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Producers battle over Vinea as wine drink makes comeback
Now in plastic bottles, Vinea has made a triumphant return to the market, and its two Slovak producers are weighing expansion abroad. photo: Martin Janoško
4 Sep 2000 Tom Nicholson Business
"We've been making Vinea since 1980," said Miloš Ševčík, director of Víno Nitra, one of two Slovak firms who make the drink. "Our best years with Vinea were 1989-90, but after the revolution there was a heavy drop-off caused by the inflow of all kinds of foreign non-alcoholic drinks. People were hungry for something foreign, for something not made by domestic producers. But recently they have been returning, they have rediscovered quality goods, and the Vinea name has made something of a comeback."
Víno Nitra is one of the top three wine producers in Slovakia, with 1999 turnover of 405 million Slovak crowns ($8.6 million) and a gross profit of 4.5 million crowns. The firm plans to keep at least the same numbers for this year, and having spent 40 million crowns on investments into its bottling line and other technology last year, is hoping that products like Vinea will generate new revenues.
Víno Nitra's Vinea won a 'Slovak Gold' award this past April as a top-quality domestic product; the firm is now hoping to export some of its production into Europe. "We've had some discussions with some German partners, and they're doing a market survey there and we'll have to see how it works out," said Ševčík.
Less than an hour to the west by car, in the village of Pezinok, the country's only other Vinea manufacturer, Malokarpatský vinársky podnik (MVP), has similar aspirations.
"We used to export Vinea to the US, but that was a long time ago, when we were a state company, and since then exchange rates have changed and so on, and it has become unprofitable to continue exporting," said Viktor Čorej, director of Vitis Trade, MVP's sales agent and distributor. "Now we are thinking of sending Vinea syrup to the US and having it made there. We're in the stage of looking for a partner and contacts. There is interest, but things are still in the development process."
MVP's Vinea, which won a 'Golden Sickle' award for quality food industry products at the Agrocomplex Fair in Nitra this past month, is also promoted as an image product that doesn't yield great profits but gives the firm great visibility in Vinea-thirsty Slovakia. "It's a natural drink, made without chemicals, but it's quite expensive to make and to bottle," Čorej said. "It's basically an image-making product which gives us an advantage over our competitors." MVP had a turnover of over 800 million crowns in 1999, with gross profit of 10.6 million.
There is little love lost between the two Vinea makers, however, despite their mutual satisfaction with the second life Vinea is enjoying.
Vinea was discovered in 1974 by celebrated Slovak viticulturist Ján Farkaš, who was a biochemist working for the Bratislava Scientific Institute for Viticulture and Wine-making. A patent for making the drink was given to MVP in the 1970's, and the firm started with .25 litre bottles followed in 1980 by .7 litre Vinea containers.
However, according to Víno Nitra's Ševčík, a license was extended at the same time to Víno Nitra to make Vinea as well - a license which the company continues to operate under, but which has been disputed by MVP.
"There is a great competition between us, not only because our basic product line is wine," Ševčík said. "Vinea for both of us is rather a luxury product, and the problem here is protection of the brand name. That's been a long-standing battle. Basically, the brand name was owned by a state company in Bratislava during the Czechoslovak federal republic. Then, after market conditions were liberalised, MVP got the brand name while we got a license to manufacture Vinea. Then MVP asked that this decision be cancelled, and we appealed it and a court upheld us, and now we are waiting for a final court decision, maybe in the next year or two. At the moment we are making Vinea, but it's difficult to say how the case will end."
MVP, for its part, says Víno Nitra has no right to make Vinea. "We are the holder of the brand name," said Čorej. "They [Víno Nitra] hold only a license to bottle it. We have cancelled this license agreement, and now it's in the courts. Vinea began production in Pezinok, it was always a Pezinok product, and during the existence of the state company a decision was taken that a license would be extended to bottle it in Nitra. But unfortunately those were times when we didn't know if a license contract had been signed or not. Now, after a new license was signed, we cancelled it. So they're making it even though they have no right to do so."
The squabble has been complicated by the fact that MVP was pushed into bankruptcy last year after a decision by the Bratislava regional court on December 29, 1999. The reason - a 225,800 crowns debt owed by MVP to a company named TBS Stará Turá, whose director, Vojtech Tlčik, used to be a member of the MVP board of directors, according to the Slovak business weekly Profit. According to court documents, MVP at the end of 1999 had assets of 881.6 million crowns, business debts of 130.19 million and other debts of 16.8 million crowns.
While The Slovak Spectator was unsuccessful in obtaining an interview with MVP director Ľubomír Vitek, Vitis Trade's Čorej admitted that "MVP is in bankruptcy at the moment, and the premises are rented".
But whatever happens to MVP, and whether or not Vino Nitra is permitted to continue making Vinea, the drink itself is enjoying an unblemished reputation at the moment.
"Having just won a Golden Sickle award at Agrocomplex, we are trying to support Vinea's return to the Slovak market," said a Vitis Trade spokeswoman. "We are going to start a heavy advertising campaign emphasising its benefits for kids and pregnant women, the fact that it has lots of vitamins and no chemicals. Whatever we do, we are going to emphasise that it is a Slovak product."
"It's like the Americans say," agreed Ševčík. "A beautiful beginning, a great middle and a fantastic finish - that's Vinea."More from Business
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