Society

Whisky: A popular cheer in down times

by Paul Cochrane
written by Paul Cochrane

Amid the current economic recession, there has been a general downward shift from luxury spirits to medium-priced bottles, while most distributors have put the launch of new brands on hold. With competition getting tougher, brands are working on revamping their image to appeal to the high-end drinker, while distributors are still paying eye-watering sums to get exclusive rights at the capital’s premier nightspots.

“The market always strives to go upwards, but it has been a difficult year globally and in the Middle East, and it is maybe not the right time to introduce new brands,” said Wadih Riachi, cellar manager at Vintage in downtown Beirut. “Yet the drinks sector has not reached a critical mass in Lebanon, by far, in terms of new products, spirits and packaging.”

The spirits segment has developed over the past few years, evident in the rise in premium vodkas, gins, brandies, rums and tequilas on offer. Vodka sales grew by up to 4 percent over the past year, above the120, 000 cases benchmark, but Lebanon is still very much a whisky market, with more than 450,000 cases imported every year.

It is in whiskies that there has been a maturing of the segment, with tipplers increasingly opting for single malts instead of reaching for the ubiquitous Johnny Walker Black Label. “Knowledge about single malts really started last year; we’re on the right track,” said Paul Atallah, wine and bar manager at Le Gray Hotel. “I think single malts will boom, and it is a great match with cigars,” he added.

Currently, imported fine and single malt whiskies average more than 8,000 cases per year, far more than cognac, at around 1,000 cases. Of those 8,000 cases, an estimated 70 percent are the 12 and 15-year-old single malts.

To differentiate the malts from the mass whisky market, companies are working on packaging. For instance, Glenfiddich, the biggest selling single malt label in the world, realized that the packaging for its 21and 30-year-old malts being the same as the significantly cheaper 12 and 15-year-old malts was detrimental to sales.

To make these older and super premium malts stand out,  Glenfiddich got rid of the cardboard tubes in favor of wooden boxes, first for the 30-year malt and later this year for the 21-year. There has been a corresponding 15 to 20 percent rise in the price, but the brand is banking on the improved aesthetic appeal.

The bottle has also changed, along with specific numbering on the labels, which has an appeal to collectors. “Some people want special numbers, such as one customer asking for the ‘600’, for example,” said Vintage’s Riachi.

Glenfiddich’s re-packaging seems to have worked. Vintage typically sold one to two bottles of the 30-year malt a month, but after the makeover they sold two cases in three days. “They got it right,” said Riachi.

Outlets are also emphasizing the range of whiskies a distillery offers. “People like collecting whisky in the same way as wine; instead of a 2001 or 2003 vintage it is a 12, 15, 17, 21 or 30-year-old malt. You drink less but better. And that is the magic of spirits; wine is drunk immediately [after opening], but spirits keep for ages,” added Riachi. 

Rising from the snow

Rare malts and varieties from specific years are also proving attractive.

“Scarcity is the best salesman of wine or spirits,” said Riachi. The Camus 1971 Armagnac, for instance, is likely to sell well this year as a lot of people will be turning 40. And in terms of a unique drinking experience, one of the most sought after this year by whisky connoisseurs is Glenfiddich’s Snow Phoenix.

The Snow Phoenix is a one-off combination of single malts that came about following  heavy snowfall at Glenfiddich’s distillery in the  Scottish Highlands in January 2010 that caused some warehouse roofs to collapse. With casks exposed to sub-zero conditions, the master distiller decided to bring together the whiskies from ex-bourbon and Oloroso casks that had aged for 13 to 30 years into a non-aged single malt. It is now being hailed as a cult malt; some websites selling the Snow Phoenix have already sold out, while in Lebanon only 250 bottles are to be available for sale and half have already been pre-ordered ahead of the July launch. 

The region’s window display

With the summer season not expected to be as dynamic as in years past due to a dearth of tourists, and Ramadan falling in August, drinks sales are expected to be down. But Lebanon still remains a top venue for marketing spirits, from the low to the premium level.

“Lebanon has become a Club Med destination, with two seasons, and the rest of the year having to survive on the Lebanese,” said Carlo Vincenti of Vincenti & Sons, distributor of St. James, Label 5, Glen Moray and Pitu Cachaca. “Lebanon is a window display for the whole region, as a big percentage of the profits from spirits sales in the United Arab Emirates and Saudi Arabia is spent on marketing in Lebanon.” Surprising though it may seem, Saudi Arabia is unofficially the fifth largest whisky market in the world.

Marketing is evident at Beirut’s infamous Sky Bar, where distributors have been spending ever-increasing sums over the past three years to target trendsetters. This year, according to distributors, some $630,000 was spent by Diageo for exclusive rights to sell its brands and by distributor Etablissements Antoine Massoud to plug its Russian Standard vodka at the rooftop bar.

“It is ridiculous, but more outlets are asking for money in advance to exclusively sell alcohol brands, despite the downturn,” said Nagi Hmouda, business manager at Fattal, distributor of Dewar’s, Grey Goose and Patron. “We are skeptical about the season as a lot of losses will be incurred.”

Fattal will not be introducing any new brands this year. Vincenti has launched the premium cognac Bisquit, but is focusing on faster moving spirits such as cachaca — the fastest growing spirits category in the world — rum and vodka.

Yet Vincenti also expects the upward swing in vodka to tail off. “Vodka was a discovery drink and many new brands were introduced to the market, but I think people will shift back to something less neutral in terms of taste, to whisky, rum and tequila, which are taking off.”

With sales down in on-trade — at bars, restaurants and hotels — the less glamorous supermarket has become an important point of sale. Indeed, supermarkets are now charging higher listing fees and investments to display brands.

“High-end brands are on supermarket shelves, but in terms of shelf off-take it is very weak,” said Vincenti. “Such brands shouldn’t be there as the consumers are not the type of people that go to supermarkets. There is a question mark on prestige if a bottle is on a supermarket shelf for months.” The supermarket as a high-end spirit venue may constrain the launching of new products and curb rise in consumption of single malts.

“Demand for single malts has risen over the last two years but I’m not sure it can go on. If on-trade doesn’t evolve, launching luxury spirits will not succeed. You can’t launch a 16-year old whisky in a supermarket, and you can’t sell more than one case per month,” said Vincenti.“But the downturn is not necessarily a bad thing. Lebanon was living in an imaginary world, as you never saw anyone in Europe paying $400 for a bottle in a club. It wasn’t healthy.”

 

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Economics & Policy

Executive Insight – Paul Naimeh

by Paul Naimeh
written by Paul Naimeh

When the tourism minister starts talking about how we should change the country’s strategy from attracting “land” tourists to “air” tourists you know that the industry, which props up around one-third of our economy, is anything but buoyant. 

Obviously, those who travel over land (as many coming from Jordan, Kuwait and Saudi Arabia do) will be put off by the prospect of driving by a Syrian rebellion on their way to a relaxing vacation on a Lebanese beach or mountain resort.

And because we don’t know how long the Syrian uprising will last, this year may just be the best time to stop resting on one’s laurels and chart a new course for investment in the industry, just like all those tourists who will be leaving their cars at home this year.

The alternative is to indirectly put over half a million jobs at risk as the sector also plays the role of a catalyst for construction and manufacturing and economic growth as a whole.

Last year, capital investment in the sector was estimated at $455 million, accounting for 12 percent of overall investments. According to ANIMA Investment Network, capital investment for travel and tourism is expected to reach $714.8 million, or 11.8 percent of estimated overall investments in 2016.

Golden days are gone

But gone are the days when Lebanon posted the highest growth rate in tourists arrivals in the world (39 percent in 2009). The current social, economic and political circumstances provide an entirely different reality.

This year tourism numbers have already fallen 18.6 percent. Hotel occupancy in Beirut fell by 20 percent in the first five months of the year, putting it near the top of the loser’s club among capital cities that have been rocked by revolutions, such as Cairo (-42 percent) and Manama (-44percent).

As bleak as all the above looks, the Lebanese investors, notorious for their resiliency and entrepreneurship, still move forward, spending millions this year in an industry that could come to a grinding halt.

From the perspective of the foreign investment experts, investing in Lebanon today would equal lunacy. However, as Lebanese, we think we know how the tides of change sweep across an economy and that those who hesitate and sit on the sidelines miss out on the profits reaped by the brave.

War, lack of government, assassinations, economic stagnation and fear have not been able to blow out the light of our determination to play by the rules that we create and only we understand.

This is the underlying truth of our culture and the promise every Lebanese citizen makes to the investor that chooses to launch a new touristic project in Lebanon.

Unfortunately, the speed at which investments must be made, and profits collected in this sector, have left us counting the change. 

Business in this industry has an average lifespan of two to three years and the effect of rising inflation, not the underlying fundamentals that would have any investor heading for the hills, are what we have to fear most at this point. A government without an inflation policy, coupled with an economy controlled by oligopolies, means prices go up and quality goes down.

Hence an industry which used to be showered with praises for its memorable service in the past has now begun to lose its shine and is sending heavy spending visitors to other areas of the world where they receive more ‘bang’ for their buck.

At this point, as investors in this sector, the question is not what to invest in and when to do it that plagues our minds, but rather “why” and “how effectively”.

Attracting scores of visitors is great; getting them to spend happily is another story. It is time for business managers and investors alike in this sector to choose the right “why” and capitalize on the “how effectively”; otherwise we will again fall in the trap of being held back by alack of government policy. We have learned to live with that in the past, but this time it may just be the difference between the black and the red.

PAUL NAIMEH is founder of Enologia, Route 69 and El Rancho

 

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Society

A prime selection from Lebanon’s vineyards

by Michael Karam
written by Michael Karam

Michael Karam, award winning author of Wines of Lebanon and Michael Karam’s Lebanese Wines 2011: A Comprehensive Guide, and associate editor-in-chief for executive, selects his favorite full-bodied Lebanese wines.

Note: These wines are not for what people like to call easy drinking. They can be drunk now but most won’t have reached their best for at least seven to 10 years after vintage if allowed to age properly. Aging allows the tannins to soften and give a silky structure to ‘carry’ the fruit and spices which the wines have in abundance. They should also be decanted at least three hours before serving. This gives them time to settle and breathe.

Château Belle-Vue 2006

A blend of Cabernet Franc, Syrah, Cabernet Sauvignon and Merlot. The wine has a reddish purple hue with notes of bell peppers, leather and stewed fruit, with a whiff of pork sausage. In the mouth, there is a lovely velvet texture with notes of plums and hints of cloves, leading to an outstanding finish. The winery makes only 18,000 bottles so these are not that easy to find.

 

Château Kefraya

Comte de M 2007

This behemoth of a wine is made from Cabernet Sauvignon and Syrah. It has a deep cherry hue with aromas of black pepper and thyme on the nose. In the mouth it has a wonderfully elegant structure and a smooth finish. One of Lebanon’s most famous reds, and deservedly so. 

Château Ksara

Le Souverain 2006

Made from Cabernet Sauvignon and the little-known Arinarnoa, it has a deep cherry hue with bell pepper and hints of figs on the nose. The Arinarnoa gives wonderful flavors of cassis and cured meats. Texture is silky, while the finish is dry and powerful.

 

Château Marsyas 2007

A blend of Cabernet Sauvignon, Syrah, Merlot and Petit Verdot. The color is a deep cherry hue. The nose is fruity if slightly toasted, but in the mouth this sumptuous wine is balanced with a superb tannic spine dressed in a cornucopia of ripe forest fruits. A newcomer to watch.

 

Château Musar 2003

A world famous wine made from Cinsault, Carignan and Cabernet Sauvignon. All vintages are aged for seven years before release. The 2003 tends have a deep garnet hue and aromas of oranges and cinnamon with hints of berry fruits. In the mouth, there is a heady combination of peppers and fruits with hints of chocolate. 

 

Château St Thomas 2006

A gentle giant made with Cabernet Sauvignon, Syrah and Merlot. It has an intense dark cherry hue. It is redolent of strawberries and cinnamon. The texture is soft and warm and the tannins are integrated to give a wonderfully balanced drinking experience. Older vintages age wonderfully.

 

Domaine de Baal 2007

Wine from a micro-winery (only 12,000 bottles are produced each year) in Zahle made from Cabernet Sauvignon, Merlot and Syrah. The color is dark purple and the aromas give off notes of black fruits with hints of soft peppers and licorice. In the mouth there are further flavors of black currants, cloves and cured meats. The finish is powerful.

Domaine des Tourelles

Syrah du Liban 2006

With a deep cherry hue it has pepper, eucalyptus and roast coffee beans in the nose. Possessing a robust texture with nicely integrated tannins, there is a lot of fruit on the middle palate and the finish is powerful and sustained. Good aging potential but ready to drink now. It won many plaudits at the recent London wine fair.

 

Domaine Wardy

Private Selection 2004

This elegant and suave wine is made with Syrah, Merlot and Cabernet Sauvignon. It has a dark ruby hue and an intensely smoky nose. Balanced in the mouth with a fruity finish. Good aging potential with well-integrated soft and velvety tannins.

 

Ixsir

Grande Reserve 2008

Ixsir is based in Batroun but has vineyards across Lebanon. Its top red is made with Syrah and Cabernet Sauvignon. It has a deep purple hue and a menthol nose with hints of black pepper. Forest fruits on the mouth herald a sustained finish that brings out the spices.

 

Karam Winery

Saint John 2004

South Lebanon’s only producer (and no relation to the author). This gloriously playful red is made with Cabernet Sauvignon, Merlot and Syrah. It has a black cherry hue with a nose of chocolate, peppers and other spices. In the mouth, the tannins have developed well and in no way obscure the abundance of fruits that dance around the mouth. The finish is sustained and memorable.

 

Massaya

Reserve 2006

Massaya’s senior red is made from Cabernet Sauvignon, Mourvedre and Syrah. It has an intense cherry hue and a complex nose of green peppers, cloves and cedar. On the palate the texture is velvety and elegant.The tannins appear gradually and the finish is smooth and underpinned with fruit.

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Lebanon’s subjective truths

by Nicholas Blanford
written by Nicholas Blanford

The recent bomb attack against the United Nations Interim Force in Lebanon (UNIFIL) and the outbreak of sectarian violence in Tripoli came as no surprise. UNIFIL itself was expecting to feel the backlash of the unrest sweeping the region, particularly the violence that is roiling neighboring Syria.

It is an uncomfortable fact of life for the peacekeeping force, with its European-heavy battalions, that it serves as a huge soft target for anyone that wants to send ‘messages’ to the international community at large. Indeed, since UNIFIL was expanded after the 2006 war from 2,000 peacekeepers, drawn mainly from Ghana and India, to more than 11,000 troops and a maritime component, force protection has dominated its agenda. There was a spate of actual and attempted bomb attacks against UNIFIL four years ago, most of them unprofessional and resulting in few casualties. The one exception was a highly-sophisticated bomb attack against the Spanish battalion that killed six peacekeepers, UNIFIL’s highest single day casualty toll since 1978, when it was established.

As usual, the perpetrators and motives of the latest bombing of an Italian UNIFIL convoy near Sidon remain unknown. But UNIFIL is expecting more attacks, especially if the regional situation deteriorates further.

The same applies to that perennial flashpoint between Jabal Mohsen and Bab Tebbaneh in Tripoli. The clashes that broke out on June 17between the Alawite community in Jabal Mohsen and the Sunnis of Bab Tebbaneh and neighboring Qobbe were widely anticipated.

The frontline between the two districts, marked by a string of raggedy bullet-pocked and unpopulated buildings, remains probably the most consistent and volatile flashpoint in Lebanon. There have been several bouts of fighting here over the past six years as Lebanon lurched from one political crisis to another. Who started the June 17 clashes that left six people dead, including a soldier and a 14-year-old boy, depends on whom you ask. The Alawites insist that the Sunnis shot first, while the Sunnis say the Alawites opened fire on a demonstration held to support the Syrian opposition movement.

Rifaat Eid, the convivial head of the Alawite community, accused leading Sunni politicians and clerics in Tripoli of fomenting anti-Alawite sentiment and distributing weapons to be used in street battles. He said that the Sunnis have been provoking the Alawites for months by firing occasional rocket-propelled grenades into Jabal Mohsen. “They want a war and they are preparing for it,” he said.

But wander down the hill into Bab Tebbaneh and you will hear the diametric opposite, with local residents claiming that it is the Alawites who have been firing the RPGs. During an earlier clash in 2008, one could hear Alawite combatants insisting that Saudi jihadists were fighting with their Sunni enemies in Bab Tebbaneh. But the Sunnis would insist with equal vigor that Iranians were taking pot shots at them from the heights of Jabal Mohsen.

There is a weary predictability about the fighting between these two communities, which consistently allow themselves to be exploited as pawns in a broader political struggle.

The formation of a new government after five months of bickering over the allocation of ministerial seats has already increased the levels of political vitriol.

Mouein Merhebi, a Future Movement MP from Akkar, recently accused Hezbollah of deploying 130mm artillery guns in the rugged and remote hills southwest of Hermel, specifically Wadi Fissane, Marjhine and Ayoun Oghosh. The suspicion, of course, is that Hezbollah could use the cannons against the Sunnis of Akkar and Dinnieh. Hezbollah dismissed the claim as fabricated and ridiculous.

Take a drive along the remote trails winding through the ochre-hued hills of Hermel, studded with dark green juniper trees, and no artillery guns are to be seen. If they exist, they are well hidden. Still, talk to Sunnis living on the western side of the mountain ridge that separates Dinnieh from Hermel and you will receive avid assurances that Hezbollah’s artillery guns are pointed at them. But cross over to the eastern side of the ridge and chat to local Shia farmers and the claims are dismissed out of hand.

Like all unproven and politically-charged accusations and counter-claims in Lebanon, truth lies in the eye of the beholder.

Nicholas Blanford is the Beirut-based correspondent for

The Christian Science Monitor and The Times of London

 

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Society

Book review: The End of Modern History

by James Reddick
written by James Reddick

Bernard Lewis’s new collection of essays, “The End of Modern History in the Middle East”, is an often fascinating, sometimes dull and endlessly frustrating continuation of the author’s 50-plus years of scholarly musing on the region. For those unfamiliar with Lewis, he is best known for coining the phrase “clash of civilizations”, which he introduced in a 1990 article in The Atlantic entitled “The Roots of Muslim Rage”. In that piece, Lewis presented his hypothesis that there was a deepening schism between Islam and the West — one founded in an inherent hostility toward Western values on the part of the Muslim world.

The events of 9/11 emboldened such thinking and Lewis’s ideology was espoused by the Bush administration in its hammerhead approach to creating ‘democracy’ in the Middle East (Lewis has criticized the implementation of the invasion of Iraq but has stood by its goals). This approach was largely discredited in the years following the Iraq invasion but it seems that Lewis continues to see the Middle East through the same lens, which pits democracy against fundamentalism in an epic struggle of progress versus regression.

The principal essay, which gives the book its title, is centered around the notion that the Middle East has reached a moment in history when it is free to charter its own course. Rid of the meddling superpowers (an arguable assertion in itself), the time is now to either move into the light —toward democracy, development and peace — or to revert further into the darkness of fundamentalism, autocracy and instability. If it is to move in the direction of the former, three catalysts would lead the way: Turkey, Israel and, most important of all, women.

Lewis asserts that, as the largest economy in the region and the first Muslim country to establish a democracy, Turkey could be the bellwether for development in the Middle East, depending on whether its own parliamentary system can withstand the Islamic leanings of the ruling party.

“It may choose… to turn its back on the West and return to the Middle East,” Lewis writes. “[Or] it may choose… to tighten its ties with the West and turn its back on the Middle East.”

In fact, Turkish Prime Minister Recep Tayyip Erdogan has done well in choosing both, maintaining strong economic and diplomatic ties with its eastern neighbors as well as with Europe, thus rebuking Lewis’s finite divisions between East and West.

Rightly, Lewis sees the Arab-Israeli conflict as the greatest impediment to development in the Middle East, “diverting energies and resources from creative to destructive purposes and preventing the progress of the region toward a new age of advanced technology and political freedom.”

But Lewis’s attitude toward the peace process, and his refusal to lay any blame on Israel, undermines the foundation of his argument. For him, the intransigence of Arab regimes that manipulate the Palestinian cause is the greatest impediment to peace; there is no mention of any stubbornness on the part of the Israelis.

“Dictatorships that rule much of the Middle East today will not…make peace because they need conflict to justify their tyrannical oppression,” he writes. “Real peace will come only with their defeat…and replacement by governments that have been chosen…by their people and that will seek to resolve, not provoke, conflicts.”

Omissions of Israeli accountability stand in stark contrast to Lewis’s strengths; his in-depth and lucid analysis of the linguistic and ethnic make-up of the Middle East’s states and the internal challenges facing each.  It is when he shifts to his trademark epic ideas of good versus evil that his credibility wanes. Take for example this passage from the title essay: “The war against terror and the quest for freedom are inextricably linked, and neither can succeed without the other.”

As any “Bush Doctrine” survivor knows, seductive as it maybe, such language should be met with trepidation.

 

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Society

The new connoisseurs

by Lauren Williams
written by Lauren Williams

 

On a Wednesday evening in downtown Beirut, Wadih Riachi is carefully explaining to an engaged group the fermentation and maceration process that goes into the Joseph Drouhin Beaune Greves Premier 2006 that they will shortly be tasting at this evening’s wine course. The intimate group of around 20 professionals, most in their thirties, consists mainly of regulars at the weekly tasting event; most have developed a sophisticated enough palette to detect the grape and smoky blackcurrant tones of the wine and they can wax lyrical about its vintage. Some even boast of their own private cellars.

Guests to Riachi’s course are part of what the owner of Vintage Cellars in Saifi believes is a growing class of wine connoisseurs. Increasingly sophisticated in their taste and selections, they are driving a move away from spirits and towards high-end wines.

Riachi, who distributes to major restaurants, hotels and bars across the country, says, “wine has been elevated to the status of a luxury product [in Lebanon]”. But with more information and better availability of a vast range of good wines he says, “for wine to be luxury, the product must be flawless.”

“People can now read consumer reports and wine critics and they understand their wines more and more,” he added. That sentiment is echoed by Henri Debbané, owner of Enoteca cellars and alcohol distributors, who says Lebanon’s traditionally consumptive wine culture is increasingly discerning, evident in the mushrooming number of private cellars in homes around the country.

Thirsty market

“Wine is becoming trendy — you find people have cellars now in boutique apartments,” Debbané said. “Drinking good wine is a sign of prestige — more than good spirits even —because of the connoisseurship.” Riachi agrees: “Lebanon until recently has been a purely consumption market; you buy,you drink, which is nice, but we are starting to see more people collecting wine like art.”

 

Wine sales in Lebanon have increased a solid 5 percent for both local and imported wine in the last year.  The market, now valued at close to $6.5 million per year ,according to Debbané, has seen Lebanese increase their consumption from around half a bottle per person annually in 1993, to two bottles per person today. Heargues that the Lebanese are increasingly willing to spend more on a good drop. Rampant Chinese demand for top-of-the-range “brand” Bordeauxs and Burgundys has driven global prices through the roof in recent years. Debbané says he has seen Lebanese connoisseurs increasingly opt for mid to high-end wines in the same category, as taste has developed.

Maturing tastes

“The demand for luxury is growing,” Debbané says. “For the Bordeaux wines especially, prices are going up in a consistent way. Mid-range to high-end is going up 20-25 percent on already high prices, so what you used to drink for $50 you now drink for $200.”

Budgets for high-end wines have remained about the same he said, “so we are varying the range to propose wines in the same category but not necessarily of the same prestigious brands.”

Unlike other luxury products, said Riachi, price has little to do with prestige. “When it comes to luxury we are able to say there is a best in each category,” he said. “Once you develop an accomplished taste for wine, it is difficult to go back. What may have been drinkable yesterday is not drinkable today. That’s what is happening to the market now — they are demanding better wines.”

As co-directors of vineyards Chateau Marsyas in the Bekaa valley and Domain Bargylus in northern Syria, Karim and Sandro Saade have witnessed the same trend. “People around the world are drinking better,” says Karim Saade. “And in Lebanon the prestige culture around wine comes from an increasing awareness of its convivial, cultural and scientific value.” With the Syrian Bargylus red wine selling well at around $28 a bottle, and the white around $17, he says the price reflects the cost of production. 

Michel Khoury of MK Holdings, distributor of Muscato Roseand premium 24-carat gold-plated Luxor Brut, rosé, and vintage from Champagne, came to similar conclusions when selecting his latest product range of Italian Barolos, which he will begin distributing through exclusive partnerships this year. Sales of the exclusive $1,060 to $3,000 Luxor Champagne are slowing, he admits, and while there is a “saturation” of alcohol in the market, “there is always room for a quality, well-priced wine.” The Barolos will retail for between $25 and $50 — a price deemed reasonable given the market’s willingness to spend the same on a quality Bordeaux.

“To tell you that sales of Luxor haven’t decreased would be a lie; even though we deal with the top-end clients, the top 5 percent of the market. Our private clients who used to order a case are ordering a bottle as a luxury gift instead. We used to sell about 150 bottles a year, so far this year we have sold around 35.”

Globally, demand for Champagne has taken a hit, although Debbané says Lebanon’s thirst for the bubbly, like wines, is also developing.

“In Lebanon we are seeing Champagne experience the same changes in consumption as wines; people are starting to see it as a wine that is not just consumed for the celebration of festivities,” he said.

Trouble ahead?

Increasingly discerning as Lebanese wine drinkers or collectors may be, retail alcohol sales are closely linked to tourism which, with political unrest around the region, is set to take a hit.  Expecting this summer’s peak season volume to be half of last year, Debbané says many of his hotel and restaurant clients are preparing for a downturn in wine retail sales.

Meanwhile MK Holdings’ Khoury says he has aborted plans to distribute to beach resorts in the troubled South Lebanon. “I am not going to invest a quarter of a million dollars and pay all the insurance when I have no guarantees — it’s all on hold,” he said.

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Southern Sudan’s baptism in blood

by Maggie Fick
written by Maggie Fick

The people of Southern Sudan ought to be celebrating on July 9 the culmination of their hard-won, long-fought and often extremely violent struggle for autonomy and respect on their own soil. On that day, the oil-rich but development-and-infrastructure-poor south is to break free from the oppressive yoke of Khartoum and officially declare itself as the world’s newest nation: The Republic of Southern Sudan. It ought to be a happy and optimistic time in a region that has had little reason for hope and few moments of sustained peace since Sudan, Africa’s largest country, gained independence in 1956.  

But disturbing developments along Sudan’s contested, militarized and resource-laden north-south border look set to undermine the elation of independence.  Throughout last month, aggressive military actions of the Sudanese Armed Forces (SAF), the northern army, severely undermined internationally-backed negotiations between Juba and Khartoum to forge a peaceful and cooperative relationship between the two Sudans after the country splits. In lieu of level-headed discussions with the Juba government, Khartoum is instead using its army’s superior military strength over its southern “brethren” and southern-aligned civilians living in northern border areas — including the Southern Kordofan state and the strategic zone of Abyei, which both governments claim.  

Chilling accounts are emerging from Southern Kordofan, home to the Nuba people, who practice several religions and allied themselves with the southern guerillas during the north-south civil war. The black African Nuba are northerners, and the Arab-led Khartoum government headed by President Omar al-Bashir — wanted by the International Criminal Court for atrocities committed in Sudan’s western Darfur region — has brutally lashed out against them in recent weeks, stirring local church leaders, international activists and diplomats alike to fear a repeat of the genocide perpetrated against the Nubas in the 1990s while the civil war raged. With restricted humanitarian access caused by insecurity and the government’s blocking of media access to the region in recent weeks, the impact of the SAF’s aerial bombing of civilian areas in Southern Kordofan is difficult to verify. But the United Nations said at the end of June that at least 73,000 people had fled their homes since fighting erupted between northern and southern forces in the state’s capital Kadugli on June 6. 

After winning praise earlier for accepting the near-unanimous results of the south’s independence vote held in January, President Bashir now appears to be attempting to undermine southern secession by tearing the north-south border asunder, a strategy that provides his government with the added advantage of a destabilizing “spillover effect” for the south.  Sporadic violence continues to dog the former southern guerilla movement — turned soon-to-be-national army, known as the Sudan People’s Liberation Army (SPLA) —as it confronts a range of rebel movements aiming to overthrow the southern government. The SPLA’s recent campaigns against these rebel movements have raised human rights concerns abroad — especially given the substantial Western support for the army — after civilian deaths in many oil-producing southern areas further stoked the south’s internal grievances.

The southern government blames Khartoum for backing these rebel militias, which is certainly possible, though hard evidence to support these claims is, again, difficult to come by. Rebels fighting the SPLA take issue with how it is governing, citing problems of ethnic exclusion and corruption in the soon-to-be-born state, and some of these complaints are merited. Building a state is a monumental task by any standard, not to mention creating a nation out of the scores of local tribes and sub-groups in the Afghanistan-sized south. If the Khartoum government’s deadly games in Southern Kordofan persist, July 9 will not be a day for celebration, especially given the plight facing the Nuba. The south will still likely get its freedom, though, and be saddled with the new challenges it will bring.

A saying I’ve often heard repeated by southerners in discussing successive regimes in Khartoum is a quote from former Vice President Abel Alier: “Too many disagreements dishonored.” The broken promises of Khartoum at the eleventh hour of a painstaking and years-long north-south peace process are a bitter but fitting note with which to mark the division of Sudan.

 

MAGGIE FICK is a freelance journalist based in Southern Sudan writing for the Associated Press, Foreign Policy and the Christian Science Monitor 

 

 

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Society

Discerning desires seek perfection

by Lauren Williams
written by Lauren Williams

To say that money can’t buy taste is a truism with particular relevance in today’s luxury markets as they rebound from the global recession. Ostentatious spending is out, replaced with wise and cautious consumption that has translated into the development of sophisticated and refined tastes. That’s not to say that people aren’t spending.

Globally and in Lebanon, luxury is now more than ever about passion markets. Demand for cars, wines, watches, jewelry and art are being driven by a feel for offbeat designs, one-off collectables and vintage items requiring a discerning eye and valuation literacy. Aesthetics and the emotional appeal of luxury goods with no expiry date are the important indicators of investment value.

Nowhere is this more evident than in the growing market for art in Lebanon. Cash-laden and educated new collectors are venturing into the market. After initial market overzealousness for Iranian art, these cautious investors are propelling the market for Middle Eastern arts at a healthy rate.

In Lebanon, wine sales are up as a traditional consumer culture makes way for a growing class of connoisseurs and cellar-owners. In homes and restaurants, the focus is on creating the unique memory and one-off experience. Jewelry and watch aficionados, meanwhile, have not been put off by the high prices of gold and gems, but are increasingly demanding individualized, custom-made pieces. Designers and watchmakers are responding with limited edition collections, one-off collaborations and narrative-oriented design. Class is manifest in understated and retro design. It is this penchant for rarities that is putting ‘exquisite’ back in to the meaning of luxury.

In this special luxury report, Executive shows how people are spending, and on what. We show you what are the trends, what is around the corner, and we take an analytical look at the cultural market drivers for luxury goods. Importantly, we take a sober look at the markets in this volatile recovery period.

From cars, boating, jewelry, watches, fashion, homes and interiors, wine, spirits and even food, we welcome Lebanon to a new era of refinement. 

 

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Society

Yachts: Leap of faith

by Zak Brophy
written by Zak Brophy

Few displays of the luxurious lifestyle turn heads quite like a top-of-the range boat, and it is the colossal mega yachts that tend to elicit the most attention. These floating mansions can come custom furnished with swimming pools, helipads, indoor gyms and even mini submarines. But is size everything?

For Alain Maaraoui, founder and chief executive officer of Sea Pros Yachts, it is quality and not size that defines luxury. “We have boats that are 8 meters and cost over 280,000 Euros [$396,000]. It’s not a matter of size; it’s a matter of real luxury,” he said.

The Lebanese market is an important hub in the luxury boat trade, but as the 2011 season gets underway it is having to navigate some choppy waters. Political upheavals at home and across the region, slowing growth in the economy and a sluggish start to the tourist season don’t augur well for the coming year.

Showboating

At the end of May, IFP Expo and Messe Dusseldorf hosted the Lebanese maritime trade show, Beirut Boat 2011. Representatives from the top 20 international brands were among the 130 exhibitors who came to show off their wares. Many of the 28,000 visitors to the event at Joseph Khoury Marina in Dbayeh would have come purely to marvel at the opulent grandeur of the mega yachts or to appreciate the finesse of the classic brands. But it was the deals sealed with the serious shoppers that set the tone for the coming year’s business.

Overall, the event proved to be a success despite the prevailing climate, according to Joelle Ghannam, IFP Expo project manager. “More than $100 million in sales were made during the event. There are still big spenders. A $12 million boat was sold on the first day,” she said.

The interest shown in the large boats meant good business for Sea Pros’ Maaraoui. “We were surprised to receive high demand during the show for our mega yachts,” he said.

While the majority of the clientele were Lebanese, 12 percent of the guests came from the Gulf. Ghannam believes it is more than just the liberal lifestyle in Lebanon that attracts buyers from the Gulf. “Many of them prefer to moor in Lebanon. They have more months in which they can sail. It is too hot in the Gulf,” she said. Despite the relative success of the boat fair there is still some trepidation in the market.

“Business is not like last year. We are selling less. But you have to consider what is happening around us,” said Firas Khalife from BluePoint Yachting Lebanon.

Alain Maaraoui explained that the financial crisis had negatively affected trade with Europe. “Nowadays, even in Europe it’s much harder to finance a boat because of the global financial crisis,” he said. “The banks are placing many more restrictions.”

Blue Point Yachting sells solely to a Lebanese clientele and Khalife doesn’t see access to finance as a real impediment to business. “There is no problem with finance in Lebanon. There is plenty of money in the banks. If you fit the banks’ criteria it’s no problem,” he said.

For those seafaring folk who don’t want, or can’t afford, to spend millions on their own floating palace there is always the option of chartering. However, some charter companies have complained of a leaden start to the season.

“There are some problems because of the political situation. So far we have not had a single charter for one of our big boats,” said Randal-Haj of Dolphin Team Yachting. “We are in June and the charters normally start in May, or even earlier.” The vitality of the charter market is closely linked to the influx of tourists. According to the Ministry of Tourism, arrivals in the first quarter of 2011 were down 13 percent compared to the first quarter of 2010.

Hrair Tasslakian, part owner of Dbayeh fishing club, said this year’s business has been coming from locals and Lebanese returning from abroad. “As for the big spenders who come from the Gulf or Europe we haven’t seen them yet. We haven’t seen people that come and spend $10,000 dollars in a day,” he said.

Missing marinas

Many of the players in the industry are concerned that there is a lack of marina development in Lebanon. “The mooring space is almost non-existent now. This is a problem for boat sales, definitely. By next year there will probably be no space at all,” fretted Firas Khalife.

This is particularly a problem for large boats, a market that several agents are hoping to develop in Lebanon. “Now Lebanon is only a market for smaller boats, 50 to 80- footers [15 meters to 24 meters]. Anything more than 90 [27 meters] and it’s much tighter, but it’s growing. In two years Lebanon will have more 100 footers [30 meters] and plus,” said Jimmy Frangi, chief executive officer of Sovereign Sea Hermes.

There was a similar problem of inadequate marina space in the 1990s before the construction of the Joseph Khoury Marina in Dbayeh and Solidere Marina in Beirut.

A new complex in Jiyeh with a capacity for 90 yachts is also slated for completion this month.

Where yachters do find a mooring, they seek comfort, class and style onshore once the boarding ramps are lowered on to terra firma. In a bid to boost the appeal of Lebanon as a luxury yachting destination of choice, Beirut Waterfront Development — a joint venture between Solidere and international real estate development firm Stow Capital Partners — is investing somewhere in the region of $150 million to build Zaitunay Bay.

Located on 20,000 square meters of waterfront land by the Beirut Marina it will incorporate a plethora of restaurants and shops, 14,000 square meters of high-end residences and an exclusive yacht club.

The mood remains defiantly buoyant in the Lebanese luxury yacht market but how long it can stave off the encroaching malaise in Lebanon and the wider region remains unclear. BluePoint Yachting’s Khalife warned that “nobody really knows what’s going to happen.”

“You cannot do any long-term planning in the current climate in and around Lebanon,” he said. “We are playing it by ear.”

 

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Yemen’s fleeting chance for change

by Farea al-Muslimi
written by Farea al-Muslimi

The attack on Yemeni President Ali Abdullah Saleh while he and his cabinet were at Friday prayers last month turned Yemen on its head. The days before the attack saw heavy clashes between rival tribes in the capital of Sanaa and civil war seemed inevitable. It became clear that the potential price of overthrowing the regime would be much greater than it had been in Egypt or Tunisia. 

Then came the June 3 ambush, leaving Saleh with burns to 40 percent of his body and injuries to his neck and chest requiring surgery; a dozen members of his cabinet were also heavily injured, some losing limbs. Several days later Saleh and most of his cabinet evacuated to Saudi Arabia, setting the stage for controversy. The youth in the “squares of change” around Yemen took to the streets at midnight to celebrate what was to them the final exit of Saleh’s regime, analogous to that of former Tunisian President Zine el-Abidine Ben Ali.

In many quarters, however, the celebrations were criticized as a glorification of violence and comparable to Saleh’s own savagery. Some were dismayed that the peaceful nature of the youth uprisings had descended into violence. And more importantly, the sanctity of where he was attacked garnered sympathy for the wounded despot; religion is a fundamental building block of the Yemeni DNA, and the timing and location of the attack blighted its outcome. 

The youth in the squares were naturally defensive in response. Saleh’s departure, they said, had been the goal for months and the means should not be questioned, even if it was not they who performed the operation. There were accusations of hypocrisy against those who condemned the attack on Saleh but not the violence Saleh had wrought on peaceful protesters leaving hundreds dead. One Yemeni youth justified the mosque attack by saying he “was going to leave prayer to kill more of us.”

Under the headline, “God’s hand that devastated Al Nahdeen Mosque”, Yemeni journalist Khaled Abdulhadi wrote in Al-Masdar: “The holiness of the mosque is meaningless if murderers were inside it; in fact it was meant by God that they were all inside to be attacked.”

Another casualty of the assault, however, may be Yemeni national reconciliation. In mid-June an unknown group called the “Revenge brigades of Yemen and President Saleh” attacked an opposition newspaper and pledged to assassinate opposition political leaders and Saleh opponents. These incidents raise concerns about the post-Saleh era. Unless a real national dialogue begins, and some sort of consensus emerges, blood will continue to stain Yemen’s headlines for years to come.

Five months of uprisings have made it clear that neither supporters of the regime nor the protest movement can easily impose their will on the other. Saleh’s departure presents an opportunity for the transfer of power, but this requires Yemen’s political actors to reach some form of national accord and opt for development over retribution, the former being crucial in a country where 40 percent of the population lives below the poverty line and the economy has lost some $5 billion since the beginning of the crisis, according to the Yemeni minister of trade and industry. 

Such consensus needs to account for the country’s diversity and include groups from South Yemen (who pose the most serious political issue facing the country), the Houthis (who have lived through six wars in five years), tribal actors, the youth movement and the current ruling party. The Joint Meeting Parties (JMP), the main opposition group in the country, has called for the transition of power to the vice president, followed by the formation of a national unity government assembled by the current ruling party and the JMP. This interim government would then convene a national consensus conference to establish the framework for a cohesive and inclusive ruling body. 

For this to be realized, foreign actors at the fore of the negotiations — such as the Gulf Cooperation Council, European Union and the United States — will also need to pressure the various local actors to partake. Paramount in all this, however, is that the protesters’ principal demand of the last five months is met; that Saleh and the rest of his family be removed from power. 

FAREA AL-MUSLIMI is a Yemeni activist and writer for Al Masdar

 

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