Situational Summary Kantara wines were being produced by O.A. Ltd., in Lefkosa, known as Nicosia prior to the Turkish invasion of Cyprus. The wines were made from fine grapes grown on the island. A problem, however, was that these wines had at least a 10% alcohol content, and 98% of the population of Northern Cyprus adhered to Islam, a religion which prohibits the drinking of alcohol. An embargo prevented the export of Kantara wines to the Republic of Cyprus or to anywhere else. Executives were seeking ideas. Report from Cyprus: Ethnicity and Enterprise An island in the Mediterranean Sea, Cyprus was, for several centuries, an important center for international trade. It was ruled by the Venetians until conquered by the Turks in 1571. The demise of the Ottoman Empire resulted in British rule until the Republic of Cyprus became independent from the United Kingdom on August 16, 1960. While the majority of the islanders were traditionally ethnic Greeks, speaking Greek and practicing Greek Orthodoxy, a Muslim minority gradu- ally gained significant power. Communal strife in 1963 led to segregation of the two ethnic groups in Cyprus. In June 1974, Turkish troops landed on the island, occupied 37% of its area and created the Turkish Federated State of Cyprus, the president of which declared the independence of a Turkish Republic of Northern Cyprus (TRNC), on November 15, 1983. This resulted in two de facto autonomous areas, including a new Muslim republic as well as the internationally recognized Republic of Cyprus (with a Christian majority). The two are separated by the “Green Line,” a United Nations buffer zone, covering 4% of the island’s territory. One Island: Two Philosophies To the Greek Cypriots, Cyprus is an economic entity. The name “Cyprus” is derived from the Greek word for copper, which is the island’s principal economic resource. The flag of the Republic of Cyprus is white, with a copper-colored silhouette of the entire island. Below the silhouette are two olive branches symbolizing the hope for peace between the island’s two ethnic communities. In contrast, the TRNC is considered a religious entity. Its people and its policies have been more concerned with isolation from Christians than with economic issues. The flag of the TRNC consists of an Islamic crescent and star, between two red stripes. Four out of five persons on the island of Cyprus are Greek Orthodox Cypriots, while the Turkish Muslims comprise 18% of the population. Almost all of the Greek Cypriots reside in the Republic of Cyprus; only 0.5% live in the TRNC. As for the Turkish Muslims on the island, 98.7% of these reside in the TRNC, while 1.3% live in the Republic of Cyprus. There are also small minorities including Maronites and Armenians, of whom 99.2% live in the Republic of Cyprus. The population of the Republic of Cyprus was estimated at 603,000 in 1996. Of these, 95% were Greek Orthodox. The labor force amounted to 285,500, 30% of whom worked in industry, as compared to 13% in agriculture. Turkish occupation of the north resulted in 180,000 Christians being expelled. The TRNC consequently had a population of 135,000, 98% of whom were Turkish Muslims. This represented a workforce of 74,000, 23% in industry, and 25% in agriculture. The Greek Cypriot economy is much more diversified, and more prosper- ous than its northern counterpart. Exports from the Republic of Cyprus (including cement, clothes, footwear, fruit, vegetables and wines) span the European Union from the United Kingdom to Germany and Greece. The TRNC exports limited quantities of potatoes to Turkey. There also appears to be considerable heroin in transit. While the Republic of Cyprus has had consistently positive growth in the 5 to 8% range, that in the TRNC has been negative 5%. Per capita GNP is over four times greater in the south than in the north. In 1996, per capita GNP in the TRNC was estimated at $3000 US, compared to $13,000 in the Republic of Cyprus. Inflation in the south rarely exceeds 5%. In the TRNC, it has surpassed an annual rate of 100%. Turkey, is the only country in the world to give recognition to the TRNC and the Turkish government also sends financial aid to its puppet republic. Assistance amounts to about 35% of GDP. A considerable amount of time and money has been allocated to a special committee responsible for renaming towns and villages which have had Hellenic names for thousands of years. For example, Kyrenia is now known as Girne, while the Turkish part of Nicosia, the capital, is called Lefkosa. New unilingual Turkish signs have replaced bilingual ones which used to display English as well as Greek. In contrast, bilingual and trilingual signs are still the norm in the Republic of Cyprus where road and street signs are Greek and English. A few signs include Turkish, too. Ironically, a road sign in Lefkosa explicitly indicates the way to Nicosia, although crossing is restricted. On the other side, however, a huge “No Entry” symbol marks the direction to Lefkosa, where crossing is usually less problematic. As a result of the British school system, set up under colonialism in Cyprus, almost everyone south of the “line” speaks English. They have no qualms discussing the hardships they are suffering which the Turks put them through. The Republic of Cyprus has a large merchant marine, as the government offers a flag of convenience registry to about fifty countries. Over 700 Greek ships are registered in the Republic of Cyprus, as are 56 ships from Russia, 45 from the Netherlands, 27 from Japan, 25 from Belgium, 21 from Great Britain, 17 from Spain, 14 from Switzerland and 13 from Hong Kong. Major ports include Larnaca and Limassol. In contrast, the ports of the TRNC are not recognized by the international community and are considered illegal, even by the Republic of Cyprus. Therefore, someone landing in Famagusta (locally known as Gazimagusa) or Kyrenia (Girne in Turkish) is liable for arrest if and when attempting to enter the Republic of Cyprus from the TRNC. The TRNC: An Ethnographic Account Arriving in the TRNC can be an experience in itself. In contrast to the luxury ships which arrive in the Republic of Cyprus (from Greece and Israel), those which link the TRNC with Turkey cater to a different clientele. No country, other than Turkey, permits traffic to or from the TRNC, either by air or by boat. Overstuffed baggage is piled four feet high on hand-made trolleys. Gypsies dressed in unmatching stained clothes line the corridors and the main decks while their children are left to roam. A man walks by, a gun tucked in his pants, while another carries a baton. There are no cabins, only rooms, each with a television blaring, sticky vinyl seats and floors heavily dotted with cigarette butts. Cockroaches scurry by. Adding to the view is a lingering smell of a combination of past and present travelers. The only women’s washroom open has excrement configured in S-shapes on the floor, beside the designated facilities; the slow decay of feces and urine halts anyone attempting to enter. The water is murky and the mirrors clouded, not that passengers, glowing from the suffocating heat of uncirculated air, really want to see themselves under such conditions. There is drinking water available from a tap and a plastic cup, tied to a rope, sits beside. There is no way of putting one’s head underneath the faucet. Once the boat has docked at Famagusta, a port considered illegal by international authorities, the customs rituals begin. The disorderly line-ups of gypsies behind the barred gates adds to the increasing pressure of people’s nerves. By looking into their unfeeling eyes, one senses the wrongs committed in the past. A passenger can easily imagine having been sent as a prisoner of England to Australia in the 18th century. A customs official arrives, coffee in hand, opens one gate and quickly closes it behind him. He yells a few words and sits down as if to say, “Don’t bother me until I finish my coffee.” The pressure rises yet another notch and finally a dozen passengers are permitted to cross the first barrier. A physical fight breaks out in front of the custom’s control desk, and another commotion brews behind the gate. It will be hours before all pass through. Some will have their passports stamped. A TRNC stamp in one’s passport, however, bars the bearer from entering Greece. Furthermore, landing on Cyprus from a TRNC port prohibits entry by land from the TRNC to the Republic of Cyprus. Illegal ports of entry include Gazimagusa (formerly Famagusta), Girne (formerly Kyrenia), and Karavostasi (formerly Karavas) as well as all of the airports in the TRNC. At the United Nations base between the two countries, peacekeeping, Australian Civilian Police explained two options for individuals trying to cross: (1) a jail sentence of 4 months as was recently given to an unsuspecting Dane; or (2) possibly being shot. There are no hotel representatives to greet the passengers as they emerge from the port, only shady characters hanging around, waiting... Daring to ask for directions to the city may result in cold stares and muffled answers. Keeping one’s belongings in close proximity is advisable, and finding the center of town by intuition usually works well. Any transaction in the TRNC must be carefully monitored as folded bills, double counted, are often a strategy for increased revenues, even at banks. Tourism has not flourished here. Hotels, as a result, are few and far between. Many signs exhibit that Otels and Pensions have existed; however, many have been boarded up. Turkish residents have no qualms in expressing their feelings of hatred for the Greeks and Christians alike. Opinions are offered so openly and as a matter of fact, that an uninformed listener might be convinced that there really is only one side of the story. Furthermore, such stories are supported by pictures of the war where Orthodox priests are seen shooting at Turkish Muslims. Postcards carry prose that displays the Turks as innocent victims. Soldiers patrol the streets and in the heat of noon, they are the only people to be seen. They are clad in khaki uniforms and hard hats with the letters AS12. United Nations soldiers are to be found at designated posts, sporting blue hats and multicolored green army fatigues. It has been over 20 years since the cease fire, yet it feels like the war has just ended, or maybe not yet. Bullet holes mark many walls and monuments. Ruins of the war can be seen everywhere, partially standing, as grim reminders of the mass shootings and lootings of the past. Antique shops display many beautiful pieces that one cannot help but imagine to have been stolen from former residents removed from their homes. The irony lies in the fact that should tourists make a purchase, such pieces will be confiscated upon departure, as these are not exportable. One of the tenants for the war was to stop the infiltration of Christian values on Muslims. Old churches are now used as mosques and bottles of alcohol take up more shelf space than do soft drinks and juices. The Republic of Cyprus: An Ethnographic Account Docking at the internationally recognized port of Limassol tends to entail a smoother arrival. Passports are stamped on the ship and although the bag search is thorough, the line-ups are short. An information desk, exchange offices and car rental companies are all set up to accommodate tourists and business people alike. The shipping yards are full of containers destined for Europe, Asia, America and Africa. Ships headed for the Netherlands, Cambodia, Liberia, Jamaica, Egypt and elsewhere have minimal procedures with which to contend. While Limassol is the port of entry for passengers traveling by sea, the major international airport is at Larnaca. In response to the demands of ever- growing tourism and foreign investment, a new airport was recently built at Paphos. Cyprus Airways is the national airline of the Republic of Cyprus, linking it to the world; of course, there is no traffic between the TRNC and the Republic of Cyprus. Upon first glance, much of the Republic of Cyprus carries the same traits as do other Greek islands. Each appeals to a different type of tourist and/or investor, and the Republic of Cyprus is no different, except that it has had a more dramatic history in recent years. A good portion of its lush forests had been bombed and burned by the Turks in the 1970s. Replanting them has taken time, but the results are now being seen all over the rolling hills of the south. Many rangers patrol the areas, ensuring the success of the projects. It is, however, the capital city, Nicosia, which displays most of the scars of the war, both in its urban development and its people’s eyes. There is a bitterness that can be felt even without words. All along the border there are houses left with broken doors and walls. Sand bags are still piled. Soldiers, standing tall on balconies guarding their posts, are using their binoculars as if an ambush were about to happen. At the border crossing, a cross can be seen leaning against a dilapidated building, a map of Cyprus hung on the posts and a knife jabbed in its heart, where Nicosia lies. Red paint pours from the soul of this island. At this crossing, it is possible to obtain a day pass to meander to the “other side.” A list of instructions must be followed whereby nothing is allowed to be purchased and a curfew of 5:30 p.m. is imposed. The visa issuer states that he cannot guarantee a person’s safety should one choose to cross the line. Interestingly enough, life on the south side of Nicosia goes on and produc- tivity is seen more vividly than on the TRNC side. A restaurant manager solicits new clients, and makes sandwiches. While his clients are eating, he fixes a window. There are five ice cream shops within a few meters of one another. Recent advertising posters and signs are replacing those from before the war, some of which are still visible. Increased marketing costs, investment and demand have augmented prices. People pay $1.50 US for a tea, in the Republic of Cyprus, whereas in the TRNC, the same averages 15¢ US. Living expenses are several times more expensive on the former side than on the latter. Big brand names and international franchises such as Body Shop, Kentucky Fried Chicken and Holiday Inn, are prominently featured. Of course, Western influence also brought a number of sex shops, cabarets and hourly room hotels. It is possible to acquire a room for $20 including sex. A lot more “nightlife” is exhibited as the sun begins to set. Questions 1. Discuss the potential barriers facing Kantara wines in its further growth path. 2. What could Kantara wines offer to Northern Cyprus citizens?

Situational Summary Kantara wines were being produced by O.A. Ltd., in Lefkosa, known as Nicosia prior to the Turkish invasion of Cyprus. The wines were made from fine grapes grown on the island. A problem, however, was that these wines had at least a 10% alcohol content, and 98% of the population of Northern Cyprus adhered to Islam, a religion which prohibits the drinking of alcohol. An embargo prevented the export of Kantara wines to the Republic of Cyprus or to anywhere else. Executives were seeking ideas. Report from Cyprus: Ethnicity and Enterprise An island in the Mediterranean Sea, Cyprus was, for several centuries, an important center for international trade. It was ruled by the Venetians until conquered by the Turks in 1571. The demise of the Ottoman Empire resulted in British rule until the Republic of Cyprus became independent from the United Kingdom on August 16, 1960. While the majority of the islanders were traditionally ethnic Greeks, speaking Greek and practicing Greek Orthodoxy, a Muslim minority gradu- ally gained significant power. Communal strife in 1963 led to segregation of the two ethnic groups in Cyprus. In June 1974, Turkish troops landed on the island, occupied 37% of its area and created the Turkish Federated State of Cyprus, the president of which declared the independence of a Turkish Republic of Northern Cyprus (TRNC), on November 15, 1983. This resulted in two de facto autonomous areas, including a new Muslim republic as well as the internationally recognized Republic of Cyprus (with a Christian majority). The two are separated by the “Green Line,” a United Nations buffer zone, covering 4% of the island’s territory. One Island: Two Philosophies To the Greek Cypriots, Cyprus is an economic entity. The name “Cyprus” is derived from the Greek word for copper, which is the island’s principal economic resource. The flag of the Republic of Cyprus is white, with a copper-colored silhouette of the entire island. Below the silhouette are two olive branches symbolizing the hope for peace between the island’s two ethnic communities. In contrast, the TRNC is considered a religious entity. Its people and its policies have been more concerned with isolation from Christians than with economic issues. The flag of the TRNC consists of an Islamic crescent and star, between two red stripes. Four out of five persons on the island of Cyprus are Greek Orthodox Cypriots, while the Turkish Muslims comprise 18% of the population. Almost all of the Greek Cypriots reside in the Republic of Cyprus; only 0.5% live in the TRNC. As for the Turkish Muslims on the island, 98.7% of these reside in the TRNC, while 1.3% live in the Republic of Cyprus. There are also small minorities including Maronites and Armenians, of whom 99.2% live in the Republic of Cyprus. The population of the Republic of Cyprus was estimated at 603,000 in 1996. Of these, 95% were Greek Orthodox. The labor force amounted to 285,500, 30% of whom worked in industry, as compared to 13% in agriculture. Turkish occupation of the north resulted in 180,000 Christians being expelled. The TRNC consequently had a population of 135,000, 98% of whom were Turkish Muslims. This represented a workforce of 74,000, 23% in industry, and 25% in agriculture. The Greek Cypriot economy is much more diversified, and more prosper- ous than its northern counterpart. Exports from the Republic of Cyprus (including cement, clothes, footwear, fruit, vegetables and wines) span the European Union from the United Kingdom to Germany and Greece. The TRNC exports limited quantities of potatoes to Turkey. There also appears to be considerable heroin in transit. While the Republic of Cyprus has had consistently positive growth in the 5 to 8% range, that in the TRNC has been negative 5%. Per capita GNP is over four times greater in the south than in the north. In 1996, per capita GNP in the TRNC was estimated at $3000 US, compared to $13,000 in the Republic of Cyprus. Inflation in the south rarely exceeds 5%. In the TRNC, it has surpassed an annual rate of 100%. Turkey, is the only country in the world to give recognition to the TRNC and the Turkish government also sends financial aid to its puppet republic. Assistance amounts to about 35% of GDP. A considerable amount of time and money has been allocated to a special committee responsible for renaming towns and villages which have had Hellenic names for thousands of years. For example, Kyrenia is now known as Girne, while the Turkish part of Nicosia, the capital, is called Lefkosa. New unilingual Turkish signs have replaced bilingual ones which used to display English as well as Greek. In contrast, bilingual and trilingual signs are still the norm in the Republic of Cyprus where road and street signs are Greek and English. A few signs include Turkish, too. Ironically, a road sign in Lefkosa explicitly indicates the way to Nicosia, although crossing is restricted. On the other side, however, a huge “No Entry” symbol marks the direction to Lefkosa, where crossing is usually less problematic. As a result of the British school system, set up under colonialism in Cyprus, almost everyone south of the “line” speaks English. They have no qualms discussing the hardships they are suffering which the Turks put them through. The Republic of Cyprus has a large merchant marine, as the government offers a flag of convenience registry to about fifty countries. Over 700 Greek ships are registered in the Republic of Cyprus, as are 56 ships from Russia, 45 from the Netherlands, 27 from Japan, 25 from Belgium, 21 from Great Britain, 17 from Spain, 14 from Switzerland and 13 from Hong Kong. Major ports include Larnaca and Limassol. In contrast, the ports of the TRNC are not recognized by the international community and are considered illegal, even by the Republic of Cyprus. Therefore, someone landing in Famagusta (locally known as Gazimagusa) or Kyrenia (Girne in Turkish) is liable for arrest if and when attempting to enter the Republic of Cyprus from the TRNC. The TRNC: An Ethnographic Account Arriving in the TRNC can be an experience in itself. In contrast to the luxury ships which arrive in the Republic of Cyprus (from Greece and Israel), those which link the TRNC with Turkey cater to a different clientele. No country, other than Turkey, permits traffic to or from the TRNC, either by air or by boat. Overstuffed baggage is piled four feet high on hand-made trolleys. Gypsies dressed in unmatching stained clothes line the corridors and the main decks while their children are left to roam. A man walks by, a gun tucked in his pants, while another carries a baton. There are no cabins, only rooms, each with a television blaring, sticky vinyl seats and floors heavily dotted with cigarette butts. Cockroaches scurry by. Adding to the view is a lingering smell of a combination of past and present travelers. The only women’s washroom open has excrement configured in S-shapes on the floor, beside the designated facilities; the slow decay of feces and urine halts anyone attempting to enter. The water is murky and the mirrors clouded, not that passengers, glowing from the suffocating heat of uncirculated air, really want to see themselves under such conditions. There is drinking water available from a tap and a plastic cup, tied to a rope, sits beside. There is no way of putting one’s head underneath the faucet. Once the boat has docked at Famagusta, a port considered illegal by international authorities, the customs rituals begin. The disorderly line-ups of gypsies behind the barred gates adds to the increasing pressure of people’s nerves. By looking into their unfeeling eyes, one senses the wrongs committed in the past. A passenger can easily imagine having been sent as a prisoner of England to Australia in the 18th century. A customs official arrives, coffee in hand, opens one gate and quickly closes it behind him. He yells a few words and sits down as if to say, “Don’t bother me until I finish my coffee.” The pressure rises yet another notch and finally a dozen passengers are permitted to cross the first barrier. A physical fight breaks out in front of the custom’s control desk, and another commotion brews behind the gate. It will be hours before all pass through. Some will have their passports stamped. A TRNC stamp in one’s passport, however, bars the bearer from entering Greece. Furthermore, landing on Cyprus from a TRNC port prohibits entry by land from the TRNC to the Republic of Cyprus. Illegal ports of entry include Gazimagusa (formerly Famagusta), Girne (formerly Kyrenia), and Karavostasi (formerly Karavas) as well as all of the airports in the TRNC. At the United Nations base between the two countries, peacekeeping, Australian Civilian Police explained two options for individuals trying to cross: (1) a jail sentence of 4 months as was recently given to an unsuspecting Dane; or (2) possibly being shot. There are no hotel representatives to greet the passengers as they emerge from the port, only shady characters hanging around, waiting... Daring to ask for directions to the city may result in cold stares and muffled answers. Keeping one’s belongings in close proximity is advisable, and finding the center of town by intuition usually works well. Any transaction in the TRNC must be carefully monitored as folded bills, double counted, are often a strategy for increased revenues, even at banks. Tourism has not flourished here. Hotels, as a result, are few and far between. Many signs exhibit that Otels and Pensions have existed; however, many have been boarded up. Turkish residents have no qualms in expressing their feelings of hatred for the Greeks and Christians alike. Opinions are offered so openly and as a matter of fact, that an uninformed listener might be convinced that there really is only one side of the story. Furthermore, such stories are supported by pictures of the war where Orthodox priests are seen shooting at Turkish Muslims. Postcards carry prose that displays the Turks as innocent victims. Soldiers patrol the streets and in the heat of noon, they are the only people to be seen. They are clad in khaki uniforms and hard hats with the letters AS12. United Nations soldiers are to be found at designated posts, sporting blue hats and multicolored green army fatigues. It has been over 20 years since the cease fire, yet it feels like the war has just ended, or maybe not yet. Bullet holes mark many walls and monuments. Ruins of the war can be seen everywhere, partially standing, as grim reminders of the mass shootings and lootings of the past. Antique shops display many beautiful pieces that one cannot help but imagine to have been stolen from former residents removed from their homes. The irony lies in the fact that should tourists make a purchase, such pieces will be confiscated upon departure, as these are not exportable. One of the tenants for the war was to stop the infiltration of Christian values on Muslims. Old churches are now used as mosques and bottles of alcohol take up more shelf space than do soft drinks and juices. The Republic of Cyprus: An Ethnographic Account Docking at the internationally recognized port of Limassol tends to entail a smoother arrival. Passports are stamped on the ship and although the bag search is thorough, the line-ups are short. An information desk, exchange offices and car rental companies are all set up to accommodate tourists and business people alike. The shipping yards are full of containers destined for Europe, Asia, America and Africa. Ships headed for the Netherlands, Cambodia, Liberia, Jamaica, Egypt and elsewhere have minimal procedures with which to contend. While Limassol is the port of entry for passengers traveling by sea, the major international airport is at Larnaca. In response to the demands of ever- growing tourism and foreign investment, a new airport was recently built at Paphos. Cyprus Airways is the national airline of the Republic of Cyprus, linking it to the world; of course, there is no traffic between the TRNC and the Republic of Cyprus. Upon first glance, much of the Republic of Cyprus carries the same traits as do other Greek islands. Each appeals to a different type of tourist and/or investor, and the Republic of Cyprus is no different, except that it has had a more dramatic history in recent years. A good portion of its lush forests had been bombed and burned by the Turks in the 1970s. Replanting them has taken time, but the results are now being seen all over the rolling hills of the south. Many rangers patrol the areas, ensuring the success of the projects. It is, however, the capital city, Nicosia, which displays most of the scars of the war, both in its urban development and its people’s eyes. There is a bitterness that can be felt even without words. All along the border there are houses left with broken doors and walls. Sand bags are still piled. Soldiers, standing tall on balconies guarding their posts, are using their binoculars as if an ambush were about to happen. At the border crossing, a cross can be seen leaning against a dilapidated building, a map of Cyprus hung on the posts and a knife jabbed in its heart, where Nicosia lies. Red paint pours from the soul of this island. At this crossing, it is possible to obtain a day pass to meander to the “other side.” A list of instructions must be followed whereby nothing is allowed to be purchased and a curfew of 5:30 p.m. is imposed. The visa issuer states that he cannot guarantee a person’s safety should one choose to cross the line. Interestingly enough, life on the south side of Nicosia goes on and produc- tivity is seen more vividly than on the TRNC side. A restaurant manager solicits new clients, and makes sandwiches. While his clients are eating, he fixes a window. There are five ice cream shops within a few meters of one another. Recent advertising posters and signs are replacing those from before the war, some of which are still visible. Increased marketing costs, investment and demand have augmented prices. People pay $1.50 US for a tea, in the Republic of Cyprus, whereas in the TRNC, the same averages 15¢ US. Living expenses are several times more expensive on the former side than on the latter. Big brand names and international franchises such as Body Shop, Kentucky Fried Chicken and Holiday Inn, are prominently featured. Of course, Western influence also brought a number of sex shops, cabarets and hourly room hotels. It is possible to acquire a room for $20 including sex. A lot more “nightlife” is exhibited as the sun begins to set. Questions 1. Discuss the potential barriers facing Kantara wines in its further growth path. 2. What could Kantara wines offer to Northern Cyprus citizens?