Sales have dropped sharply, but retailers love Portugal, saying it’s “in a good place”. On average its wines are cheaper than many of its European competitors – but the complexity of its regions and grapes can put off the uninitiated.

Portugal is a land of contrasts – and not just in its deep ravines and steep terraces, its cork forests and white beaches. When it comes to the UK off-trade, it is a land of mixed fortunes and double- edged swords.

Portuguese wine sales slipped 16% to £37 million in the year to January 4, with volumes down 24% to 646,000 cases, according to Nielsen.

On the plus side, the country’s biggest asset is that retailers love it.

“Portugal is a small category for us, but we are committed to it,” says Tesco product development manager Lucy Clements.

“Vinho Verde is a great opportunity. The on- trade loves it, and worldwide it is everywhere. I was in Seattle recently and every bar and restaurant had it on the list, served ice cold in tumblers in a hipster-chic way. I would love to make more of Vinho Verde.”

But she adds: “The challenge for Portugal is just getting people to drink it – and that is also its biggest opportunity. Every time I pour a Douro people are blown away by the concentration and depth and really love these wines.”

Portugal has been a real success story for Oddbins, which carries wines ranging from entry-level Paseo at £5.75 up to Quinta do Noval at £35. Sales grew 38% in the past year, says buyer Ana Sapungiu. “The majority are in the sub-£10 category from Alentejo, Lisbon and Tejo, but with some really good performing wines around £12 from the Dão and Douro,” she says. “Vinho Verde has seen a particular uptake in sales and I see this continuing this year, with other whites also increasing in popularity.”

At Berry Bros & Rudd, Portuguese light wine sales are “small and static”, according to wine buying director Mark Pardoe. But the recent success of Spain’s white wines – notably Albariño, Verdejo and Godello – could spark interest in Portuguese whites from Minho, while the country’s “interesting reds” could prove popular if tannins are properly managed, he says.

Pardoe adds: “As there is little understanding of Portugal’s regional differences, the temptation would be to produce internationally-styled, attractively priced wines.

“But this would be a short-term fix, as our experience is that individuality must be maintained but a way found to communicate that message.”

Roque Cunha Ferreira, export manager at JP Ramos Wines Group, says British consumers are starting to take notice of the quality of Portuguese wines.

“Some Portuguese grape varieties – such as Touriga Nacional and Arinto – have begun to be recognised by consumers, and there’s a noticeable growth in awareness of the Vinho Verde region.”

Ferreira says independents are particularly well placed to introduce and recommend wines to consumers.

“Once we start seeing results among those with a tendency to want to taste new things first, we will start to see some movement with the bigger retail agents as well as the on-trade suppliers and chains,” he says.

Grow of Pink Elephant Portuguese rosé in the on-trade has been achieved by 10 International, although the brand has little presence in shops these days.

Owner Bill Rolfe says brands are a good way of getting around Portugal’s inaccessible, “sometimes unpronounceable” indigenous grape varieties. “They provide enthusiasts with interesting and challenging drinking experiences, but may be a factor in keeping the less informed wine drinker buying more recognisable wines,” he says.

“Some producers are trying to take back off-trade business with strong branding, such as Pink Elephant and the Point West wines, which go some way to solving approachability problems by focusing on the country and a brand rather than the varieties.”

Blends are another way round the issue, according to Alliance Wine’s Portugal buyer, Christine Allen.

“Portugal is currently producing great value blends from both the Dão and the Douro for under £10, which hold huge potential,” she says. “The style of wine is hugely appealing and by continuing to blend indigenous and international varieties, producers have made the wines far more consumer-friendly than they used to be.”

But she adds: “Portugal’s diversity is both its triumph and its downfall. The unpronounceable indigenous varieties provide endless choice and offer interesting alternatives but for many this level of diversity is just too challenging.”

Portugal’s biggest brand, Mateus, has just launched a range of dual varietal wines called Expressions.

Anthony Habert, marketing manager for distributor Stevens Garnier, says: “Portugal can still be a bit confusing for consumers, but Mateus offers consumers a name they can identify with and acts as a signpost for the category.”

Danny Cameron, director of Raymond Reynolds and chair of the Association of Portuguese Wine Importers, wants to see Portugal build awareness of its regions as brands.

He says: “With so much enthusiasm within the trade for Portugal, we can assume that Portugal has a solid base of quality – and in many cases much more than that – on which to build.”

Wines to watch at the Wines of Portugal annual tasting

Expressions: Mateus launches dual varietal range

Douro red: Tons de Duorom 2012 from JP Ramos

Aragonez blend: Fonte da Serrana Red 2012 from Charles Hawkins & Partners 

Mouchão 2008: Alicante Bouschet meets Trincaderia, rrp £28-£32 

Tropical fruit: Julia Kemper Branco from Dão