Bright Outlook Port Side

10 January, 2014

Hamish Smith travels to Porto and finds optimism where he was least expecting it

THE PERCEPTION, AT LEAST, is that Portugal is one of the beleaguered states of Europe. It is a nation that couldn’t slow its speed of spending ahead of the big financial crash and became a graveyard of white elephants and ghostly city centres. The newly lain but little-used motorways that stretch arterially – and sometimes arbitrarily – through its rugged landscape seem symbolically to only serve the great exodus.  

It’s surprising then, to see Portugal is port’s only top-five market to be currently showing both volume and value growth. In fact, the latest data from the Instituto dos Vinhos do Douro e Porto (January-September 2013) shows Portugal was up an impressive 7.3% by value for the period. 

So, despite Portugal’s apparent economic weakness, its port sales are fighting fit – and are one of the driving forces of 4.2% total value sales this year. It’s warming to see there are good news stories nestled in the wider gloomy narrative. 

France, with its huge appetite for entry-level tawnies, is the category’s frozen giant. Here, port is a numbers game, with brands jousting over big volumes and small margins. Bottle sales are plugged at a rock-bottom average of €23.57 and volume growth was something talked about before the recession. But in second spot in the value chart for the period is Portugal, where port sells for a respectable €5.02, and where 30% more money was generated for its producers than Holland (traditionally a destination for low-price ruby) and more than half more again of Belgium (another low-price ruby market), the US (ruby, tawny, LBV and vintage) and the UK (ruby, LBV and vintage). 

For some years port producers have been accepting of overall volume decline in favour of value rises. So, for the domestic market to increase output too, even by 2.3%, was impressive. (The keen of eye may note these results do not include Christmas – a key buying time for the category – but looking at 2012’s results, the overall picture is very similar, and there is little to support a view that the trends will change in Q4.)  

So why this renewed optimism in Portugal, and why now? The IVDP’s sales figures discriminate by country, but within that they do not check passports. Tourism is certainly distorting the picture, but to what degree? According to Porto Tourismo, cruise ship passengers have increased 275% to 75,000 in three years and a record six million visitors now pass through Porto airport.  

Low-cost airlines are pilloried for their approach to comfort and service but too little is said for the profound effect they can have on tourism, a city and its industries. 

Indeed there is a feeling in Porto that the spike in tourism is one of the only positives of the recession. With demand for bars and restaurants, optimism in the city is renewed, particularly among Porto’s young, who are now starting to repopulate the city centre. 





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Christian Davis

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