk more and more with meals. This trend has had an important effect on imports (of which 63% is red wine), and also on German wineries, which have had to re-orientate production towards red wine (in 2006 39%, in comparison with 25% in 1998).

45% of German wine is consumed in Germany. After experiencing a heavy decline during the last 10 years, this sector of the German market is beginning to stabilise. German vineyards are competing to maintain their position within the national and international market and are succeeding in spite of higher prices (around 181€ per hl in 2005) in comparison to imported wine (around 139€ per hl in 2005). In 2002 Germans spent on average 2.08 € per bottle of white wine (2.77 €/l) and around 2.34 € for red (3.12 €/l), a reduction of 8.4%. These new low levels are explained by the structure of the market.

Organic wines:
20 years ago the first Organic Wine Union was established and has now been joined by a number of other such unions. To produce organic wine, the same vinification methods are used, indeed, the difference can be found in the vineyard. Organic wine producers, for example only use organic fertilisers, such as humus and compost and no chemical plant protection; but only sulphur and copper, or even backing powder, against mildew. This does not mean that conventional wine production has less respect for the environment, which has a high significance in the country. All wineries use environmentally friendly methods. Organic wines are widely distributed and can be found in every good wineshop.

Production: German viticulture is extremely fragmented, there are nearly 69,000 wine producers but nearly three quarters own less than 1 hectare. Cooperative wineries have a big presence, accounting for more than half the production in Wurtenberg, the Bade region (with cave Breisach, the largest in Europe) and in the smallest vineyards (Saale-Unstrut, Ahr, Saxe). The main authorities representing production are:
-The Institute for German Wines; an organisation which plays a role in coordination, research, quality control, promotion of German wines and supplies information and help to wine companies. Furthermore, it acts as an economic research institute for the wine market.
Deutsches Weininstitut GmbH, Gutenbergplatz 3-5, 55 116 Mainz, Tel. + 49-(0)6131-2829-0, Fax + 49-(0)6131-2829-20 www.deutscheweine.de
-Association of German Wine Producers; an association which aims to defend the interest of wine producers through pressure groups and lobbying, support groups and initiatives (e.g. specialist exhibition ‘Intervertis-Interfructs’, professional publications etc).
Deutschen Weinbauverband eV, Heussallee 26, 53 113 Bonn, Tel. + 49-(0)228-949325-0, Fax. +49-(0)228-949325-23 www.dwv-online.de
Merchants: Besides the coop wineries, supplying wine from their members, commercialisation in Germany is forcing its presence on the merchants and import businesses. A certain number of are from big brands, notably in the table wine sector (Domkellerstolz, Blanchet, Amselkeller, Medinet, etc.). The town of Bremen, as with a few other production areas, is traditionally a Mecca for German wine merchants. Some distributors like ‘Edeka’ have their own merchant and packaging business.
Distribution: Hard discounters are the main distributors in Germany (cf. chapter on consumption), ALDI alone accounts for 22% of wine volumes. The multiplication of transactions/deals/operations help the entry of new products, often quite originally, over a week period. ‘Classic’ distibution (Edeka, Rewe) follow (behind) hard discounters but with a larger presence of brand wine. Certain supermarket chains and bigger shops (Karstadt, Kaufhauf, Globus) have a different approach, with a policy of brand and choice. German off-licenses are experiencing a diminishing role in the market and today they only account for 5% of total wine sales. This shows an extremely fragmented sector. The main organised chain, “Jacques Wein Depot” has 250 shops spread throughout Germany. Other chains like “Vom Fass” (with 160 shops) or “Barrique” (with 25 shops) specialise in the original concept of selling wine from the barrel. Buying associations for off-licenses such as ‘Interpartner’ also exists, but they don’t represent a huge part of the market.