NOVY SVET, CRIMEA – The Crimean peninsula meets the Black Sea violently here, in swooping cliffs and churning waves. The ground, gritty khaki-colored rock, is natural home to lizards and the thorn bushes under which they hide during daylight hours.
In August at high noon, human inhabitants of this little seaside village take cover as well, chased into the shade by an unyielding subtropical sun.
Fortunately, Novy Svet's citizens have their very own world-class champagne to drink while they wait for evening.
'We sell our champagne internationally … we win prizes at international competitions,' said Viktor Zadorozhny, director of Novy Svet Champagne Factory.
'It's all a matter of taste, of course, but in my opinion our champagne is as good as anybody's.'
Customers back up Zadorozhny's words. One third of Novy Svet's output sold overseas in 1999; its champagne is generally considered the top product in the Ukrainian market.
But then, not every Ukrainian state-owned enterprise was founded by a Russian prince.
The story begins in 1876 when Prince Lev Golytsyn, an aristocrat so blue-blooded his ancient relatives had made and broken Tsars, decided to go into champagne manufacturing.
Golytsyn's logic – they didn't have business plans or spreadsheets back then – was simple. Russia's nobility drank champagne by the shipload. Bubbly came only from France, at a massive mark-up. The north Black Sea BUBBLY, coast had produced grapes and wine for five millennia. Ergo, Crimean champagne should be profitable.
There was a tricky manufacturing process to master, of course. Champagne grapes have to be the right mix and quality. Yeast and sugar percentages must be correct for each batch. The wine must ferment, bottled, for three years at controlled temperatures.
Lots of labor was also needed. While fermenting, the bottled champagne must be turned over biannually to settle out sediment. The bottles must also be uncorked, the fermenting wine filtered, and then the bottles re-corked. Other workers had to hack storage tunnels – today there are 24 kilometers' worth – into the hard Crimean hills.
Peasants – Golytsyn's property like everything else in Novy Svet — did all that.
Well-managed and graced with decidedly cheap labor, the business prospered. By the turn of the century Novy Svet was the largest of the Russian Empire's four (two more in Ukraine, one in the Caucasus) champagne factories.
Classic good Russian champagne is, essentially, the old Novy Svet product.
'Traditionally our champagne has a light, slightly sweet taste, a bit piquant and with a somewhat spicy aroma,' said Olga Atamanova, factory marketing manager.
'The aftertaste of our semi-dry has been said by some to be reminiscent of sunflowers, while the brut has been said to remind one of a grape flower.'
Novy Svet won its first international prizes in 1889. The most recent was in 1997.
When Red commissars took over Novy Svet management in 1917, it turned out the Bolsheviks liked champagne as well.
Zadorozhny's office walls are plastered with decades of photos of important Soviets and their best friends beaming over a sparkling glass of Novy Svet bubbly: cosmonauts, Olympic athletes, party bosses, and their periodic Capitalist allies.
'When Truman and Churchill came to Yalta,' he said. 'They drank our champagne. By the case.'
But it was Western hard currency that made Novy Svet champagne, not very originally named 'Sovetskoe Shampanskoe,' the success it is today.
In 1977 Moscow was hunting for hard currency. The factory became the Soviet Union's official champagne exporter, and a Frankfurt-based trading company called Simex was chosen as the sole distributor for continental Europe.
Moscow was cut out of the loop in 1991 when Ukraine became independent. Today, Simex buys roughly a third of Novy Svet's 1.1 million-bottle annual output directly for European resale.
Zadorozhny declined to give company income figures, but the numbers he uses makes it clear margins are good.
Novy Svet's boss estimates his per-bottle cost at Hr 10 [$2.50]. His employees told the Post actual cost is closer to Hr 6 [$1.50].
The German market forks over DM 25 [$13.80] per bottle of Novy Svet champagne. Ukrainians cough up between Hr 12 and Hr 16 [$3 to $4], but have to settle for a plastic cork.
Zadorozhny considers his operation comparable to a medium-sized French champagne factory. He did not contradict a Post estimate of yearly gross income between $4 and $5 million.
The factory employs some 300. Workers polled said they received salaries on time, as well as travel and day-care benefits.
'This is one of the best places in Crimea to work,' said Maria Krivokhizhina, a bottling-line technician.
Maybe not forever. Local wine factories and European sparkling-wines importers are competing hard for a piece of Ukraine's bubbly market, some 55 to 60 million bottles annually, according to government statistics provided by Novy Svet. Zadorozhny estimates his factory accounts for 2 percent.
A bottle of Spumante or Odesskoe Shampanskoe – one year from vine to store shelf – retails in Ukraine for Hr 6 to 8, half Novy Svet's price.
Solution: a cheap sticky-sweet one-year champagne, called 'Paradise', added to the Novy Svet product line in 1995.
Overseas markets, the other solution, carry their own subtleties.
'Working with foreigners is not easy,' said Aleksander Kruchkov, the factory's commercial director.
Kruchkov has been negotiating with a U.S. importer to deliver Novy Svet champagne to the Western Hemisphere for nearly two years. Dickering on the price with a Florida importer absorbed 12 months; deciding who would be responsible for returning bad product another six.
'American law for champagne is different from German law,' said Kruchkov. 'I had no idea. I've had to learn.'
Negotiations are now stuck on volumes. This year's dry Crimean summer spells a poor grape harvest, meaning quantities of top-end bunches will be limited.
'The champagne will sell in America, but we have to get it to market in consistent quantities,' said the U.S. importer, who asked not to be named. 'Right now the deal is in a holding pattern.'
'I will sell to Latin America,' Zadorozhny said. 'The Americans are too difficult.'
Novy Svet's executives can afford to pick and choose their customers. The factory cranks out a high-end product for which there is a stable, overseas demand. The word for the future? Effervescence, of course.
'It took a huge amount of work,' said Zadorozhny. 'But today we make our traditional champagne, and thank Heavens we have a market.'
