The Spanish grapes of wrath

Its rugged landscape was once a backdrop to George Orwell's Homage to Catalonia, but if the gunsmoke has cleared, there is still bitter fighting in the hills and vineyards outside Barcelona. This time, however, it is mainly confined to the boardroom and the weapons are writs, backed up by expensive lawyers.

Freixenet and Codorniu, the two main producers of cava, the region's sparkling wine, are the sides at war. Between them, they account for 70 per cent of all production - a methode traditionnelle wine, made the same way as champagne, and to stringent and extremely conservative standards.

The wine is prized throughout Spain, and has made strong inroads into export markets. Britain, Germany and the US have all developed a taste for the pale, sparkling drink, best drunk well-chilled. Which is why there are fears the row could spill over into the supermarket aisles, where the drink has found a growing niche as a good-value alternative to champagne.

Codorniu is owned and run by a dynasty proud to trace its roots back to 1551, to Jaime Codorniu. Today the company is controlled by the Raventos clan, which married into the Codornius in 1659. Freixenet, by contrast, is a relative upstart, established a mere 50 years or so ago.

Most cava is produced in the Penedes region just outside Barcelona. Genuine producers are recognised by the Instituto Nacional de Denominaciones de Origen. Cava producers - there are over 200 of them in the region - are fiercely proud of their wine, and especially its success in global markets.

In the last decade, cava has taken the world by storm. In 1989 the region exported 48 million bottles of the stuff - by 1996, that had leapt to 60.7 million bottles, with 12 million going to the US and about six million to the UK. That is out of the total 37 million bottles of sparkling wine drunk here.

Last year, total sales were Pts57bn (pounds 287m). Cava accounts for 12 per cent of Catalonia's gross domestic product. Unsurprisingly, with such economic significance, politicians, regulators, and lawyers have been drawn into the fight between the region's two largest producers. Codorniu says its rival has been cosying up to politicians, supplying free cava to political rallies for the last 20 years.

Rivalry between the two reached a new pitch earlier this year, when they accused each other of disregarding basic aspects of cava production. Rumours had already begun to circulate a few years ago that Freixenet was laying down bottles for less than the stipulated minimum nine months.

It was a shock when inspectors with the Consejo Regulador del Cava - cava's governing body - found out that Freixenet was failing to store its bottles long enough. It was an even bigger shock in the tightly-knit world of cava makers when in June a court found Freixenet guilty as charged. The judge levied a fine of Pts345m on Freixenet for violating industry standards, thought to be the largest fine handed down in Spain to a food or drink producer. Apparently 19 million bottles of cava had been improperly aged - for just four months.

Freixenet appealed, and the company now claims the court has suspended the case. Manuel Duran, deputy chairman of Freixenet and head of international operations, dismisses the court's decision. He says that with the suspension, "it will be years before a final decision is reached. It means the decision is not seen as vital - the judiciary has more important things to do with its time."

The fine, however, has left Codorniu seething. "Certain rules have to be respected," says Xavier Pages, Snr Duran's opposite number. "Some may think consumers don't care, so you just don't need to comply with the rules. That is dangerous for cava." He spells out Codorniu's position. "What we have here is a fraud, and we see fraud as a serious issue."

Codorniu's argument is that all cava producers risk losing out if the value of the brand is undermined by one of its leading producers. But the mud is flung back in the other direction, with interest. In a response to the developments over improper bottling, Freixenet threw a slew of charges back at Codorniu: the company was overwatering its vineyards - a heinous sin, for any right-thinking cava producer; it had illegally used the pinot noir grape; Codorniu's grape yields exceeded the maximum permitted; and that it had imitated a bottle designed by Freixenet and used it for one of its best-selling brands in Spain.

All these charges have been thrown out, with the exception of the bottle. Codorniu denies the accusation - how can you imitate a bottle, it asks? Suffice it to say that the bottle in question - frosted, whiteish opaque glass - is similar in style. Codorniu has now suffered the indignity of a fine, against which it is appealing.

Earlier this month Josep Ferrer, chairman of Freixenet, seemed to be making some moves towards peace. Speaking in New York, he said the two firms should "stop quarrelling and go forward jointly to look for new markets". But Codorniu isn't listening.

If the fight does damage cava sales, it will be exports where the carnage is worst. Marks & Spencer sells three lines of its own-label cava, all bottled by Freixenet. M&S discussed the issue with Freixenet, and said it had been assured that the court case would not affect exports. M&S refused to comment any further, saying the court case was sub judice. But there is plenty at stake if things unravel outside Spain. Buyers and consumers will want to know that the wine they are drinking meets the requirements of its denominacion de origen.

And Freixenet is the major cava supplier into the UK, with sales to most of the supermarkets, either through own-label sales, or its own brand, or the off-licence trade.

This Christmas, we British look likely to guzzle down upwards of pounds 150m of sparkling wine, or about 20 million bottles of fizz. For now, things still look rosy for Freixenet. A spokeswoman for Majestic Wine said: "We sell an awful lot of Freixenet - it's the second-best selling sparkling wine we stock." The reason for its popularity, she explained, was its consistently good quality at a competitive price.

A bottle of Freixenet's Cordon Negro typically sells for around pounds 7 - cheaper than low-end champagnes, which start at just under pounds 10. And as savvy connoisseurs know, a good cava often beats champagne in blind tastings. Caught up in globalisation, and the pressure to capture new markets, both firms have been under pressure to innovate. Freixenet is the upstart rival - where clever marketing has been as much a part of the game plan as the quality of the product.

Codorniu has preferred to stick to premium-priced products, relying on its traditional cachet. This has served it well at home, but it has failed to make the strides in export markets Freixenet has. The result has been a war of words, where both sides seem obsessed by what the other is up to.

John Radford, a wine writer who has followed the on-off conflict, says: "I still can't believe a firm of that size could have committed a crime of that magnitude. There has been bad blood between the two for a long while, and it's not good for cava. They should both grow up."