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Spain's wine business: Bringing a silver lining to aging gracefully

By Al Goodman, CNN
November 28, 2013 -- Updated 1725 GMT (0125 HKT)
  • Alvaro Palacios gained international fame for two red wines, Finca Dofi, about $100 a bottle, and L'Ermita, about $1,000 a bottle
  • Palacios has built a $16-million business in three Spanish wine regions Rioja, Priorat and Bierzo
  • Most of Palacios' wine from these three appellations costs $18 a bottle or less

(CNN) -- I first met Alvaro Palacios in 1989 when I was freelancing for the Wine Spectator magazine. That job required me to visit dozens of wineries, and I was even obligated to taste wine.

Palacios, a fifth-generation Spanish vintner, understood these hardships.

As he drove me around his family's operation in the Rioja winemaking appellation back then, he kept talking about the search for special vineyards in the mountains of northeastern Catalonia.

He insisted that an old, forgotten region there could produce the next great Spanish wines.

Since then, Palacios has gained international fame for two red wines, Finca Dofi, which costs about $100 a bottle, and L'Ermita, which costs about $1,000 a bottle.

He makes them in that appellation he was searching for, called Priorat, a two hour-drive southwest of Barcelona. I recently decided it was time to for CNN to pay a visit.

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We arrived to the hillside village of Gratallops at dusk and checked into what could be described as a wine-obsessed hotel, Cal Llop, run by a wine-loving couple who left Madrid years ago to pursue a new life.

Make the best product possible because the consumer is very smart, very clever
Alvaro Palacios, Spanish winemaker

My room looked out at the L'Ermita vineyard and my cameraman's room overlooked Alvaro Palacios's winery. The dinner was all about wine, although I recall that the food also was good.

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The next morning, we were deep inside Palacios' wine cellar, with hundreds of French oak barrels. In just one extra large cask, the entire 2012 vintage of L'Ermita was aging.

"The real queen, absolutely," Palacios said, gently stroking the cask. Upstairs, we were soon tasting it.

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"See the perfume. It's so delicate," Palacios explained, large wine glass in hand.

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Delicate but very distinguished, as is the price, about a thousand dollars a bottle. "Who matters what the price is?" Palacios said.

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"Is this going to solve Spain's economic crisis, this wine?" I asked. "Well, that would be a nice help," he said.

Palacios looked to markets abroad 20 years ago, long before the crisis struck at home. And he said others in Spain need to do the same.

"I tell my friends to tell his sons, his relatives, that they must get internationalized because the future is so global, everything happens so fast," Palacios said.

Palacios has built a $16 million business in three Spanish wine regions: Rioja, where his family started; Priorat, where he made his own mark, and more recently in Bierzo, in northwest Spain, an old vineyard region that has also gained new fame, working closely with his nephew.

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I tell my friends to tell his sons, his relatives, that they must get internationalized because the future is so global
Alvaro Palacios, Spanish winemaker

Most of Palacios' wine from these three appellations costs $18 a bottle or less. But that's the point -- he's producing the marquee vintages and the wine that's accessible to regular consumers.

"You have to make the best product possible because the consumer is very smart, very clever," he said. "So, great quality and then export. You have to also sell in your country. It's both things, together."

He isn't afraid to take an unusual path. He uses mules to plow prime vineyards on hills too steep for tractors. And he doesn't have a website for the business.

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"I don't need a website to drink the best wines of the world," he said. "I know where they are, or I just ask."

And Palacios thinks there is a silver lining in Spain's long economic crisis.

"I think that this crisis is making young generations, new generations, understand the that the concept is to guarantee a market in the international trade," he said.

After all these years, catching up with Palacios was comforting confirmation that he and I are not aging too badly, although his wines are surely doing better at that.

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