(Economist) - THE region around Diyarbakir, in Turkey’s conservative south-east, has a long but faded tradition of wine production. “Suleiman”, an amateur oenologist from the city, dreams of reviving it. His biggest obstacle is not the renewed clashes between security forces and Kurdish insurgents, which are battering the region’s economy; nor even the conservatism of its Muslim majority. It is red tape. “The bureaucracy and the laws are the hardest to live with,” he says, preferring not to give his real name for fear of being denied his alcohol licence. 

Turkey, a secular but mainly Muslim country of 75m people, is not a nation of big drinkers. At an average of 1.6 litres a year, consumption per head (excluding bootleg booze) is the second-lowest among the 40 member and partner countries of the OECD. Among these, the only drier place is Indonesia, another secular but Muslim-majority country.

In keeping with its Islamist roots, Turkey’s ruling Justice and Development Party (AKP) has been doing its best to keep it that way. The party’s leader, President Recep Tayyip Erdogan, urges Turks to stop drinking or at least do so only at home. Yesilay (Green Crescent), a temperance movement founded in 1920, cheers him on. Big tax rises since 2004 have more than trebled in real terms the price of raki, an anise-flavoured spirit that was the preferred tipple of Kemal Ataturk, the nation’s founding father. Sales of bootleg alcohol, some of it deadly, are rising. According to the OECD, perhaps 29% of the booze consumed in Turkey is sold illegally.

The tax rises on wine have not been so drastic, but winemakers are suffering from the same strong curbs on marketing as other producers of alcohol. A law pushed through by the AKP in 2013 prohibits any sort of promotion of alcohol, including ads, sponsorship deals, product placement or even wine tastings. “If someone comes to your vineyard, you can’t offer him a glass, because it’s against the law,” says Selim Zafer Ellialti, the boss of Suvla, a winery in the Gallipoli peninsula. “For new wines, it’s almost impossible to create an awareness around your brand.”

As a result, a wine industry that had seemed on the verge of a breakthrough is now plateauing. Production, having more than doubled between 2006 and 2010 to 58m litres, has since stalled, as has domestic consumption. Some firms have given up on winemaking, turning instead to grape juice. Turkey is the world’s sixth-biggest producer of grapes, ahead of Chile and Argentina. Only about 3% of them are used to make wine.

The good news for Turkish wines is that quality has improved markedly in the past decade. Producers, having invested in new technology and outside consultants, have begun to win awards in international competitions. Upstarts have prised a share of the market from the country’s five leading winemakers. “The new boutique companies have pushed the big ones to make better wine,” says Sabiha Apaydin, a sommelier at one of Istanbul’s leading restaurants.

Reined in at home, wine companies are seeking a bigger share of foreign markets. About 30 of them have locked arms as Wines of Turkey, a group that promotes exports. Having slipped from about 3m litres in 2004 to 2.2m litres in 2010, the country’s wine exports revived to 2.6m litres in 2014. Although the government has banned all marketing to domestic customers, it subsidises the promotion of wine to foreigners. The top destinations for Turkish wine include Belgium, Germany and Britain, each of which has sizeable Turkish minorities and numerous Turkish restaurants. Gozdem Gurbuzatik of Kayra, another wine producer, sees big opportunities in America and China too.